Current Status Introducing Body:House Bill Number:4521 Primary Sponsor:L. Martin Type of Legislation:GB Subject:Consumer Freedom of Choice in Motor Vehicle Insurance Act Residing Body:House Computer Document Number:BBM/9778.JM Introduced Date:Mar 04, 1992 Last History Body:House Last History Date:Apr 30, 1992 Last History Type:Objection withdrawn by Representative Scope of Legislation:Statewide All Sponsors:L. Martin Hallman Corning Wofford Rama H. Brown Shissias Haskins Fulmer Littlejohn Lanford Meacham Manly D. Elliott Keyserling Stone Kirsh D. Williams McGinnis Cato G. Bailey Quinn Marchbanks Stoddard Rhoad Jaskwhich A. Young Holt Baker Wright Hendricks Keegan Wells Sharpe Council Fair Wilder P. Harris Riser Snow Koon Phillips Altman Bruce McCraw Klapman Type of Legislation:General Bill
Bill Body Date Action Description CMN ---- ------ ------------ ------------------------------ --- 4521 House Apr 30, 1992 Objection withdrawn by Representative 4521 House Apr 29, 1992 Objection by Representative 4521 House Apr 28, 1992 Debate adjourned 4521 House Apr 23, 1992 Debate Adjourned until Tuesday, April 28, 1992 4521 House Apr 23, 1992 Objection by Representative 4521 House Apr 22, 1992 Debate interrupted 4521 House Apr 07, 1992 Committee Report: Favorable 26 with amendment 4521 House Mar 04, 1992 Introduced, read first time, 26 referred to CommitteeView additional legislative information at the LPITS web site.
Indicates Matter Stricken
Indicates New Matter
COMMITTEE REPORT
April 7, 1992
H. 4521
Introduced by REPS. L. Martin, Hallman, Corning,
Wofford, Rama, H. Brown, Shissias, Haskins, Fulmer,
Littlejohn, Lanford, Meacham, Manly, D. Elliott,
Keyserling, Stone, Kirsh, D. Williams, McGinnis,
Cato, G. Bailey, Quinn, Marchbanks, Stoddard,
Rhoad, Jaskwhich, A. Young, Holt, Baker, Wright,
Hendricks, Keegan, Wells, Sharpe, Council, Fair,
Wilder, P. Harris, Riser, Snow, Koon, Phillips,
Altman, Bruce, McCraw and Klapman
S. Printed 4/7/92--H.
Read the first time March 4, 1992.
To whom was referred a Bill (H. 4521), to amend
the Code of Laws of South Carolina, 1976, by adding
Chapter 78 to Title 38 so as to enact the "Consumer
Freedom of Choice in Motor Vehicle Insurance Act",
etc., respectfully
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, by striking
all after the enacting words and inserting:
/SECTION 1. Title 38 of the 1976 Code is
amended by adding:
Section 38-78-10. This chapter may be cited as
the `Consumer Freedom of Choice in Motor Vehicle
Insurance Act'.
<#PAGE> Section 38-78-20. (A) Under existing law, the
ability of a person to recover losses incurred as
a result of a motor vehicle accident is limited by
factors over which the accident victim has no
control. The recovery is dependent on the conduct
of the other driver, the amount of liability
insurance carried by the other driver, and the
financial resources of the other driver. Two
individuals who have received identical injuries
may recover markedly different amounts. Under
existing law, many individuals receive little or no
compensation for their losses.
(B) This chapter gives motorists the right to
choose the kinds of personal protection available
in case of an automobile accident and the amount of
financial protection they deem appropriate and
affordable. Instead of being forced to buy
traditional fault liability insurance to protect
strangers, motorists will have the opportunity to
buy a new personal protection policy to protect
themselves and their family members regardless of
fault in the event of a motor vehicle accident.
Motorists will also have the right to reject the
provisions of this chapter, and thus retain all
rights to sue and be sued for both economic and
noneconomic loss based on fault, under the existing
fault liability insurance system.
(C) The interaction between traditional fault
liability insurance and the personal protection
policy is as follows:
(1) Motorists who choose the traditional
fault liability insurance and who are involved in
an accident with any other motorist essentially
will retain the system existing now where they have
the opportunity to claim and sue based on fault for
both economic and noneconomic damages. They will
also remain subject to being sued for such
liability to others based on fault.
(2) Motorists who choose the new personal
protection policy system established by this
chapter and who are involved in an accident with a
motorist who has chosen traditional fault liability
insurance will be promptly compensated for their
own economic losses regardless of fault. A
<#PAGE>personal protection insured can claim against and
sue the other motorist, based on fault, for
economic damages if the damages exceed their
personal protection limits and for noneconomic
damages if their injury exceeds the verbal
threshold. They will also remain in this
circumstance subject to being sued for such
liability to others based on fault.
(3) Two motorists who each choose the
personal protection policy and who are involved in
an accident with each other will be promptly
compensated under their own policies for their own
economic losses regardless of fault. In this
situation, the two motorists who have chosen the
personal protection policy do not have the right to
claim and sue for full damages based on fault
unless the injury exceeds the verbal threshold but
if either suffers a loss in excess of his or her
policy's benefit levels, that person retains the
right to claim and sue for uncompensated economic
loss based on fault.
(4) If a motorist who has chosen fault
liability insurance is involved in an accident with
an uninsured motorist, the policyholder can be
compensated for losses under the uninsured motorist
provisions of his or her own policy based on fault
and has the right to claim against and sue the
uninsured motorist for full damages based on fault.
The uninsured motorist forfeits any right to claim
for property damage up to ten thousand dollars and
for noneconomic loss against the motorist who has
chosen fault liability insurance, except where the
motorist choosing fault liability insurance was
driving under the influence of alcohol or illegal
drugs or committed intentional misconduct.
(5) If a motorist who has chosen the personal
protection policy is involved in an accident with
an uninsured motorist, the policyholder will be
promptly compensated for economic losses under his
or her personal protection policy regardless of
fault and has the right to claim against and sue
the uninsured motorist for noneconomic damages
based on fault if the injury exceeds the verbal
threshold. The uninsured motorist forfeits any
<#PAGE>right to claim for the first ten thousand dollars
of property damage and for noneconomic loss against
the motorist who has chosen the personal protection
policy, except where such motorist was driving
under the influence of alcohol or illegal drugs or
committed intentional misconduct.
(D) The initial rate to be charged by each
automobile insurer for the basic personal
protection policy required by this act shall be at
least fifteen percent lower than the approved rate
for the minimum limits prescribed by Sections
38-77-140 and 38-77-150 by class and territory for
each automobile insurance risk in effect on
September 30, 1992. The rate for the basic
personal protection policy cannot be increased for
automobile insurance policies issued or renewed
with effective dates between January 1, 1993,
through December 31, 1993.
(E) A motorist who purchases the personal
protection policy will have five thousand dollars
of property damage liability insurance as part of
his mandatory coverage.
(F) To the extent the terms of Section 38-78-20
may differ from the terms of Section 38-78-30, the
terms of Section 38-78-30 govern.
Section 38-78-30. As used in this chapter,
unless the context otherwise requires:
(A) `Accidental bodily injury' means bodily
injury, sickness, or disease, or death resulting
therefrom, arising out of the ownership, operation,
or use of a motor vehicle, or while occupying such
vehicle, which is accidental as to the person
insured.
(B) `Added personal protection' means an
optional policy, plan, or coverage for personal
protection which each insurer issuing motor vehicle
liability insurance in this State shall make
available in the limits set by Section
38-77-110(B)(5).
(C) `Basic personal protection' means a
policy, plan, or coverage for personal protection
which provides benefits for net loss resulting from
accidental bodily injury resulting from a motor
vehicle accident and liability coverage in at least
<#PAGE>the amounts prescribed by Section 38-77-140. Basic
personal protection benefits consist of the
following, with an aggregate limit of fifteen
thousand dollars per person arising out of one
motor vehicle accident:
(1) medical expenses;
(2) loss of income from work, up to two
hundred dollars per week;
(3) replacement services loss, up to one
hundred dollars per week;
(4) death benefits of five thousand dollars
if the death of the injured person occurs within
one year after the date of a motor vehicle accident
and was a direct result of the accident.
Each basic personal protection insurer is
permitted to incorporate in added personal
protection benefits coverage such terms,
conditions, and exclusions as may be consistent
with the premiums charged.
Motorcycles may not be covered by a personal
protection policy.
(D) `Cause of action for injury' means a
claim for accidental bodily injury for economic or
noneconomic loss, or both, caused by the negligent
conduct or intentional misconduct of another
person, and includes a claim by any person other
than a person suffering accidental bodily injury
based on such injury, including, but not limited
to, loss of consortium, companionship, or any
derivative claim.
(E) `Commissioner' means the Chief Insurance
Commissioner.
(F) `Dependent' means all persons related to
another person by blood, marriage, adoption, or
otherwise who reside in the same household at the
time of the accidental bodily injury and receive
financial services or support for him or her.
(G) `Economic loss' means actual pecuniary
loss and actual monetary expenses incurred by or on
behalf of an injured person as the result of an
accidental bodily injury consisting only of medical
expense, work loss, replacement services loss, and
death benefits.
<#PAGE> (H) `Governmental unit' means the United
States government, the government of the State of
South Carolina, and any agency, authority, board,
department, division, commission, institution,
bureau, or like governmental entity of either such
government, or any local government in this State,
and such units thereof, including, but not limited
to, counties, cities, towns, and other regional
governments.
(I) `Injured person' means a person who
sustains accidental bodily injury when eligible for
benefits under a policy providing personal
protection. The term also includes, where
appropriate, the personal representative of an
estate.
(J) `Intentional misconduct' means conduct
whereby harm is intentionally caused or attempted
to be caused by one who acts or fails to act for
the purpose of causing harm or with knowledge that
harm is substantially certain to follow when such
conduct caused or substantially contributed to the
harm claimed for. A person does not intentionally
cause or attempt to cause harm (1) merely because
his or her act or failure to act is done with the
realization that it creates a grave risk of causing
harm or (2) if the act or omission causing bodily
harm is for the purpose of averting bodily harm to
oneself or another person.
(K) `Loss of income from work' means eighty
percent loss of gross income from the work the
injured person would have continued to perform if
he or she had not been injured, reduced by any
income from substitute work actually performed by
him or her or by income he or she would have earned
in available appropriate substitute work he or she
was capable of performing but unreasonably failed
to undertake. In order to be eligible for these
benefits, the injured person must have been in an
occupational status, earning or producing income,
immediately prior to the accident. Loss of income
from work does not include any loss after the death
of the injured person, and payment for the period
of disability shall not exceed two years from the
date of the accident.
<#PAGE> Loss of income from work may be excluded from an
insured's policy, at the policyholder's request,
with an appropriate reduction in the premium.
(L) `Medical expenses' means usual and
customary amounts incurred by an injured person for
necessary medical, surgical, radiological, dental,
chiropractic, ambulance, hospital, medical
rehabilitation and professional nursing services,
eyeglasses, hearing aids, and prosthetic devices.
Medical expense may include nonmedical remedial
treatment rendered in accordance with a recognized
religious method of healing. The words `incurred
by' include medical expenses incurred on behalf of
an injured person by a parent or guardian if the
injured person is a minor or incompetent, or by a
surviving spouse if the injured person is deceased.
Personal protection insurers may review medical
expenses to assure that the expenses are reasonable
and necessary according to generally accepted
standards of medical practice. Under basic
personal protection and added personal protection,
medical expenses are promptly payable to the
injured person for covered expenses incurred within
two years after the date of the accident. `Medical
expenses' do not include:
(1) that portion of a charge for a room in a
hospital, clinic, or convalescent or nursing home,
or any other institution engaged in providing
nursing care and related services, in excess of a
reasonable and customary charge for semi-private
accommodations, unless medically required; or
(2) treatments, services, products, or
procedures that are experimental in nature, or for
research, or not primarily designed to serve a
medical purpose, or which are not commonly and
customarily recognized throughout the medical
profession and within the United States as
appropriate treatment of the accidental bodily
injury, or which are not performed by a
professional licensed by the professional's
licensing board pursuant to Title 40.
(M) `Medical rehabilitation' means
rehabilitation services which are reasonable and
necessary to reduce the disability and help to
<#PAGE>restore the pre-accident level of physical
functioning of the injured person.
(N) `Motor vehicle' is defined by Section
38-77-30(7).
(O) `Noneconomic loss' means any loss other
than economic loss and includes, but is not
necessarily limited to, pain, suffering,
inconvenience, physical impairment, mental anguish,
emotional pain and suffering, hedonic damages, and
loss of any of the following: earning capacity,
consortium, society, companionship, comfort,
protection, marital care, parental care, filial
care, attention, advice, counsel, training,
guidance, or education. Noneconomic loss does not
include economic loss caused by pain and suffering
or by physical impairment.
(P) `Occupying' means to be in or upon a
motor vehicle or engaged in the immediate act of
entering into or alighting from the motor vehicle.
(Q) `Operation or use' means operation or use
of a motor vehicle as a motor vehicle, including,
incident to its operation or use as a vehicle,
occupying it. Operation or use of a motor vehicle
does not cover conduct within the course of a
business of manufacturing, selling, or maintaining
a motor vehicle, including repairing, servicing,
washing, loading, or unloading, nor does it include
such conduct not within the course of such a
business, unless such conduct occurs while
occupying a motor vehicle.
(R) `Owner' means the person or persons,
other than a lienholder or secured party, who owns
or has title to a motor vehicle or is entitled to
the use and possession of a motor vehicle subject
to a security interest held by another person.
Owner does not include (i) a lessee under a lease
not intended as security, or (ii) the United States
of America or any agency thereof, except with
respect to motor vehicles for which it has elected
to provide insurance.
(S) `Person' includes an organization, public
or private.
(T) `Personal protection' means a policy,
plan, or coverage which provides basic or added
<#PAGE>personal protection benefits for loss resulting
from accidental bodily injury, regardless of fault.
(U) `Personal protection insured' means:
(1) a person identified by name as an insured
in a contract providing personal protection
benefits;
(2) while residing in the same household with
a named insured, the following persons:
(a) a spouse or other relative of a named
insured; or
(b) a minor in the custody of a named
insured. A person resides in the same household if
he or she usually makes his or her home in the same
family unit, even though he or she temporarily
lives elsewhere;
(3) a person with respect to accidents within
this State who sustains accidental bodily injury
while occupying or when struck as a pedestrian by
a motor vehicle insured for personal protection,
unless the person has rejected the coverage under
Section 38-78-120.
(V) `Personal protection insurer' means an
automobile insurer providing personal protection
benefits.
(W) `Replacement services loss' means
expenses reasonably incurred in obtaining ordinary
and necessary services from others, not members of
the injured person's household, in lieu of those
the injured person would have performed for the
benefit of the household. Replacement services
loss does not include any loss incurred after the
death of an injured person, and the disability
period shall not exceed two years from the date of
the accident.
(X) `Resident relative' means a person
related to the owner of a motor vehicle by blood,
marriage, adoption, or otherwise and residing in
the same household. A person resides in the same
household if he or she usually makes his or her
home in the same family unit, even though
temporarily living elsewhere.
(Y) `Serious injury' means an accidental
bodily injury which results in death, serious and
permanent loss of an important bodily function,
<#PAGE>permanent and serious bodily injury determined
objectively within reasonable medical probability,
or serious and permanent disfigurement.
(Z) `Uncompensated economic loss' means that
portion of economic loss arising out of an
accidental bodily injury of an injured person which
exceeds the benefits provided by a personal
protection insurer under a policy providing such
benefits (except for loss incurred by a deductible
under such a policy) and collateral sources.
(aa) `Uninsured motorist' means the owner or
operator of a motor vehicle uninsured for either
basic personal protection or liability insurance at
the limits prescribed by this State's financial
responsibility laws or who otherwise fails to
comply with the financial responsibility laws of
this State.
(bb) `Uninsured motor vehicle' means a motor
vehicle required to be registered as to which (i)
there is no bodily injury liability insurance and
property damage liability insurance, (ii) no bond
has been given or cash or securities delivered in
lieu thereof, (iii) the owner has not qualified as
a self-insurer, and (iv) there is no basic or added
personal protection insurance as defined in Section
38-78-30.
(cc) `Reasonable and necessary' means usual
and customary charges for necessary medical
treatment.
(dd) `Permanent' means an injury whose effects
cannot be eliminated by further time for recovery
or by further treatment and care, including
surgery.
(ee) `Prevailing party' means the insured
deemed to be the `prevailing party' for purposes of
this section if the award is at least the amount
requested in writing of the insurer not less than
ten days prior to the trial. The insurer shall be
deemed to be the prevailing party if the award is
no more than the amount offered by the insurer in
writing not less than ten days prior to the trial.
There shall be `no prevailing party' if the award
is more than offered by the insurer, but less than
requested by the insured.
<#PAGE> (ff) `Reasonable proof' means itemized medical
bills or other medical records necessary to
determine specific patient information, dates of
treatment, a specific diagnosis, the specific
services rendered and the specific charges for each
of the services rendered. If an insurer requests
information in addition to the proof submitted,
they must specifically identify the additional
information needed and why it is needed.
(gg) `Serious' means only an injury which has
a substantial bearing on the injured person's
ability to resume substantially all of his normal
activities and lifestyle.
Section 38-78-40. Each motor vehicle required
to be registered in this State shall be insured for
basic personal protection as defined by Section
38-78-30(C) and security for payment of tort
liabilities as required by Section 38-77-140,
unless the owner of the motor vehicle exercises his
or her right of rejection under Section 38-78-120
or complies with Section 56-10-520 relating to the
right to drive without insurance. This insurance
may be provided by a contract of insurance or by
qualifying as a self-insurer in compliance with
Section 56-9-60.
An insurance policy written by a personal
protection insurer under this chapter to provide
basic personal protection is deemed to include all
coverages required by this chapter, including the
minimum tort liability coverage. Coverage under
basic personal protection meets the requirements of
this State's financial responsibility laws.
Section 38-78-50. Every personal protection
insured must be offered uninsured motorist coverage
as required by Section 38-77-150. Additional
uninsured motorist coverage and underinsured
motorist coverage must be offered to the insured as
required by Section 38-77-160. All other
provisions, rights, and obligations in Sections
38-77-150 and 38-77-160 apply to the personal
protection insured and the insurer. A personal
protection insured may not recover under the
uninsured motorist provision of the personal
protection policy if the personal protection
<#PAGE>insured was at fault in the accident. Noneconomic
damages may only be recovered under this provision
if the threshold as defined in Section 38-78-110 is
reached.
Section 38-78-55. Regardless of the number of
motor vehicles involved, policies issued, persons
covered, claims made, or premiums paid, the
liability limits for multiple coverages under one
or more automobile insurance policies must not be
combined or added together to determine the maximum
limit of coverage available to an injured person.
Unless the insurance policy or contract clearly
provides otherwise, the policy or contract may
provide that if two or more policies, plans, or
coverages apply equally to the same accident, the
highest limit of liability applicable is the
maximum amount available to an injured person under
any one of the policies, plans, or coverages.
Section 38-78-60. (A) A personal protection
insurer shall pay to a personal protection insured
benefits for accidental bodily injury sustained
within the United States, its territories, or
possessions or Canada.
(B) A personal protection policy issued in this
State contains coverage such that it satisfies the
liability insurance requirements of the financial
responsibility laws of any other state or Canadian
province in which the insured motor vehicle is
operated.
Section 38-78-70. (A) A personal protection
insurer has no obligation to provide benefits to or
on behalf of an injured person who at the time of
the accident:
(1) was involved in a motor vehicle accident
while committing a felony or while voluntarily
occupying a motor vehicle that he or she knew to be
stolen. If the person dies as a result of his or
her own intentional misconduct, his or her
survivors are not entitled to personal protection
for loss arising from the decedent's injury or
death;
(2) was driving under the influence of
alcohol or illegal drugs;
<#PAGE> (3) was occupying an uninsured motor vehicle
owned by the person;
(4) was guilty of intentional misconduct. If
the person dies as a result of his or her own
intentional misconduct, his or her survivors are
not entitled to personal protection for loss
arising from the decedent's injury or death;
(5) has rejected the limitation on his or her
right to sue under Section 38-78-120;
(6) was an uninsured motorist;
(7) was operating or occupying a motor
vehicle with three or fewer load bearing wheels;
(8) was operating an insured vehicle without
the express or implied consent of the owner; or
(9) was injured while occupying a motor
vehicle owned by, or furnished or available for the
regular use of, the injured person, or the injured
person's resident spouse or relative, if such motor
vehicle is not described in the policy under which
a claim is made, or is not a newly acquired or
replacement motor vehicle covered under the terms
of the policy.
(B) A personal protection insurer may include in
personal protection coverage any person under
subsection (A) if the insurer states its intent to
do so clearly on the policy.
Section 38-78-80. At the option of the personal
protection insurer, personal protection benefits
are payable to any of the following persons:
(1) the injured person;
(2) the parent or guardian of the injured
person, if the injured person is a minor or
incompetent;
(3) a survivor, executor, or administrator of
the injured person; or
(4) any other person or organization rendering
the services for which payment is due.
Section 38-78-90. (A) Subject to Section
38-78-80, a person who is entitled to receive
personal protection benefits may claim the benefits
in the following order up to the limits of personal
protection in the listed category:
(1) personal protection covering the motor
vehicle involved in the accident, if the person
<#PAGE>injured was an occupant of or was struck by the
motor vehicle. If the personal protection insurer
providing such insurance disclaims coverage, the
injured person shall be entitled to benefits under
any contract of personal protection insurance under
which he is a personal protection insured and the
insurer making such payments shall be entitled to
contest the disclaimer and seek full reimbursement
from the insurer disclaiming coverage;
(2) the personal protection under which the
injured person is or was an insured.
(B) If two or more insurers at the same priority
level are obligated to pay personal injury
benefits, the insurer against whom the claim is
first made shall pay the claim and may thereafter,
recover pro rata contributions from any other
insurer at the same priority level for the cost of
the payments and for processing the claim.
Disputes among insurers may be resolved only by
inter-company arbitration or inter-company
agreement. For purposes of this section, an
unoccupied parked motor vehicle is not a motor
vehicle involved in an accident unless it is parked
in such a way as to cause an unreasonable risk of
injury.
Section 38-78-100. (A) A personal protection
insurer is obligated to indemnify an injured
person, except that benefits payable for the same
accidental bodily injury under state-mandated
disability coverage or workers' compensation or
similar occupational compensation act shall be
subtracted from the personal protection benefits
payable to the injured person.
(B) A basic personal protection insurer must
offer a deductible to the named insured of a
personal protection policy in the amounts of two
hundred fifty dollars, five hundred dollars, and
one thousand dollars to apply with respect to a
claim by the named insured or a person residing in
the same household with the named insured. If the
named insured accepts such offer, the rate must be
reduced for such coverage in an amount filed by the
insurer and approved by the commissioner. The
named insured is not required to accept the offer
<#PAGE>and may choose personal protection coverage without
a deductible other than for property damage caused
by an uninsured motorist.
Section 38-78-110. (A) Any person who
registers, operates, maintains, or uses a motor
vehicle on the public roadways of this State and
their resident relatives shall, as a condition of
such registration, operation, maintenance, or use
of such motor vehicle and use of the public
roadways shall be conclusively presumed to have
accepted the limitations on his tort rights and
liabilities in this chapter unless he has filed a
rejection under Section 38-78-120.
(B) Tort liability with respect to accidents
occurring in this State and arising out of the
ownership, maintenance, or use of a motor vehicle
is abolished with respect to any person entitled to
benefits pursuant to Section 38-78-30(C) except to
the extent such person has sustained an injury as
defined in subsection (C) of this section or except
to the extent such person has sustained actual
economic loss in excess of the limits of any
applicable personal protection policy. Provided,
no person may recover noneconomic loss for personal
injury except as provided in subsection (C).
(C) In any action of tort brought against the
owner, registrant, operator, or occupant of a motor
vehicle with respect to which security has been
provided as required in this chapter, or against
any person or organization legally responsible for
his acts or omissions, a plaintiff may recover
damages in tort for pain, suffering, mental
anguish, and inconvenience because of bodily
injury, sickness, or disease arising out of the
ownership, maintenance, operation, or use of such
motor vehicle only in the event that the injury
reaches one of the following thresholds:
(1) the injury or disease consists in whole
or in part of permanent and serious disfigurement;
(2) permanent and serious bodily injury,
determined objectively, within reasonable medical
probability;
(3) permanent and serious loss of an
important bodily function; or
<#PAGE> (4) death.
(D) In any action where the defendant contends
that the plaintiff's injury does not meet the
standards set forth in section (C), either party
may seek summary judgment on that issue. If a
motion is made, the court may determine at least
thirty days before the date set for trial whether
there is a material issue of fact as to whether the
injury meets the standards of section (C) or if
not, render summary judgment in accordance with the
undisputed facts. If the facts regarding the
nature of the injury are undisputed, the question
as to whether or not the facts render the injury as
meeting the standards of section (C) is a question
of law to be decided by the court. In any action
to be tried before a jury where the defendant
contends the plaintiff's injury is not a serious
and permanent injury but the defendant concedes or
the court determines that there is a material issue
of fact as to whether the plaintiff's injury meets
the standards of section (C) then, upon motion of
the defendant, that issue shall be separately tried
and no other evidence as to plaintiff's noneconomic
loss shall be received until that issue has been
resolved. After resolution of that issue, the
amount of the plaintiff's noneconomic loss may be
tried before the same jury or a different jury, as
the court may in its discretion decide.
Section 38-78-120. (A) Any person may refuse to
consent to the limitations on his tort rights and
liabilities. To ensure preservation of the right
to choose to reject any limitations on tort rights
and liability contained in this chapter, any person
may execute a form approved by the commissioner for
rejecting such limitations. Within sixty days
after the enactment of this chapter, a temporary
committee composed of the commissioner, the
Consumer Advocate, two representatives of the South
Carolina Bar, (one specializing in the defense of
claims and one specializing in the prosecution of
claims) appointed by the Governor, a representative
of an automobile insurer appointed by the Consumer
Advocate, a member of the judiciary appointed by
the Chief Justice of the Supreme Court, an
<#PAGE>insurance agent appointed by the commissioner, and
one person specializing in readability appointed by
the Governor shall formulate the rejection form to
be used by all insurers in South Carolina. The
rejection forms for personal protection insurance
shall meet the readability index of no higher than
the ninth grade level on the Flesch Reading Ease
Test. The committee shall also develop a brochure
at no higher than the ninth grade level that must
be enclosed with the policyholder's renewal notice
the first time the policy is renewed after the
effective date of this chapter.
(B) The form shall establish the effective date
of such a rejection. Any rejection by a person who
is under a legal disability shall be made on behalf
of such person by a parent, legal guardian,
conservator, or committee and shall remain in
effect until revoked or until the person is no
longer under legal disability, whichever is sooner.
The failure of such guardian, parent, conservator,
or committee of a person under a legal disability
to file a rejection, within six months from the
date that this chapter would otherwise become
applicable to such person, is deemed to be an
affirmative acceptance of the limitations on tort
liability. Any person who at the time of an
accident does not have basic personal protection
but has not formally rejected such limitations and
has in effect security equivalent to that required
by Section 38-77-140 is deemed to have fully
rejected the tort limitations for that accident
only.
(C) A rejection of tort limitations must be
immediately filed with the insurance company or
agent who provides the insurance policy and is
effective on the effective date of the policy. The
rejection applies to any motor vehicle accident
occurring on or after that date. The rejection
remains effective until it is revoked in writing on
a form approved by the commissioner at the time of
renewal or issuance of a new policy by the purchase
of a tort policy. The revocation of the rejection
is effective until it is withdrawn in a manner
prescribed by the commissioner. The rejection form
<#PAGE>must be provided by the insurer or agent to the
insured upon the written request of the insured or
the request of a person with the legal capacity to
ask for the insured.
(D) The commissioner shall establish and
maintain a program designed to assure that all
consumers are adequately informed about the
comparative cost of personal protection insurance
and liability insurance for those persons who
choose to reject limitations on tort rights and
liabilities, as well as the benefits, rights and
responsibilities of insureds under each type of
insurance.
(E) A person who has personal protection
coverage or who rejects tort limitations on a form
approved by the commissioner is bound by that
choice and is precluded from claiming liability of
any party based on being inadequately informed as
to the coverage or rejection. This restriction
also applies to relatives residing in the same
household who are covered by the same policy.
(F) Each motor vehicle insurer issuing motor
vehicle liability insurance in this State may
require that all policies within a household be
either personal protection policies or liability
policies which satisfy the financial responsibility
laws of this State. However, policies purchased
separately by members of the same household may be
different policies.
(G) To further insure preservation of the right
to reject the limitations on tort rights contained
in this chapter, the commissioner shall establish
procedures whereby any person who does not own a
motor vehicle and who is not a resident relative of
such an owner may, after sustaining accidental
bodily injury, execute a form prescribed by the
commissioner for rejecting such limitation within
sixty days after the date of the accident. If any
personal protection benefits are paid before the
rejection is effective, the personal protection
insurer has a right of subrogation for any payments
made through a tort recovery.
Section 38-78-125. (A) A person may bring a
cause of action for injury against a person who
<#PAGE>caused him actual economic loss, for any
uncompensated economic loss.
(B) A person suffering accidental bodily injury
while occupying or when struck by a motor vehicle
which is insured for personal protection and who is
not at the time of the accident covered by a
rejection of limitations on tort rights and
liabilities under Section 38-78-120 and is not an
uninsured motorist may receive personal protection
benefits applicable to the motor vehicle and has a
right to claim uncompensated economic loss against
the personal protection insured. A person who
files a claim under this subsection has the same
rights and duties as a personal protection insured
with respect to a claim by that insured.
(C) An uninsured injured motorist may not claim
in tort for property damage except for such damage
that exceeds ten thousand dollars or for
noneconomic damages, unless the motor vehicle
operator is driving under the influence of alcohol
or illegal drugs or is guilty of intentional
misconduct. An uninsured motorist retains fault
liability with respect to others. A person driving
under the influence of alcohol or illegal drugs may
not claim in tort for either economic or
noneconomic damages against a person who has
rejected tort limitations. A person who rejects
tort limitations shall not collect personal
protection benefits unless he or she has revoked
his or her rejection under Section 38-78-120(C).
(D) A personal protection insured has a cause of
action against another personal protection insured
for property damage to recover any required
deductible.
Section 38-78-140. (A) Personal protection
benefits are payable monthly as loss accrues. Loss
accrues not when the injury occurs but as work
loss, replacement services loss, or medical expense
is incurred. The benefits are overdue if they are
not paid within thirty days after the personal
protection insurer receives reasonable proof of the
fact and the amount of loss sustained, except that
a personal protection insurer may accumulate claims
for a period not to exceed thirty days, in which
<#PAGE>case benefits are not overdue if they are paid
within twenty days after the period of
accumulation. If reasonable proof is not supplied
for the whole claim, the amount supported by
reasonable proof is overdue if it is not paid
within thirty days after the proof is received by
the insurer. Any part or all of the remainder of
the claim that is later supported by reasonable
proof is overdue if it is not paid within thirty
days after the proof is received by the insurer.
To determine the extent to which any benefits are
overdue, a payment is treated as made on the date
a draft or other valid instrument is mailed or, if
not so posted, the date of delivery. The personal
protection insurer may pay personal protection
benefits directly to a person who supplies
necessary products, services, or accommodations to
the injured person. All overdue payments shall
bear an annual eighteen percent interest rate.
(B) In addition to the interest payments, if the
insured has filed suit to recover overdue payments,
the insured shall be entitled to reasonable
attorney's fees and costs incurred in such suit.
The recovery set forth here is the exclusive remedy
for an insurer's failure to pay or delay in paying
personal protection benefits for conduct of an
insurer arising out of the manner in which the
insurer denied or delayed payment. An attorney
shall not charge a separate fee to collect benefits
except those incurred in connection with the suit
for overdue payments. In any action by or on
behalf of an insurer, a provider or an insured,
attorney's fees shall be awarded only to the
prevailing party.
(C) An insurer who rejects a claim for basic
personal protection benefits shall give to the
claimant prompt written notice of the rejection,
specifying the reason.
Section 38-78-150. (A) Personal protection
benefits, except medical benefits, are exempt from
garnishment, attachment, execution, or any other
process or claim to the extent that wages or
earnings are exempt under any applicable law.
<#PAGE> (B) An agreement for assignment of any right to
personal protection benefits payable in the future,
except for medical benefits, is unenforceable
except to the extent that the benefits are for the
cost of products, services, or accommodations
provided or to be provided by the assignee or that
the benefits are for loss of income from work or
replacement services and are assigned to secure
payment of alimony, maintenance, or child support.
Section 38-78-160. An insurer is allowed a
reasonable attorney fee for defending a claim for
benefits that is fraudulent or so excessive as to
have no reasonable foundation. The fee may be
treated as an offset against benefits due or which
thereafter accrue. The insurer may recover from
the claimant any part of the fee not offset or
otherwise paid.
Section 38-78-170. An insurer under a policy of
personal protection insurance may require written
notice to be given as soon as practicable after an
accident involving a secured vehicle for which it
provides coverage.
Section 38-78-190. If no personal protection
benefits have been paid other than death benefits,
a person may bring an action against the personal
protection insurer not later than two years after
the accidental bodily injury occurred. If personal
protection benefits have been paid, a person may
bring an action to recover further benefits not
later than two years after the last payment of
benefits or four years after the date the
accidental bodily injury occurred, whichever is
earlier.
Section 38-78-200. (A) If the mental or
physical condition of an injured person is material
to any claim for past or future personal protection
benefits, the injured person shall submit to
reasonable mental or physical examinations by a
physician or physicians designated by the insurer,
at the insurer's expense. The examinations shall
take place at a reasonably convenient time and
location. A personal protection insurer may
include provisions of this nature in a personal
protection policy.
<#PAGE> (B) If after a request by a personal protection
insurer a person refuses to submit to reasonable
mental and physical examinations by a physician or
physicians designated by the insurer or refuses to
undergo mental or rehabilitation services payable
by the insurer, the insurer, on written notice, may
deny benefits applicable to the period during which
the person refuses to submit to the examination.
Section 38-78-210. (A) On request by a claimant
or personal protection insurer, an employer shall
provide information on a form approved by the
commissioner, including the work records and
earnings, regarding an employee who has filed a
claim for personal protection benefits. On request
of the claimant or insurer the information must
cover the period specified by the claimant or
insurer making the request and may include a
reasonable period before, and the entire period
after, the injury.
(B) The claimant, upon request by the insurer,
must provide to the insurer the names and addresses
of the physicians and medical facilities rendering
diagnosis or treatment in regard to the injury or
to a relevant injury and the claimant shall
authorize the insurer to inspect and copy any
relevant medical records.
(C) Every physician or other health care
provider, including, but not limited to, a
hospital, clinic, or other medical institution
providing, before or after an injury resulting from
a motor vehicle accident upon which a claim for
personal protection benefits is based, any
products, services, or accommodations in relation
to that or any other injury, or in relation to a
condition claimed to be connected with that or any
other injury, shall, if requested to do so by the
personal protection insurer against whom the claim
has been made, furnish a written report of the
history, condition, treatment, and the dates and
costs of such treatment, of the injured person.
Every such physician or other health care provider,
hospital, clinic, or other medical institution
shall also promptly produce and permit the
inspection and copying of its records regarding
<#PAGE>such history, condition, and treatment, and the
dates and costs of treatment. A physician
providing such information to a personal protection
insurer shall be entitled to a fee of fifty cents
per page for providing copies of the medical
record, provided a minimum fee of ten dollars plus
postage is authorized. Physicians may charge other
reasonable fees for the production of other reports
or information requested by the personal insurance
carrier.
(D) No cause of action for violation of a
physician-patient privilege or invasion of the
right of privacy is allowed against any physician
or other health care provider, hospital, clinic, or
other medical institution complying with the
provisions of this section.
(E) The person requesting records and a sworn
statement under this section shall pay all
reasonable costs connected therewith.
(F) A court may order or prohibit discovery of
any records under this section in case of any
dispute as to the right of a claimant or insurer to
discover the information required to be disclosed
by this section.
Section 38-78-240. A physician or other health
care provider, including, but not limited to, a
hospital, clinic, or other health care institution
rendering treatment to an injured person, may
charge only a reasonable amount for the products,
services, and accommodations rendered. The charge
shall not exceed the amount the person or
institution customarily charges for the products,
services, and accommodations in cases not involving
automobile insurance.
Section 38-78-260. The commissioner shall adopt
rules which encourage personal protection insurers
to institute incentives for personal protection
insureds to install, maintain, and make use of
injury-reducing devices such as seat and harness
belts, air bags, and child restraint systems.
Section 38-78-280. (A) Each insurer authorized
to transact business or transacting business in
this State shall file with the commissioner a form
approved by the commissioner which states that any
<#PAGE>contract of motor vehicle liability insurance,
wherever issued, covering the maintenance or use of
a motor vehicle while the motor vehicle is in this
State, is deemed to satisfy Section 38-78-40 once
the vehicle has been continuously present in this
State for thirty days unless the named insured has
rejected the limitations on tort rights and
liabilities under Section 38-78-120.
(B) If a person is entitled to personal
protection benefits or their equivalent under the
requirements of more than one state, the person
shall elect to recover under the laws of one state.
The election represents the exclusive source of
recovery of all personal protection benefits, or
their equivalent, paid or payable under the
financial responsibility requirements of that or
any other state.
Section 38-78-290. All insurance coverages
provided under this chapter are subject to such
terms, conditions, and exclusions which have been
approved by the commissioner.
Section 38-78-325. The commissioner may
promulgate regulations for effective administration
which are fair, equitable, and consistent with the
purpose of this chapter."
SECTION 2. Section 38-77-30(1) of the 1976
Code is amended to read:
"(1) `Automobile insurance' means automobile
bodily injury and property damage liability
insurance, including medical payments and uninsured
motorist coverage, and automobile physical damage
insurance such as automobile comprehensive physical
damage, collision, fire, theft, combined additional
coverage, and similar automobile physical damage
insurance and economic loss benefits as provided by
this chapter written or offered by automobile
insurers. Automobile insurance policy includes a
motor vehicle liability policy as defined in item
(7) of Section 56-9-20 and includes the personal
protection policy as defined in Section
38-78-30(C)."
SECTION 3. Section 38-77-110(B) of the 1976
Code, as added by Act 148 of 1989, is amended by
adding the following:
<#PAGE> "(5) two hundred fifty thousand dollars for
added personal protection coverage as defined in
Section 38-78-30(B)."
SECTION 4. Article 3, Chapter 77, Title 38 of
the 1976 Code is amended by adding:
"Section 38-77-355. (A) In a claim or action
for personal injury or wrongful death arising out
of the ownership, operation, use, or maintenance of
a motor vehicle, the court shall admit into
evidence the total amount paid to the claimant from
collateral sources, and the court shall instruct
the jury to deduct from its verdict the value of
all benefits received by the claimant from
collateral sources.
(B) For purposes of this section, `collateral
sources' means payments made to the claimant, or on
his behalf, by or pursuant to:
(1) automobile liability, uninsured motorist,
underinsured motorist, or automobile accident
insurance that provides health benefits or income
disability coverage;
(2) personal protection benefits paid or
payable by law;
(3) payments made from a policy of automobile
insurance by or on behalf of a joint tortfeaser,
either by way of settlement or judgment.
(C) No claimant may make claim or demand, no
court may order payment, and no insurer may pay by
way of settlement, covenant not to sue, or trust or
loan agreement for an item of damages to the extent
that the claimant has already received, or will
receive, reimbursement for that item as a result of
a collateral source payment as defined in this
section."
SECTION 5. Section 38-77-280 of the 1976
Code, as last amended by Act 113 of 1991, is
further amended to read:
"Section 38-77-280. <STRK>(A) Except as provided in
subsection (B), all automobile insurers, including
those insurance companies writing private passenger
physical damage coverages only, shall make
collision coverage and either comprehensive or
fire, theft, and combined additional coverage
<#PAGE>available to an insured or qualified applicant who
requests the coverage.
Collision coverage must have a mandatory
deductible of two hundred fifty dollars, but an
insured or qualified applicant, as his option, may
select an additional deductible in appropriate
increments up to one thousand dollars.
Comprehensive coverage or fire, theft, and
combined additional coverages must have a mandatory
deductible of two hundred fifty dollars, but an
insured, at his option, may select an additional
deductible in appropriate increments up to one
thousand dollars. This deductible does not apply
to auto safety glass. It is an unfair trade
practice, as described in Sections 38-57-30 and
38-57-40, for an insurer or an agent to sell
collision insurance, comprehensive coverage, or
fire, theft, and combined additional coverages
unless the insured is notified at the time of
application of the savings which may be realized if
the applicant or the insured selects a higher
deductible. This notice is required only at the
time of the initial sale and must be in a form
approved by the Chief Insurance Commissioner. An
insurer may offer insureds lower deductibles at the
insurer's option.
(B) Notwithstanding subsection (A) and Sections
38-77-110 and 38-77-920, automobile insurers may
refuse to write automobile physical damage
insurance coverage, including automobile
comprehensive physical damage, collision, fire,
theft, and combined additional coverage, for an
applicant or existing policyholder, on renewal, for
a motor vehicle customarily operated by an
individual, either the named insured or any other
operator not excluded in accordance with Section
38-77-340 and who resides in the same household,
where one or more of the conditions or factors
prescribed in Section 38-73-455 exist. In
addition, automobile insurers may refuse to write
physical damage insurance coverage to any applicant
or existing policyholder, on renewal, who has
collected benefits provided under any automobile
insurance physical damage coverage during the
<#PAGE>thirty-six months immediately preceding the
effective date of coverage, for two or more total
fire losses or two or more total theft losses.
Automobile insurers may refuse to write for private
passenger automobiles comprehensive physical
damage, collision, fire, theft, and combined
additional coverage, for an applicant or existing
policyholder, on renewal, for a motor vehicle
customarily operated by an individual, either the
named insured or another operator not excluded in
accordance with Section 38-77-340 and who resides
in the same household, which does not qualify for
the safe driver discount in Section 38-73-760(e).
(C) Notwithstanding Section 38-77-110,
automobile physical damage coverage in an
automobile insurance policy may be canceled at any
time during the policy period by reason of the
factors or conditions described in Section
38-73-455(A) or Section 38-77-280(B) which existed
before the commencement of the policy period and
which were not disclosed to the insurer at the
commencement of the policy period.
(D) No policy of insurance which provides
automobile physical damage coverage only may be
ceded to the facility.
(E) Insurers of automobile insurance may charge
a rate for physical damage insurance coverages
different than those provided for in Section
38-73-457 if the rates are filed and approved by
the Chief Insurance Commissioner. Any applicant or
existing policyholder, to be charged this different
rate, must be denied the coverage pursuant to
subsection (B) at the rate provided in Section
38-73-457.
(F) A carrier may not cede collision coverage,
comprehensive coverage, or fire, theft, and
combined additional coverages with a deductible of
less than two hundred fifty dollars. An insured or
qualified applicant may select an additional
deductible in appropriate increments up to one
thousand dollars. However, the mandatory
deductible does not apply to safety glass.</STRK>
Notwithstanding Sections 38-77-110 and 38-77-920,
after September 30, 1992, automobile insurers may
<#PAGE>refuse to write or renew private passenger
automobile physical damage insurance coverage,
including automobile comprehensive physical damage,
collision, fire, theft, and combined additional
coverage for an applicant or existing policyholder.
After September 30, 1992, no private passenger
automobile physical damage insurance coverage may
be ceded to the Facility."
SECTION 6. Section 38-77-30(4) of the 1976
Code is amended to read:
"(4) `Damages' includes <STRK>both</STRK> actual <STRK>and
punitive</STRK> damages only."
SECTION 7. Section 38-77-140 of the 1976 Code
is amended to read:
"Section 38-77-140. (A) No automobile
insurance policy may be issued or delivered in this
State to the owner of a motor vehicle or may be
issued or delivered by an insurer licensed in this
State upon any motor vehicle then principally
garaged or principally used in this State, unless
it contains a provision insuring the persons
defined as insured against loss from the liability
imposed by law for actual damages arising out of
the ownership, maintenance, or use of these motor
vehicles within the United States or Canada,
subject to limits exclusive of interest and costs,
with respect to each motor vehicle, as follows:
fifteen thousand dollars because of bodily injury
to one person in any one accident, and, subject to
the limit for one person, thirty thousand dollars
because of bodily injury to two or more persons in
any one accident, and five thousand dollars because
of injury to or destruction of property of others
in any one accident. Nothing in this article
prevents an insurer from issuing selling, or
delivering a policy providing liability coverage in
excess of these requirements.
(B) An insurer shall also offer the insured, in
accordance with Section 38-77-350, a rider or
endorsement for an additional premium to cover such
liability for punitive damages. The insured has
the option of accepting or refusing coverage for
punitive damages.
<#PAGE> As a result of passage of this section, all
insurers offering bodily injury liability coverage
shall file with the Chief Insurance Commissioner,
not later than ninety days after the effective date
of this act, revised premium rates for bodily
injury liability coverage to be effective on
automobile insurance policies issued or renewed
with effective dates on or after January 1, 1993.
The revised rates must be approved by the
commissioner and reflect a reduction in the
currently approved premium rate for this coverage
of at least one and one-half percent. Insurers
shall file with the commissioner not later than
sixty days after the effective date of this act
premium charges for the punitive damages loss
coverage. The premium rate for this coverage shall
become effective for the automobile insurance
policies issued or renewed with effective dates on
or after January 1, 1993, and may not be approved
if it is more, when combined with the reduced
premium rate for the new bodily injury liability
coverage with limitations on the recovery of
punitive damages, than the bodily injury liability
premium rate for that insurer on the effective date
of this act; however, after December 31, 1993, an
insurer may apply to the Chief Insurance
Commissioner for a rate adjustment for such
coverage, based on its actual experience."
SECTION 8. Section 38-77-150 of the 1976 Code
is amended to read:
"Section 38-77-150. (A) No automobile
insurance policy or contract may be issued or
delivered unless it contains a provision by
endorsement or otherwise, herein referred to as the
uninsured motorist provision, undertaking to pay
the insured all sums which he is legally entitled
to recover as actual damages from the owner or
operator of an uninsured motor vehicle, within
limits which <STRK>may be</STRK> are no less than the
requirements of Section 38-77-140 and no more than
the insured's bodily injury and property damage
liability limits. <STRK>The uninsured motorist provision
shall also provide for no less than five thousand
dollars' coverage for injury to or destruction of
<#PAGE>the property of the insured in any one accident but
may provide an exclusion of the first two hundred
dollars of the loss or damage.</STRK>
(B) Automobile insurers shall offer, at the
option of the insured and in the manner hereinafter
described, higher limits of uninsured motorist
coverage in accordance with Section 38-77-350. The
offer of higher limits must be made in connection
with every initial application for an automobile
insurance policy by including a written explanation
of the coverage and inquiry of the applicant, in a
form prescribed by the Chief Insurance
Commissioner, as to whether the applicant desires
to purchase uninsured motorist coverage with limits
greater than the mandatory coverages described in
subsection (A). No such explanation or inquiry
need be made with respect to any renewal,
replacement, reinstatement, substitute, or
modification of the policy. An insured may, at any
time and subject to the limits of this section,
specifically request in writing uninsured motorist
coverage limits greater than that provided on the
current or any prior policy.
(C) Insurers shall offer on a form prescribed by
the Chief Insurance Commissioner `nonstackable'
policies of uninsured motorist coverage containing
policy provisions establishing that if the insured
accepts this offer:
(1) Regardless of the number of vehicles
involved, persons covered, number of premiums paid,
or vehicles or premiums shown on the policy or
policies under which the insured might otherwise be
entitled to benefits, the coverage provided as to
two or more motor vehicles under the same or
different policies may not under any circumstances
be added together, combined with, or stacked to
determine the limit of insurance coverage available
to an injured person for any one accident, except
as provided in item (3) of this subsection (C).
(2) If at the time of the accident the
injured person is occupying a motor vehicle, the
uninsured motorist coverage available to him is the
coverage available as to that motor vehicle.
<#PAGE> (3) If the injured person is occupying a
motor vehicle which is not owned by him or by a
family member residing with him, he is entitled to
the highest limits of uninsured motorist coverage
afforded for any one vehicle as to which he is
named insured. Such coverage is excess over the
coverage on the vehicle he is occupying.
(4) The uninsured motorist coverage provided
by the policy does not apply to the named insured
who is injured while occupying any vehicle owned by
the named insured for which uninsured motorist
coverage was not purchased.
(5) If at the time of the accident the
injured person is not occupying a motor vehicle, he
is entitled to select any one limit of uninsured
motorist coverage for any one vehicle afforded by
a policy under which he is insured as a named
insured.
(6) In connection with the offer authorized
by this subsection, insurers shall inform the named
insured, applicant, or lessee, on a form prescribed
by the Chief Insurance Commissioner, of the
limitations imposed under this subsection and that
such coverage is an alternative to coverage without
such limitations. If this form is signed by a
named insured, applicant, or lessee, it is
conclusively presumed that there was an informed,
knowing acceptance of such limitations, and neither
the insurance company nor the insurance agent has
any liability to the insured for the insured's
failure to purchase stackable coverage. When the
named insured, applicant, or lessee has initially
accepted such limitations, the acceptance applies
to any policy which renews, extends, changes,
supersedes, reinstates or replaces an existing
policy unless the named insured requests deletion
of the limitations and pays the appropriate premium
for the coverage. Any insurer who provides
coverage which includes the limitations provided in
this subsection shall file revised premium rates
with the Department of Insurance for such uninsured
motorist coverage to take effect before initially
providing such coverage. The revised rates must
reflect the anticipated reduction in loss costs
<#PAGE>attributable to such limitations but, in any event,
must reflect a reduction in the uninsured motorist
coverage premium of at least fifteen percent for
policies with such limitations. Insurers shall
file within ninety days after the effective date of
this act, revised premium rates with the Chief
Insurance Commissioner to be effective on
automobile insurance policies issued or renewed
with effective dates on or after January 1, 1993.
(D) Premium rates made by insurers for uninsured
motorist coverage must be determined and regulated
as premium rates for automobile insurance generally
are determined and regulated. The Chief Insurance
Commissioner <STRK>may prescribe</STRK> shall approve the form
to be used in providing uninsured motorist coverage
and <STRK>when prescribed and promulgated</STRK> no other form
may be used.
(E) No action may be brought under the uninsured
motorist provision unless copies of the pleadings
in the action establishing liability are served in
the manner provided by law upon the insurer writing
the uninsured motorist provision. The insurer has
the right to appear and defend in the name of the
uninsured motorist in any action which may affect
its liability and has thirty days after service of
process on it in which to appear. The evidence of
service upon the insurer may not be made a part of
the record.
(F) Benefits paid pursuant to this section are
subject to subrogation and assignment."
SECTION 9. Section 38-77-160 of the 1976
Code, as last amended by Act 148 of 1989, is
further amended to read:
"Section 38-77-160. (A) Automobile <STRK>insurance
carriers</STRK> insurers shall offer on a form prescribed
by the Chief Insurance Commissioner, at the option
of the insured in accordance with Section 38-77-350
<STRK>uninsured</STRK> underinsured motorist coverage <STRK>up to the
limits of the insured's liability coverage in
addition to the mandatory coverage prescribed by
Section 38-77-150. Such carriers shall also offer,
at the option of the insured, underinsured motorist
coverage up to the limits of the insured liability
coverage to provide coverage in the event that
<#PAGE>damages are sustained in excess of the liability
limits carried by an at fault insured or
underinsured motorist. If, however, an insured or
named insured is protected by uninsured or
underinsured motorist coverage in excess of the
basic limits, the policy shall provide that the
insured or named insured is protected only to the
extent of the coverage he has on the vehicle
involved in the accident. If none of the insured's
or named insured's vehicles is involved in the
accident, coverage is available only to the extent
of coverage on any one of the vehicles with the
excess or underinsured coverage.</STRK> up to the limits
selected for the insured's liability coverage to
provide coverage in the event the insured becomes
legally entitled to collect damages from the owner
or operator of an underinsured motor vehicle, as
defined in Section 38-77-30(14). The maximum
liability of the insurer under the underinsured
motorist coverage provided is the lesser of: (1)
the difference between the limit of underinsured
motorist coverage and the amount paid or payable to
the insured by or for any person or organization
who is held legally liable for the bodily injury or
property damage, or (2) the amount of damages
sustained, but not recovered. In no event may the
liability of the insurer under such coverage be
more than the limits of underinsured motorist
coverage provided.
(B) An insured entitled to benefits under an
uninsured motorist provision is not entitled to
benefits under an underinsured motorist provision.
An insured entitled to benefits under an
underinsured motorist provision is not entitled to
benefits under an uninsured motorist provision.
(C) Insurers shall offer on a form prescribed by
the Chief Insurance Commissioner `nonstackable'
policies of underinsured motorist coverage
containing policy provisions establishing that if
the insured accepts this offer:
(1) Regardless of the number of vehicles
involved, persons covered, number of premiums paid,
or vehicles or premiums shown on the policy or
policies under which the insured might otherwise be
<#PAGE>entitled to benefits, the coverage provided as to
two or more motor vehicles under the same or
different policies may not under any circumstances
be added together, combined with, or stacked to
determine the limit of insurance coverage available
to an injured person for any one accident, except
as provided in item (3) of this subsection (C).
(2) If at the time of the accident the
injured person is occupying a motor vehicle, the
underinsured motorist coverage available to him is
the coverage available as to that motor vehicle.
(3) If the injured person is occupying a
motor vehicle which is not owned by him or by a
family member residing with him, he is entitled to
the highest limits of underinsured motorist
coverage afforded for any one vehicle as to which
he is named insured. Such coverage is excess over
the coverage on the vehicle he is occupying.
(4) The underinsured motorist coverage
provided by the policy does not apply to the named
insured who is injured while occupying any vehicle
owned by the named insured for which underinsured
motorist coverage was not purchased.
(5) If at the time of the accident the
injured person is not occupying a motor vehicle, he
is entitled to select any one limit of underinsured
motorist coverage for any one vehicle afforded by
a policy under which he is insured as a named
insured.
(6) In connection with the offer authorized
by this subsection, insurers shall inform the named
insured, applicant, or lessee, on a form prescribed
by the chief insurance commissioner, of the
limitations imposed under this subsection and that
such coverage is an alternative to coverage without
such limitations. If this form is signed by a
named insured, applicant, or lessee, it is
conclusively presumed that there was an informed,
knowing acceptance of such limitations, and neither
the insurance company nor the insurance agent has
any liability to the insured for the insured's
failure to purchase stackable coverage. When the
named insured, applicant, or lessee has initially
accepted such limitations, the acceptance applies
<#PAGE>to any policy which renews, extends, changes,
supersedes, reinstates or replaces an existing
policy unless the named insured requests deletion
of the limitations and pays the appropriate premium
for the coverage.
(D) If an insured is entitled to uninsured
motorist or underinsured motorist coverage under
more than one policy the maximum amount the insured
may recover may not exceed the highest limit of
such coverage provided for any one vehicle under
any one policy. If more than one policy applies,
the following is the order of priority: (1) a
policy covering a motor vehicle occupied by the
injured person at the time of the accident; (2) a
policy covering a motor vehicle not involved in the
accident under which the injured person is named
insured; (3) a policy covering a motor vehicle not
involved in the accident under which the injured
person is an insured other than a named insured.
Coverage available under a lower priority policy
applies only to the extent it exceeds the coverage
of a higher priority policy. The underinsured
motorist coverage does not apply to bodily injury,
sickness, or death of an insured while occupying a
motor vehicle owned by, furnished, or available for
the regular use of the insured, a resident spouse,
or resident relative, if such motor vehicle is not
described in the policy under which a claim is
made, or is not a newly acquired or replacement
vehicle covered under the terms of the policy.
(E) Underinsured motorist <STRK>Benefits</STRK> benefits paid
pursuant to this section are <STRK>not</STRK> subject to
subrogation and assignment.
(F) No action may be brought under the
underinsured motorist provision unless copies of
the pleadings in the action establishing liability
are served in the manner provided by law upon the
insurer writing the underinsured motorist
provision. The insurer has the right to appear and
defend in the name of the underinsured motorist in
any action which may affect its liability and has
thirty days after service of process on it in which
to appear. The evidence of service upon the
insurer may not be made a part of the record. In
<#PAGE>the event the automobile insurance insurer for the
putative at-fault insured chooses to settle in part
the claims against its insured by payment of its
applicable liability limits on behalf of its
insured, the underinsured motorist insurer may
assume control of the defense of action for its own
benefit. No underinsured motorist policy may
contain a clause requiring the insurer's consent to
settlement with the at-fault party.
Insurers offering uninsured motorist coverage
must file with the commissioner no more than ninety
days after the effective date of this act revised
premium rates for this coverage to be effective on
all policies of automobile insurance containing
such coverage issued on or renewed with effective
dates on or after January 1, 1993. The revised
rate must be approved by the commissioner and
reflect a reduction in the currently approved
premium rate for this coverage of at least eighteen
percent; provided, however, that after December 31,
1993, an insurer may apply to the Chief Insurance
Commissioner for a rate adjustment for such
coverage, based on its actual experience. In the
first year following such reductions, an insurer
may apply to the Chief Insurance Commissioner for
a rate adjustment, based on its actual experience,
and include consideration of the time value of
money."
SECTION 10. Section 56-9-350 of the 1976 Code
is amended to read:
"Section 56-9-350. The operator or owner of a
motor vehicle involved in an accident resulting in
property damage of four hundred dollars or more or
in bodily injury or death<STRK>, must be furnished a
written request form at the time of the accident,
or as soon after the accident as possible, by the
investigating officer for completion and
verification of liability insurance coverage, the
form to be in a manner prescribed by the
Department.
The completed and verified form must be returned
by the operator or owner to the Department within
fifteen days from the date the form was delivered
by the officer. Failure to return the form,
<#PAGE>verified in the proper manner, is prima facie
evidence that the vehicle was uninsured.
The operator or owner of a motor vehicle
involved in an accident resulting in property
damage of four hundred dollars or more, or in
bodily injury or death, which was not investigated
by a law enforcement officer shall furnish to the
Department a written report and verification of
liability insurance coverage, the proof to be in a
manner prescribed by the Department</STRK> within fifteen
days after the accident, shall forward a written
report of the accident to the department on a form
prescribed by the department. The report must
contain information to enable the department to
determine whether the requirements for the deposit
of security under Section 56-9-351 are inapplicable
by reason of the existence of insurance or other
exceptions specified in this title. Failure to
file the report, in the proper verified manner, is
prima facie evidence that the vehicle was not
registered in compliance with this title."
SECTION 11. Section 56-10-10 of the 1976 Code
is amended to read:
"Section 56-10-10. <STRK>Every owner of a motor
vehicle required to be registered in this State
shall maintain the security required by Section
56-10-20 with respect to each such motor vehicle
owned by him throughout the period the registration
is in effect.</STRK> Security must be maintained on every
motor vehicle required to be registered in this
State where the owners or other operators not
excluded in accordance with Section 38-77-340,
reside in the same household and are insureds under
the same policy, if one of the owners or other
operators do not qualify for the safe driver
discount in Section 38-73-760(E). Such security
must be maintained with respect to each such motor
vehicle owned by him throughout the period the
registration is in effect. No certificate of
registration may be issued or transferred to an
owner by the executive director unless the owner or
prospective owner produces satisfactory evidence
that the security is in effect, including the name
of the owner's automobile liability insurer, the
<#PAGE>name of the agent, the identification number of the
insurance policy, and the effective dates of the
policy, except in cases where other security is
approved."
SECTION 12. Section 56-10-220 of the 1976 Code
is amended to read:
"Section 56-10-220. Every person required to
provide security on a motor vehicle as provided in
Section 56-10-10 applying for registration for a
motor vehicle shall at the time of such
registration and licensing declare the vehicle to
be an insured motor vehicle under the penalty set
forth in Section 56-10-260 and shall execute and
furnish to the department his certificate that such
motor vehicle is an insured motor vehicle and that
he will maintain insurance thereon during the
registration period. The certificate must be in
the form prescribed by the department. The
department may require any registered owner or any
applicant for registration and licensing of a motor
vehicle declared to be an insured motor vehicle to
submit a certificate of insurance executed by an
authorized agent or representative of an insurance
company authorized to do business in this State.
Such certificate must also be in a form prescribed
by the department."
SECTION 13. Section 56-10-240 of the 1976 Code
is amended to read:
"Section 56-10-240. If, during the period for
which it is licensed, a motor vehicle for which
security is required as provided in Section
56-10-10 is or becomes an uninsured motor vehicle,
then the vehicle owner immediately shall obtain
insurance on the vehicle or within five days after
the effective date of cancellation or expiration of
his liability insurance policy surrender the motor
vehicle license plates and registration
certificates issued for the motor vehicle. If five
working days after the last day to pay an
automobile liability insurance premium, whether it
is the premium due date or a grace period that is
granted customarily or contractually a motor
vehicle is an uninsured motor vehicle, the insurer
shall give written notice, or notice by magnetic or
<#PAGE>electronic media in a manner considered
satisfactory to the department, within ten days
after the five-day period ends, in addition to that
notice previously given in accordance with law, by
delivery under United States Post Office bulk
certified mail, return receipt requested, to the
department of the cancellation or refusal to renew
under the following circumstances:
(1) the lapse or termination of such insurance
or security occurs within three months of issuance
provided that this subsection only applies to new
policies, and not renewal or replacement policies;
or
(2) the lapse or termination occurs after three
months for a resident <STRK>who fails one or more of the
objective standards prescribed in Section 38-73-455</STRK>
who does not qualify for the safe driver discount
in Section 38-73-760(E). The department may, in
its discretion, authorize insurers to utilize
alternative methods of providing notice of
cancellation of or refusal to renew to the
department. The department may not reissue
registration certificates and license plates for
that vehicle until satisfactory evidence has been
filed by the owner or by the insurer who gave the
cancellation or refusal to renew notice to the
department that the vehicle is insured. Upon
receiving information to the effect that a policy
is canceled or otherwise terminated on a motor
vehicle registered in South Carolina, the
department shall suspend the license plates and
registration certificate and shall initiate action
as required within fifteen days of the notice of
cancellation to pick up the license plates and
registration certificate. A person who has had his
license plates and registration certificate
suspended by the department, but who at the time of
suspension possesses liability insurance coverage
sufficient to meet the financial responsibility
requirements as set forth in this chapter, has the
right to appeal the suspension immediately to the
Chief Insurance Commissioner. If the commissioner
determines that the person has sufficient liability
insurance coverage, he shall notify the department,
<#PAGE>and the suspension is voided immediately. The
department shall give notice by first class mail of
the cancellation or suspension of registration
privileges to the vehicle owner at his last known
address. However, when license plates are
surrendered pursuant to this section, they must be
held at the department office in the county where
the person who surrenders the plates resides.
If the vehicle owner unlawfully refuses to
surrender the suspended items as required in this
article, the department through its designated
agents or by request to a county or municipal law
enforcement agency may take possession of the
suspended license plates and registration
certificate and may not reissue the registration
until proper proof of liability insurance coverage
is provided and until the owner has paid a
reinstatement fee of two hundred dollars for the
first refusal under this section, and three hundred
dollars for each subsequent refusal. A person who
voluntarily surrenders his license plates and
registration certificate before their suspension
shall only be charged a reinstatement fee of five
dollars.
A person wilfully failing to return his motor
vehicle license plates and registration
certificates as required in this section is guilty
of a misdemeanor and, upon conviction, must be
punished as follows:
(1) for a first offense, fined not less than one
hundred dollars nor more than two hundred dollars
or imprisoned for thirty days;
(2) for a second offense, fined two hundred
dollars or imprisoned for thirty days, or both;
(3) for a third and subsequent offense,
imprisoned for not less than forty-five days nor
more than six months.
Only convictions which occurred within ten years
including and immediately preceding the date of the
last conviction constitute prior convictions within
the meaning of this section."
SECTION 14. Chapter 10, Title 56 of the 1976
Code is amended by adding:
<#PAGE>
Section 56-10-510. As used in this article:
(1) `Conviction' includes the entry of any plea
of guilty or nolo contendere and the forfeiture of
any bail or collateral deposited to secure a
defendant's appearance.
(2) `Insured motor vehicle' is a motor vehicle
as to which (a) there is bodily injury liability
insurance and property damage liability insurance,
both in the amounts specified in Section 38-77-140,
issued by an insurer authorized to do business in
this State, (b) a bond has been given or cash or
securities delivered in lieu of the insurance, (c)
the owner has qualified as a self-insurer in
accordance with the provisions of Section 56-9-60,
or (d) the owner has at least basic personal
protection insurance as defined in Section
38-78-30(C); and
(3) `Uninsured motor vehicle' is a motor vehicle
required to be registered as to which (a) there is
no bodily injury liability insurance and property
damage liability insurance, (b) no bond has been
given or cash or securities delivered in lieu
thereof, (c) the owner has not qualified as a
self-insurer, and (d) there is no basic or added
personal protection insurance as defined in Section
38-78-30.
(4) `Department' is the South Carolina
Department of Highways and Public Transportation.
Section 56-10-520. In addition to any other fees
prescribed by law, every person registering and
licensing an uninsured motor vehicle, as defined in
Section 56-10-510, in this State shall pay, at the
time of registering and licensing an uninsured
motor vehicle, the sum of two hundred and fifty
dollars. Credit for payment made on a motor
vehicle subsequently transferred during the same
licensing year must be applied to any motor vehicle
thereafter registered by the uninsured motorist
during the same licensing year. Every person
knowingly operating an uninsured motor vehicle
<#PAGE>pursuant to this section shall not be deemed in
violation of Section 56-10-270.
Section 56-10-530. The department of Highways
and Public Transportation may require that a person
applying for licensing and registration of a motor
vehicle shall certify under the penalties set forth
in Section 56-10-260 whether or not each motor
vehicle is an insured motor vehicle as defined in
Section 56-10-510 or the department may in its
discretion require that a person (a) produce as
evidence of financial responsibility a certificate
on a form prescribed by the department of insurance
or self-insurance complying with the requirements
of Section 56-9-60, (b) has given bond or delivered
the cash or securities as provided in Sections
56-9-570 and 56-9-580, respectively, or (c) pay the
fee prescribed in Section 56-10-520.
Section 56-10-560. All funds collected by the
department under the provisions of this article
must be deposited to the credit of the State
Treasurer and monthly transferred to a special
deposit fund to be known as the `Uninsured
Motorists Fund' to be disbursed as provided in
Section 56-10-570 to 56-10-590.
Section 56-10-570. The fund is under the
supervision and control of the Chief Insurance
Commissioner and must be paid out, on warrants of
the Comptroller General issued on vouchers signed
by the commissioner or persons he designates, for
the purpose of defraying the costs of
administration of this article by the department
and for reducing the operating losses of the
Reinsurance Facility as provided in Section
56-10-580. As determined by the commissioner, when
the recoupment fee is no longer necessary to pay
for losses incurred by the facility as a result of
the phasing out of the facility as provided for by
Section 38-77-1310, the fund must be paid out for
financing of driver safety measurers and for
enforcing the uninsured motorist laws of the state
as determined by the General Assembly.
Section 56-10-580. The Chief Insurance
Commissioner annually, prior to September 30 of
<#PAGE>each year, shall make distribution from the fund as
follows:
(1) to the department, the amount certified by
it as its administrative costs and expenses for
this article. These payments may be made on a
quarterly basis.
(2) to the Reinsurance Facility to reduce the
operating losses of the Facility for the twelve
month period in which they are collected and to
reduce the recoupment charges prescribed in Section
38-77-1310 assessed to drivers with the safe driver
discount.
(3) to finance driver safety measures and
enforce the uninsured motorist laws of the state as
determined by the General Assembly, when the
recoupment fee is no longer necessary to pay for
losses incurred by the Facility, determined by the
commissioner, as a result of the phasing out of the
Facility as provided for by Section 38-77-1310.
Section 56-10-590. The Chief Insurance
Commissioner may promulgate regulations necessary
to implement the provisions of this article.
Section 56-10-610. This article does not repeal
any other provision contained in this title, but is
cumulative to such other provisions."
SECTION 15. Section 38-77-110(A) of the 1976
Code, as last amended by Act 148 of 1989, is
further amended to read:
"(A) Automobile insurers other than insurers
designated and approved as specialized insurers by
the commissioner may not refuse to write or renew
automobile insurance policies for individual
private passenger automobiles if the risk qualifies
for the safe driver discount in Section
38-73-760(e) or small commercial risks. These
policies may not be canceled except for reasons
which had they existed or been known when the
policy was written would have rendered the risk not
an insurable risk. Every automobile insurance risk
constitutes an insurable risk unless the operator's
permit of the named insured has been revoked or
suspended and is at the time of application for
insurance so revoked or suspended. However, no
insurer is required to write or renew automobile
<#PAGE>insurance on any risk if there exists a valid and
enforceable outstanding judgment secured by an
insurer, an agent, or licensed premium service
company on account of automobile insurance premiums
which the applicant or insured or any principal
operator who is a member of the named insured's
household has failed or refused to pay unless the
applicant or insured pays in advance the entire
premium for the full term of the policy sought to
be issued or renewed or the annual premium,
whichever is the lesser. No insurer is required to
write or renew private passenger automobile
insurance if the risk does not qualify for the safe
driver discount in Section 38-73-760(e). An
insurer is not precluded from effecting
cancellation of an automobile insurance policy,
either upon its own initiative or at the instance
of an agent or licensed premium service company,
because of the failure of any named insured or
principal operator to pay when due any automobile
insurance premium or any installment payment.
However, notice of cancellation for nonpayment of
premium notifies the person to whom the notice is
addressed that the notice is void and ineffective
if payment of the full amount of the premium or
premium indebtedness, whichever is the greater, is
made to the insurer, agent, or licensed premium
service company named in the notice by the
otherwise effective date of cancellation. This
notice of cancellation is not considered
ineffective for being conditional, ambiguous, or
indefinite."
SECTION 16. Section 38-77-110(C) of the 1976
Code, as added by Act 148 of 1989, is amended to
read:
"(C) <STRK>With regard to any coverage not required
to be written by an insurer under the mandate to
write, no</STRK> No insurer may refuse to write or renew
such policy, coverage, or endorsement of automobile
insurance because of the race, color, creed,
national origin, <STRK>or</STRK> ancestry, or income of anyone
who seeks to become insured."
<#PAGE> SECTION 17. Section 38-77-110 of the 1976
Code, as last amended by Act 148 of 1989, is
further amended by adding:
"(D) An applicant denied coverage must be
provided in writing by the denying insurer the
reason or reasons for which the applicant has been
refused insurance by that insurer, at the time of
the denial."
SECTION 18. Chapter 77 of Title 38 of the 1976
Code is amended by adding:
Section 38-77-1310. (A) The Reinsurance
Facility is abolished effective October 1, 1992.
There is created the South Carolina Joint
Underwriting Association. The administration of
the phase out of the Facility is transferred to the
Joint Underwriting Association.
(B) As of July 1, 1994, the Facility recoupment
charge must not be included in the rate or premium
charged by the insurers of private passenger
automobile insurance to drivers who qualify for the
safe driver discount. If any losses are incurred
as a result of the operation of the Facility, the
losses attributable to the Facility must be
distributed among insured drivers as provided in
subsection (C) until the commissioner determines
all of the losses have been accounted for, unless
provided otherwise.
(C) Consistent with subsection (B), the rate or
premium charged by insurers of private passenger
automobile insurance must include a recoupment
charge, which must be added to the appropriate rate
to compensate for any remaining losses incurred by
the Facility as a result of its operation. The
operating losses of the Facility for a twelve-month
period must be recouped in the subsequent
twelve-month period.
(1) Prior to December first of each year, the
governing board shall calculate the recoupment
amount, by coverage, by dividing the net Facility
operating loss, adjusted to reflect prudently
incurred expenses, consistent with the provisions
of Section 38-73-465, and the time value of money,
<#PAGE>by mandated coverage for the preceding Facility
accounting year, by the total number of earned car
years in South Carolina, by coverage, for the same
period of time. .368 multiplied by the recoupment
is to be borne by risks having zero surcharge
points under the Uniform Merit Plan promulgated by
the commissioner. The remainder of the recoupment
(.614 multiplied by the recoupment) represents R in
the formula P1X +2P2X +3P3X + 4P4X + 5P5X + 6P6X +
7P7X + 8P8X + 9P9X + 10P10X = R. In this formula
to be utilized in determining the Facility
recoupment charge:
(a) P1 is the percentage of risks which
have one surcharge point under the Uniform Merit
Rating Plan;
(b) P2 is the percentage of risks which
have two surcharge points under the Uniform Merit
Rating Plan;
(c) P3 is the percentage of risks which are
subject to a surcharge of three points under the
Uniform Merit Rating Plan;
(d) P4 is the percentage of risks which are
subject to a surcharge of four points under the
Uniform Merit Rating Plan;
(e) P5 is the percentage of risks subject
to a surcharge of five points under the Uniform
Merit Rating Plan;
(f) P6 is the percentage of risks subject
to a surcharge of six points under the Uniform
Merit Rating Plan;
(g) P7 is the percentage of risks subject
to a surcharge of seven points under the Uniform
Merit Rating Plan;
(h) P8 is the percentage of risks subject
to a surcharge of eight points under the Uniform
Merit Rating Plan;
(i) P9 is the percentage of risks subject
to a surcharge of nine points under the Uniform
Merit Rating Plan;
(j) P10 or more is the percentage of risks
subject to a surcharge of ten or more points under
the Uniform Merit Rating Plan;
(k) X is the dollar amount by coverage, to
be charged all risks having one surcharge point
<#PAGE>under the Uniform Merit Rating Plan promulgated by
the commissioner. This dollar amount, by coverage,
is the Facility recoupment charge to be added to
the rate for all risks which have one surcharge
point.
(2) The Facility recoupment charge by
coverage to be added to the rate for all risks
which have one surcharge point under the Uniform
Merit Rating Plan is calculated by multiplying X by
a factor of one.
(3) The Facility recoupment charge by
coverage to be added to the rate for all risks
which have two surcharge points under the Uniform
Merit Rating Plan is calculated by multiplying X by
a factor of two.
(4) The Facility recoupment charge by
coverage to be added to the rate for all risks
which are subject to a surcharge of three points
under the Uniform Merit Rating Plan is calculated
by multiplying X by a factor of three.
(5) The Facility recoupment charge by
coverage to be added to the rate for all risks
which are subject to a surcharge of four points
under the Uniform Merit Rating Plan is calculated
by multiplying X by a factor of four.
(6) The Facility recoupment charge by
coverage to be added to the rate for all risks
which are subject to a surcharge of five points
under the Uniform Merit Rating Plan is calculated
by multiplying X by a factor of five.
(7) The Facility recoupment charge by
coverage to be added to the rate for all risks
which are subject to a surcharge of six points
under the Uniform Merit Rating Plan is calculated
by multiplying X by a factor of six.
(8) The Facility recoupment charge by
coverage to be added to the rate for all risks
which are subject to a surcharge of seven points
under the Uniform Merit Rating Plan is calculated
by multiplying X by a factor of seven.
(9) The Facility recoupment charge by
coverage to be added to the rate for all risks
which are subject to a surcharge of eight points
<#PAGE>under the Uniform Merit Rating Plan is calculated
by multiplying X by a factor of eight.
(10) The Facility recoupment charge by
coverage to be added to the rate for all risks
which are subject to a surcharge of nine points
under the Uniform Merit Rating Plan is calculated
by multiplying X by a factor of nine.
(11) The Facility recoupment charge by
coverage to be added to the rate for all risks
which are subject to a surcharge of ten or more
points under the Uniform Merit Rating Plan is
calculated by multiplying X by a factor of ten.
(12) In determining the number of surcharge
points a risk has for the purposes of this section,
no surcharge points assigned under the Uniform
Merit Rating Plan because the principal operator of
the automobile has not been licensed in any state
for at least one year immediately preceding the
writing of the risk or as a result of a failure of
any motor vehicle equipment requirement may be
considered.
(13) This section applies to all private
passenger automobile insurance policies.
Section 38-77-1330. As used in this article:
(1) `Association' means the South Carolina Joint
Underwriting Association established pursuant to
this article.
(2) `Net direct premiums' means gross direct
premiums written on automobile liability insurance
as computed by the Chief Insurance Commissioner
less return premiums or the unused or unabsorbed
portions of premium deposits.
Section 38-77-1340. (A) A joint underwriting
association is created consisting of all automobile
insurers licensed to write within this State
automobile insurance policies. Every such insurer
is and must remain a member of the association as
a condition of its authority to continue to
transact this kind of insurance in this State.
(B) The purpose of the association is to provide
automobile insurance on a self-supporting basis to
the fullest extent possible.
Section 38-77-1350. The association has the
power on behalf of its members to make agreements
<#PAGE>among themselves with respect to the equitable
apportionment among them of insurance which may be
afforded applicants who are in good faith entitled
to or have lost their safe driver discount, but are
unable to procure such insurance through ordinary
methods, and such insurers may agree among
themselves on the use of reasonable rate
modifications for such insurance. Such agreements
and rate modifications shall be subject to the
approval of the department.
Section 38-77-1360. (A) The department shall,
after consultation with the insurers licensed to
write automobile liability insurance in this State,
adopt a reasonable plan or plans for the equitable
apportionment among such insurers of applicants for
such insurance who are in good faith entitled to or
have lost their safe driver discount, but are
unable to, procure such insurance through ordinary
methods, and, when such plan has been adopted, all
such insurers shall subscribe thereto and shall
participate therein. Such plan or plans shall
include rules for classification of risks and rates
therefor by driver classification and territory.
Any insured placed with the plan shall be notified
of the fact that insurance coverage is being
afforded through the plan and not through the
private market, and such notification shall be
given in writing within ten days of such placement.
To assure that plan rates are made adequate to pay
claims and expenses, insurers shall develop a means
of obtaining loss and expense experience at least
annually, and the plan shall file such experience,
when available, with the department in sufficient
detail to make a determination of rate adequacy.
(B) The plan of operation shall provide for
economic, fair, and nondiscriminatory
administration and for the prompt and efficient
provision of insurance and may contain other
provisions, including, but not limited to,
preliminary assessment of all members for initial
expenses necessary to commence operations,
establishment of necessary facilities, management
of the association, assessment of the members to
defray losses and expenses, commission
<#PAGE>arrangements, reasonable and objective underwriting
standards, appointment of servicing carriers, and
procedures for determining amounts of insurance to
be provided by the association.
(C) Trend factors shall not be found to be
inappropriate if not in excess of trend factors
normally used in the development of residual market
rates by the appropriate licensed rating
organization. Each application for coverage in the
plan shall include, in boldfaced 12-point type
immediately preceding the applicant's signature,
the following statement:
`THIS INSURANCE IS BEING AFFORDED THROUGH THE
SOUTH CAROLINA JOINT UNDERWRITING ASSOCIATION AND
NOT THROUGH THE PRIVATE MARKET. PLEASE BE ADVISED
THAT COVERAGE WITH A PRIVATE INSURER MAY BE
AVAILABLE FROM ANOTHER AGENT AT A LOWER COST.
AGENT AND COMPANY LISTINGS ARE AVAILABLE IN THE
LOCAL YELLOW PAGES.'
(D) The plan of operation shall provide that any
profit achieved by the association must be added to
the reserves of the association or returned to the
policyholders as a dividend but under no
circumstances whatsoever shall any profit be paid
over to or received by an insurer either in
currency or any other benefit of any kind.
(E) Amendments to the plan of operation may be
made by the directors of the association with the
approval of the commissioner or must be made at the
direction of the commissioner after proper notice
and public hearing.
(F) The association may not write private
passenger automobile insurance with higher limits
of coverage than:
(1) two hundred fifty thousand dollars, for
bodily injury liability to one person in one
accident,
(2) subject to the limit for one person, five
hundred thousand dollars because of bodily injury
to two or more persons in one accident,
(3) one hundred thousand dollars because of
injury to or destruction of property of others in
any one accident,
<#PAGE> (4) five hundred thousand dollars, combined
single limits for either or both bodily injury and
property damage,
(5) two hundred fifty thousand dollars of
added personal protection benefits or personal
protection liability limits up to the limits of the
personal protection benefits.
(G) If a driver covered by the association has
not been able to purchase insurance on the
voluntary market after five consecutive years of
maintaining a safe driver discount, the driver must
be placed by the association with an automobile
insurance company doing business in the voluntary
market in this State. The company must be chosen
based on its percentage of automobile insurance
business written in this State on the voluntary
market. The company must charge the driver the
company's preferred or standard rate according to
driver classification and territory. A driver
assigned under this provision may not be refused
insurance until the driver fails to qualify for the
safe driver discount. This provision does not
preclude the driver from seeking automobile
insurance coverage on the voluntary market at any
other time.
Section 38-77-1370. The rates, rating plans,
rating rules, rating classifications, territories,
and policy forms applicable to insurance written by
the association and the statistical and experience
data relating thereto are subject to this article
and to those provisions of Chapter 73 of Title 38
which are not inconsistent with this article.
Section 38-77-1380. The commissioner shall
obtain complete statistical data in respect to
automobile insurance losses and reparation costs as
well as all other costs or expenses which underlie
or are related to automobile insurance. The
commissioner shall promulgate any statistical plan
he considers necessary for the purpose of gathering
data referable to loss and loss adjustment expense
experience and other expense experience. When the
statistical plan is promulgated, the association
shall adopt and use it.
<#PAGE> Section 38-77-1390. In structuring rates and
determining the profit or loss of the association
in respect to such insurance, consideration must be
given by the commissioner to all investment income
so that investment income is a part of the
ratemaking and ratesetting process.
Section 38-77-1395. No later than sixty days
after the passage of this act, the board must file
with the commissioner rates for personal protection
policies as defined by Section 38-78-30 and rates
for private passenger automobile insurance
liability coverages, uninsured motorist coverages,
and underinsured motorist coverages. All of these
rates are subject to surcharges or discounts, if
any, applicable under any approved Merit Rating
Plan, credit, or discount plan promulgated or
approved by the commissioner. The board must file:
(1) a standard rate by driver classification and
territory twenty percent less than the substandard
rate defined in (2). This rate applies to all
private passenger automobile insurance risks which
qualify for the safe driver discount and are
insured directly by or ceded to the association;
and
(2) a `substandard' rate by driver
classification and territory which applies to all
private passenger automobile insurance risks which
do not qualify for the safe driver discount and are
insured directly by or ceded to the association.
These two rates must be construed so that when
the experience generated by them is combined, the
association is able to provide private passenger
automobile insurance on a self-supporting basis.
Upon the approval of these rates, they must be
utilized for all private passenger automobile
insurance risks either ceded to or insured directly
by the association. No insurer or group of
insurers under the same management may cede more
than thirty-five percent of total direct cedeable
written premiums on South Carolina automobile
insurance as reported in the most recently filed
annual statement of the insurer or group. The
association must submit policy forms, rating plans,
and rating rules applicable to insurance to be
<#PAGE>written by the association to the commissioner for
his approval.
Section 38-77-1400. The premium rate charged
for coverage must be at rates established on an
actuarially sound basis, including consideration of
trends in the frequency and severity of losses and
must be calculated to be self-supporting.
Section 38-77-1410. The association may provide
a rate increase or assessment subject to the
commissioner's approval.
Section 38-77-1420. Any deficit sustained by
the association in any year must be recouped,
pursuant to the plan of operation and the rating
plan then in effect by a rate increase applicable
prospectively. The commissioner has the authority
to authorize and must approve any recoupment under
this section.
Section 38-77-1430. After the initial year of
operation, rates, rating plans, and rating rules
and any provision for recoupment through
policyholder assessment or premium rate increase
must be based upon the association's loss and
expense experience and investment income, together
with any other information based upon this
experience and income as the commissioner considers
appropriate. The resultant premium rates must be
on an actuarially sound basis and must be
calculated to be self-supporting.
If sufficient funds are not available for the
sound financial operation of the association,
pending recoupment as provided in Section
38-77-1420, all members, on a temporary basis,
shall contribute to the financial requirements of
the association in the manner provided for in
Section 38-77-1440. Any such contribution must be
reimbursed to the members following recoupment as
provided in Section 38-77-1420.
Section 38-77-1440. All insurers which are
members of the association shall participate in its
writings, expenses, and losses in the proportion
that the net direct premiums of each member,
excluding that portion of premiums attributable to
the operation of the association, written during
the preceding calendar year bear to the aggregate
<#PAGE>net direct premiums written in this State by all
members of the association. Each insurer's
participation in the association must be determined
annually on the basis of the net direct premiums
written during the preceding calendar year, as
reported in the annual statements and other reports
filed by the insurer with the commissioner. The
assessment of a member insurer may after hearing be
ordered deferred in whole or in part upon
application by the insurer if, in the opinion of
the commissioner, payment of the assessment would
render the insurer insolvent or in danger of
insolvency or would otherwise leave the insurer in
such condition that further transaction of the
insurer's business would be hazardous to its
policyholders, creditors, members, subscribers,
stockholders, or the public. In the event that
payment of an assessment against a member insurer
is deferred by order of the commissioner in whole
or in part, the amount by which the assessment is
deferred must be assessed against other member
insurers in the same manner as provided in this
section. In its order of deferral, or in such
subsequent orders as may be necessary, the
commissioner shall prescribe a plan by which the
assessment so deferred must be repaid to the
association by the impaired insurer with interest
at the six-month treasury bill rate adjusted
semiannually. Any profits, dividends, or other
funds of the association to which the insurer is
otherwise entitled may not be distributed to the
impaired insurer but must be applied toward
repayment of any assessment until the obligation
has been satisfied. The association shall
distribute the repayments, including any interest
thereon, to the other member insurers on the basis
at which assessments were made.
Section 38-77-1450. Every member of the
association is bound by the approved plan of
operation of the association and the rules of the
board of directors of the association.
Section 38-77-1460. (A) If the authority of an
insurer to transact automobile insurance in this
State terminates for any reason, its obligations as
<#PAGE>a member of the association continue until all its
obligations are fulfilled and the commissioner has
so found and certified to the board of directors.
(B) If a member insurer merges into or
consolidates with another insurer authorized to
transact insurance in this State or another insurer
authorized to transact insurance in this State has
reinsured the insurer's entire automobile insurance
business in this State, both the insurer and its
successor or assuming reinsurer, as the case may
be, are liable for the insurer's obligations to the
association.
(C) Any unsatisfied net liability of any
insolvent member of the association must be assumed
by and apportioned among the remaining members in
the same manner in which assessments or gain and
loss are apportioned and the association shall
acquire and have all rights and remedies allowed by
law in behalf of the remaining members against the
estate or funds of the insolvent insurer for funds
due the association.
Section 38-77-1470. The joint underwriting
association is governed by a board of seven
directors, one of whom is appointed by the Governor
to represent the general public and four of whom
are appointed by the Governor and represent
automobile insurers who are members of the
association. Two directors, appointed by the
Governor, are agents authorized to represent
automobile insurers licensed to do business in this
State.
The approved plan of operation of the
association may make provision for combining
insurers under common ownership or management into
groups for voting, assessment, and all other
purposes and may provide that not more than one of
the officers or employees of such a group may serve
as a director at any one time. The board of
directors shall elect a chairman by majority vote
and he, or his designee, must preside at all
meetings of the board.
Section 38-77-1480. Any applicant for insurance
through the association or any insurer adversely
affected, or claiming to be adversely affected, by
<#PAGE>any ruling, action, or decision by or on behalf of
the association, may appeal to the commissioner
within thirty days after the ruling, action, or
decision.
Section 38-77-1490. The association shall file
in the office of the commissioner annually by March
first a statement containing information with
respect to its transactions, condition, operations,
and affairs during the preceding year. The
statement shall contain information prescribed by
the commissioner and must be in the form he
directs.
The commissioner, at any reasonable time, may
require the association to furnish additional
information concerning its transactions, condition,
or any matter connected therewith considered to be
material and of assistance in evaluating the scope,
operations, and experience of the association.
Section 38-77-1500. The commissioner shall make
an examination into the financial condition and
affairs of the association at least annually and
shall file a report thereon with the Commission,
the Governor, and the General Assembly. The
expenses of the examination must be paid by the
association."
SECTION 19. Section 38-73-455 of the 1976 Code,
as last amended by Act 113 of 1991, is further
amended to read:
"Section 38-73-455. (A) An automobile insurer
shall offer <STRK>two</STRK> four different rates for
automobile insurance<STRK>, a base rate as defined in
Section 38-73-457 and an objective standards rate
which is twenty-five percent above the base rate</STRK>.
<STRK>Both</STRK> All of these rates are subject to all
surcharges or discounts, if any, applicable under
any approved merit rating plan, credit, or discount
plan promulgated or approved by the commissioner.
(B) No later than ninety days after the passage
of this act, insurers of automobile insurance must
file with the commissioner rates for personal
protection policies as defined by Section 38-78-30
and revised rates for all other private passenger
automobile insurance policies written by them.
Each insurer must file:
<#PAGE> (1) a `preferred' rate by driver
classification and territory, which is a rate
less than the standard rate defined herein. This
rate applies to private passenger automobile
insurance risks which qualify for the safe driver
discount; and
(2) a `standard' rate which must be the
approved base rate as defined in Section 38-73-457,
by driver classification and territory in effect on
July 1, 1992. This rate applies to private
passenger automobile insurance risks which qualify
for the safe driver discount; and
(3) a `nonpreferred' rate by driver
classification and territory, which is a rate more
than the standard rate but less than the rate by
driver classification and territory for the
substandard rate and is applicable to all private
passenger automobile insurance risks; and
(4) a `substandard' rate by driver
classification and territory, which is a rate more
than the nonpreferred rate but less than or equal
to the substandard rate by driver classification
and territory for the South Carolina Joint
Underwriting Association, as provided for in
Article 13 of Chapter 77 of Title 38, and is
applicable to all private passenger automobile
risks.
(C) The commissioner must approve the rates
filed pursuant to subsection (A). If the rates are
approved, the rates shall become effective for all
policies of automobile insurance issued or renewed
with effective dates on or after January 1, 1993.
(D) Insurers may place any automobile insurance
risk at any of the four rate levels without
restriction unless provided otherwise in this
chapter. An insurer or agent shall provide written
notice to the insurer of the tier at which coverage
is being written for the insured and the reasons
the insured was written in that particular tier.
However, the Uniform Merit Rating Plan must
continue to apply to all risks written by them.
(E) An applicant and all operators of the
insured automobile who have qualified for the safe
driver discount for the last five years and who
<#PAGE>reside in the same household, and the automobile or
the automobile it replaced has been insured for
liability or personal protection coverage for the
past twelve months must be written at the preferred
or standard rate and may not be ceded to the Joint
Underwriting Association. A driver who is claimed
as a dependent for income tax purposes is not
required to meet the five year requirement as long
as the dependent qualifies for the safe driver
discount.
(F) An applicant and all operators of the
insured automobile who have qualified for the safe
driver discount for the last ten years and who
reside in the same household and the automobile or
the automobile it replaced has been insured for
liability or personal protection coverage for the
past twelve months must be written at the preferred
rate and may not be ceded to the Joint Underwriting
Association. A driver who is claimed as a
dependent for income tax purposes is not required
to meet the ten year requirement as long as the
dependent qualifies for the safe driver discount.
(G) All policies of automobile insurance issued
or renewed with effective dates on or after October
1, 1992, that are written by automobile insurers
designated pursuant to Section 38-77-590(A), for
risks written by them through producers designated
pursuant to that same section, and all policies
ceded to the Joint Underwriting Association by
automobile insurers must be written at the rates
provided for in Section 38-77-1395. However, the
Uniform Merit Rating Plan must apply to all such
risks.
(H) The Board of Directors of the association
must file rates by driver classification and
territory for both the personal protection policies
as defined by Section 38-78-30, liability
coverages, and uninsured motorist coverage.
<STRK>Applicants, or a current policyholder, seeking
automobile insurance with an insurer must be
written at the base rate, unless one of the
conditions or factors in subitems (1) through (8)
of item (A) is present.</STRK>
<#PAGE> <STRK>(A) The named insured or any operator who is
not excluded in accordance with Section 37-77-340
and who resides in the same household or
customarily operates an automobile insured under
the same policy, individually:
(1) has obtained a policy of automobile
insurance or continuation thereof through material
misrepresentation within the preceding thirty-six
months; or
(2) has had convictions for driving
violations on three or more separate occasions
within the thirty-six months immediately preceding
the effective date of coverage as reflected by the
motor vehicle record of each insured driver as
maintained by the Department of Highways and Public
Transportation; or
(3) has had two or more `chargeable'
accidents within the thirty-six months immediately
preceding the effective date of coverage. A
`chargeable' accident is defined as one resulting
in bodily injury to any person in excess of three
hundred dollars per person, death, or damage to the
property of the insured or other person in excess
of seven hundred fifty dollars. Accidents
occurring under the circumstances enumerated below
are not considered chargeable.
(a) The automobile was lawfully parked. An
automobile rolling from a parked position is not
considered as lawfully parked but is considered as
operated by the last operator.
(b) The applicant or other operator or
owner was reimbursed by or on behalf of a person
responsible for the accident or has a judgment
against this person.
(c) The automobile of an applicant or other
operator was struck in the rear by another vehicle
and the applicant or other operator has not been
convicted of a moving traffic violation in
connection with the accident.
(d) The operator of the other automobile
involved in the accident was convicted of a moving
traffic violation and the applicant or other
operator was not convicted of a moving traffic
violation in connection therewith.
<#PAGE> (e) An automobile operated by the applicant
or other operator is damaged as a result of contact
with a `hit and run' driver, if the applicant or
other operator so reports the accident to the
proper authority within twenty-four hours or, if
the person is injured, as soon as the person is
physically able to do so.
(f) Accidents involving damage by contact
with animals or fowl.
(g) Accidents involving physical damage,
limited to an caused by flying gravel, missiles, or
falling objects.
(h) Accidents occurring as a result of the
operation of any automobile in response to an
emergency if the operator at the time of the
accident was responding to a call of duty as a paid
or volunteer member of any police or fire
department, first aid squad, or any law enforcement
agency. This exception does not include an
accident occurring after the emergency situation
ceases or after the private passenger motor vehicle
ceases to be used in response to the emergency; or
(4) has had one `chargeable' accident and two
convictions for driving violations, all occurring
on separate occasions, within the thirty-six months
immediately preceding the effective date of
coverage as reflected by the motor vehicle record
of each insured driver as maintained by the
Department of Highways and Public Transportation;
or
(5) has been convicted of or forfeited bail
during the thirty-six months immediately preceding
the effective date of coverage for operating a
motor vehicle while in an intoxicated condition or
while under the influence of drugs; or
(6) has been convicted or forfeited bail
during the thirty-six months immediately preceding
the effective date for:
(a) any felony involving the use of a motor
vehicle,
(b) criminal negligence resulting in death,
homicide, or assault arising out of the operation
of a motor vehicle,
<#PAGE> (c) leaving the scene of an accident
without stopping to report,
(d) theft or unlawful taking of a motor
vehicle,
(e) operating during a period of revocation
or suspension of registration or license,
(f) Knowingly permitting an unlicensed
person to drive,
(g) reckless driving,
(h) the making of material false statements
in the application for licenses or registration,
(i) impersonating an applicant for license
or registration or procuring a license or
registration through impersonation, whether for
himself or another,
(j) filing of a false or fraudulent claim
or knowingly aiding or abetting another in the
presentation of such a claim,
(k) failure to stop a motor vehicle when
signaled by means or a siren or flashing light by
a law enforcement vehicle; or
(7) has for thirty or more consecutive days
during the twelve months immediately preceding the
effective date of coverage, owned or operated the
automobile to be insured (or if newly acquired, the
automobile it replaces) without liability coverage
in violation of the laws of this State; or
(8) has used the insured automobile as
follows or if the insured automobile is:
(a) used in carrying passengers for hire or
compensation, except that the use of an automobile
for a car pool must not be considered use of an
automobile for hire or compensation,
(b) used in the business of transportation
of flammables or explosives,
(c) used in illegal operation, or
(d) no longer principally used and garaged
within the State, but not to include students who
are operating a motor vehicle registered in this
State while attending an institution located in
another state.
(B) In the event that one or more of the
conditions or factors prescribed in items (1)
through (8) of subsection (A) exist, the motor
<#PAGE>vehicle customarily operated by that individual
must be written at the objective standards rate.
(C)</STRK> (I) Member companies of an affiliated group
of automobile insurers may <STRK>not</STRK> utilize different
filed rates for automobile insurance coverages
<STRK>which they are mandated by law to write</STRK>. For the
purpose of this section, an affiliated group of
automobile insurers includes a group of automobile
insurers under common ownership, management, or
control. <STRK>Those automobile insurers designated
pursuant to Section 38-77-590(a), for automobile
insurance risks written by them through producers
designated by the Facility governing board pursuant
to that section, shall utilize the rates or premium
charges by coverage filed and authorized for use by
the rating organization licensed by the
Commissioner pursuant to Article 11, Chapter 73 of
this title, which has the largest number of members
or subscribers for automobile insurance rates.
However, those automobile insurers designated
pursuant to Section 38-77-590(a) are not required
to use those same rates or premium charges
described in the preceding sentence for risks
written by them through their authorized agents not
appointed pursuant to Section 38-77-590.</STRK>
<STRK>(D)</STRK> (J) <STRK>An automobile insurance policy may be
endorsed at any time during the policy period to
reflect the correct rate or premium applicable by
reason of the factors or conditions described in
subsection (A) which existed prior to the
commencement of the policy period in which the
endorsement is made, regardless of whether the
factors or conditions were known or disclosed to
the insurer at the commencement of the policy
period. However, no</STRK> No policy may be endorsed
during a policy period to reflect factors or
conditions occurring during that policy period. A
policy may be endorsed during a policy period to
recognize the addition or deletion of an operator
or vehicle.
<STRK>(E) For purposes of determining the applicable
rates to be charged an insured, an automobile
insurer shall obtain and review an applicant's
motor vehicle record.</STRK>"
<#PAGE> SECTION 20. Section 38-73-760 of the 1976 Code,
as last amended by Act 148 of 1989, is further
amended by adding:
"(g) No surcharge may be assessed for the
first conviction of speeding less than twenty miles
per hour if the person convicted has maintained the
safe driver discount for the previous three years.
(h) No surcharge may be assessed for convictions
of the following violations occurring on or after
January 1, 1993: failing to dim lights; operating
with improper lights; operating with improper
brakes; or operating a vehicle in unsafe
condition."
SECTION 21. Section 56-10-270 of the 1976 Code
is amended to read:
"Section 56-10-270. (a) Any person knowingly
operating an uninsured motor vehicle subject to
registration in this State or any person knowingly
allowing the operation of an uninsured motor
vehicle subject to registration in this State is
guilty of a misdemeanor and, upon conviction, must
be punished as follows:
(1) for a first offense, fined not less than
<STRK>one</STRK> two hundred dollars nor more than <STRK>two</STRK> three
hundred dollars or imprisoned for thirty days or
may be ordered to perform up to fifty public
service hours, or a combination of these, and,
(2) upon conviction of a second offense, be
fined <STRK>two</STRK> three hundred dollars or imprisoned for
thirty days or perform up to one hundred public
service hours, or a combination of these, <STRK>or both,</STRK>
and
(3) for a third and subsequent offenses must
be imprisoned for not less than forty-five days nor
more than six months and be fined up to four
hundred dollars or serve up to two hundred public
service hours, or a combination of these. Only
convictions which occurred within five years
including and immediately preceding the date of the
last conviction constitute prior convictions within
the meaning of this section. An uninsured motor
vehicle includes an insured vehicle with respect to
which the operator has been excluded from coverage
pursuant to the provisions of Section 38-77-340.
<#PAGE> (b) The department upon receipt of information
to the effect that any person has been convicted of
violating subsection (a) of this section shall
suspend the driving privilege and all license
plates and registration certificates issued in the
person's name for a period of thirty days for a
first offense, for a period of ninety days for a
second offense, and for a period of six months for
a third and each subsequent offense. <STRK>and may not
reinstate that</STRK> The person's privileges may not be
reinstated until proof of financial responsibility
has been filed.
(c) Any person whose license plates and
registration certificates which are suspended as
provided in this section, which are not suspended
for any other reason, may have them immediately
restored, if he files proof of financial
responsibility with the department."
SECTION 22. The 1976 Code is amended by
adding:
"Section 38-77-116. Upon issuance of a new
private passenger automobile insurance policy, the
insurance company or agent must review with the new
applicant a list of driving offenses and the
related fine and punishment, as well as the
possible increase in the rates, the effect of any
surcharges, or the effect of the loss of the safe
driver discount. This list must be on a form
approved by the Chief Insurance Commissioner and
must accompany the policy."
SECTION 23. After September 30, 1992, the
governing board of the Joint Underwriting
Association, enacted pursuant to Article 13 of
Chapter 77 of Title 38 of the 1976 Code as
contained in this act, shall contract with one or
more insurers or business entities to serve as the
designated carrier and shall establish a procedure
for the selection of the designated carrier. In
developing this procedure, the board must establish
criteria which will assure the designated carrier's
ability to adequately provide policy-writing and
claims service. However, the board may not require
that the designated carrier be a licensed insurance
company. Designated carrier contracts must be for
<#PAGE>a period of three years and must be awarded upon
the terms and conditions for competitive sealed
bidding as provided in Section 11-35-1520 of the
1976 Code.
If the designated carrier fails two claims
audits, including a re-audit, within the contract
term, the designated carrier is disqualified for
renewal of its contract with the Facility upon
expiration of its existing contract. Designated
carrier contracts awarded pursuant to this section
must provide that the failure of two claims audits,
including a re-audit, during the contract term
constitutes a material breach of the contract.
After July 1, 1992, the governing board of the
association may not designate any new producers.
Commissions paid to agents for policies ceded to
or placed in the Joint Underwriting Association
shall be set by the association's board of
directors.
SECTION 24. The 1976 Code is amended by
adding:
"Section 38-77-175. (A) When the operator or
owner of a motor vehicle is issued a traffic ticket
for a moving violation by a law enforcement
officer, he must be furnished a written request
form to complete to verify liability insurance
coverage. The form must be in a manner prescribed
by regulation of the Department of Highways and
Public Transportation.
(B) The completed and verified form must be
returned by the operator or owner to the department
within fifteen days from the date he receives it.
Failure to return the form verified in the proper
manner is prima facie evidence that the vehicle was
uninsured.
(C) Any fine collected for a violation of
Section 56-10-270, relating to driving uninsured,
as a result of this section must be deposited in
the treasury of the municipality or the county
employing the law enforcement officer who issued
the original ticket, if such law enforcement
officer is a municipal or county employee, or in
the general fund of the State, if the law
<#PAGE>enforcement officer who issued the original ticket
is an employee of a state agency or department."
SECTION 25. The 1976 Code is amended by
adding:
"Section 56-7-12. (A) When the operator or
owner of a motor vehicle is issued a traffic ticket
for a moving violation by a law enforcement
officer, he must be furnished a written request
form to complete to verify liability insurance
coverage. The form must be in a manner prescribed
by regulation of the Department of Highways and
Public Transportation.
(B) The completed and verified form must be
returned by the operator or owner to the department
within fifteen days from the date he receives it.
Failure to return the form verified in the proper
manner is prima facie evidence that the vehicle was
uninsured.
(C) Any fine collected for a violation of
Section 56-10-270, relating to driving uninsured,
as a result of this section must be deposited in
the treasury of the municipality or the county
employing the law enforcement officer who issued
the original ticket, if such law enforcement
officer is a municipal or county employee, or in
the general fund of the State, if the law
enforcement officer who issued the original ticket
is an employee of a state agency or department."
SECTION 26. Article 5 of Chapter 77 of Title
38 of the 1976 Code and Sections 38-73-1420,
38-73-1425, 38-77-285, 38-77-920, 38-77-940,
38-77-950, and 38-77-960 are repealed on October 1,
1992.
SECTION 27. Section 38-77-930 is repealed.
SECTION 28. Section 38-77-111 of the 1976
Code, as added by Act 148 of 1989, is amended to
read:
"Section 38-77-111. An automobile insurer may
cede the coverages of an automobile insurance
policy that it is mandated to write to the
<STRK>Reinsurance Facility</STRK> Joint Underwriting Association
but it may not cede coverages under a policy that
it is not mandated by law to write except for tort
liability and personal protection coverages and
<#PAGE>uninsured motorist coverage for those risks that do
not qualify for the safe driver discount. However,
if an insurer cedes a coverage it is mandated to
write by law, it shall cede all coverages under
that policy that it is mandated to write."
SECTION 29. If any provision of the act or the
application thereof to any person or circumstance
is held to be unconstitutional or otherwise
invalid, the remainder of this act and the
application of such provision to other persons or
circumstances are not affected thereby, and it is
to be conclusively presumed that the legislature
would have enacted the remainder of this act
without such invalid or unconstitutional provision,
except that if Section 38-78-110 or Section
38-78-120 is found to be unconstitutional or
invalid it is to be conclusively presumed that the
legislature would not have enacted the remainder of
this act without such limitations, and the entire
act is invalid. If Section 38-78-110 is found to
be unconstitutional or invalid, personal protection
insurers have no obligation to pay personal
protection benefits with respect to accidents
occurring on or after the date of the finding of
such unconstitutionality or invalidity and, in
addition, are subrogated to all of the rights of
personal protection insureds for all previous such
benefits paid.
SECTION 30. Except as otherwise specifically
provided herein, this act takes effect upon
approval by the Governor./
Amend title to conform.
THOMAS C. ALEXANDER, for Committee.
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976,
BY ADDING CHAPTER 78 TO TITLE 38 SO AS TO ENACT THE
"CONSUMER FREEDOM OF CHOICE IN MOTOR VEHICLE
INSURANCE ACT"; TO AMEND SECTION 38-77-30, AS
AMENDED, RELATING TO DEFINITIONS UNDER THE
AUTOMOBILE INSURANCE CHAPTER OF TITLE 38, SO AS TO
PROVIDE THAT "AUTOMOBILE INSURANCE POLICY" ALSO
INCLUDES THE PERSONAL PROTECTION POLICY AS DEFINED
IN SECTION 38-78-30; TO AMEND SECTION 38-77-110, AS
AMENDED, RELATING TO AUTOMOBILE INSURANCE, THE
REQUIREMENT UPON INSURERS TO INSURE, AND
EXCEPTIONS, SO AS TO PROVIDE THAT NO INSURER IS
REQUIRED TO WRITE PRIVATE PASSENGER AUTOMOBILE
INSURANCE WITH HIGHER LIMITS OF COVERAGE THAN TWO
HUNDRED FIFTY THOUSAND DOLLARS FOR ADDED PERSONAL
PROTECTION COVERAGE AS DEFINED IN SECTION 38-78-30;
TO AMEND THE 1976 CODE BY ADDING SECTION 38-77-355
SO AS TO PROVIDE THAT, IN A CLAIM OR ACTION FOR
PERSONAL INJURY OR WRONGFUL DEATH ARISING OUT OF
THE OWNERSHIP, OPERATION, USE, OR MAINTENANCE OF A
MOTOR VEHICLE, THE COURT SHALL ADMIT INTO EVIDENCE
THE TOTAL AMOUNT PAID TO THE CLAIMANT FROM
COLLATERAL SOURCES AND REQUIRE AN INSTRUCTION TO
THE JURY TO DEDUCT FROM ITS VERDICT THE VALUE OF
ALL BENEFITS RECEIVED BY THE CLAIMANT FROM
COLLATERAL SOURCES; TO AMEND SECTION 38-77-280, AS
AMENDED, RELATING TO COLLISION COVERAGE AND
COMPREHENSIVE COVERAGE UNDER THE PROVISIONS OF LAW
ON AUTOMOBILE INSURANCE, SO AS TO DELETE THE
EXISTING PROVISIONS OF THE SECTION AND PROVIDE THAT
AFTER SEPTEMBER 30, 1992, AUTOMOBILE INSURERS MAY
REFUSE TO WRITE OR RENEW PRIVATE PASSENGER
AUTOMOBILE PHYSICAL DAMAGE INSURANCE COVERAGE FOR
AN APPLICANT OR EXISTING POLICYHOLDER, AND PROVIDE
<#PAGE>THAT AFTER SEPTEMBER 30, 1992, NO PRIVATE PASSENGER
AUTOMOBILE PHYSICAL DAMAGE INSURANCE COVERAGE MAY
BE CEDED TO THE REINSURANCE FACILITY; TO AMEND
SECTION 38-77-30, AS AMENDED, RELATING TO
AUTOMOBILE INSURANCE AND DEFINITIONS, SO AS TO
EXCLUDE PUNITIVE DAMAGES FROM THE DEFINITION OF
"DAMAGES"; TO AMEND SECTION 38-77-140, RELATING TO
AUTOMOBILE INSURANCE AND BODILY INJURY AND PROPERTY
DAMAGE LIMITS, SO AS TO REFER TO "ACTUAL DAMAGES",
AND PROVIDE THAT AN INSURER SHALL OFFER THE INSURED
A RIDER OR ENDORSEMENT FOR AN ADDITIONAL PREMIUM TO
COVER LIABILITY FOR PUNITIVE DAMAGES, WHICH
COVERAGE IS OPTIONAL WITH THE INSURED; TO AMEND
SECTION 38-77-150, RELATING TO THE UNINSURED
MOTORIST PROVISION AND THE DEFENSE OF AN ACTION BY
THE INSURER, SO AS TO REFER TO ACTUAL DAMAGES,
INCREASE THE EXCLUSION AMOUNT REGARDING LOSS OR
DAMAGE, REQUIRE INSURERS TO OFFER HIGHER LIMITS OF
UNINSURED MOTORIST COVERAGE, REQUIRE INSURERS TO
OFFER ON A FORM PRESCRIBED BY THE CHIEF INSURANCE
COMMISSIONER "NONSTACKABLE" POLICIES OF UNINSURED
MOTORIST COVERAGE, PROVIDE THAT PREMIUM RATES MADE
BY INSURERS FOR UNINSURED MOTORIST COVERAGE MUST BE
DETERMINED AND REGULATED AS PREMIUM RATES FOR
AUTOMOBILE INSURANCE GENERALLY ARE DETERMINED AND
REGULATED, AND PROVIDE THAT BENEFITS PAID PURSUANT
TO THIS SECTION ARE SUBJECT TO SUBROGATION AND
ASSIGNMENT; TO AMEND SECTION 38-77-160, AS AMENDED,
RELATING TO UNDERINSURED MOTORIST COVERAGE AND
ADDITIONAL UNINSURED MOTORIST COVERAGE, SO AS TO
DELETE CERTAIN PROVISIONS, REQUIRE THE OFFERING OF
UNDERINSURED MOTORIST COVERAGE UP TO THE LIMITS
SELECTED FOR THE INSURED'S LIABILITY COVERAGE TO
PROVIDE COVERAGE IN THE EVENT THE INSURED BECOMES
LEGALLY ENTITLED TO COLLECT DAMAGES FROM THE OWNER
OR OPERATOR OF AN UNDERINSURED MOTOR VEHICLE,
PROVIDE THAT UNDERINSURED MOTORIST BENEFITS PAID
PURSUANT TO THIS SECTION ARE SUBJECT TO SUBROGATION
AND ASSIGNMENT, AND ENACT CERTAIN PROVISIONS FOR
INSURERS OFFERING UNINSURED MOTORIST COVERAGE; TO
AMEND SECTION 56-9-350, RELATING TO THE REQUIREMENT
THAT THE VERIFICATION OF AUTOMOBILE INSURANCE
COVERAGE FORM BE ISSUED FOLLOWING CERTAIN
ACCIDENTS, SO AS TO DELETE CERTAIN PROVISIONS, AND
<#PAGE>PROVIDE THAT THE OPERATOR OR OWNER OF A MOTOR
VEHICLE INVOLVED IN AN ACCIDENT RESULTING IN
PROPERTY DAMAGE OF FOUR HUNDRED DOLLARS OR MORE OR
IN BODILY INJURY OR DEATH WITHIN FIFTEEN DAYS AFTER
THE ACCIDENT SHALL FORWARD A WRITTEN REPORT OF THE
ACCIDENT TO THE DEPARTMENT OF HIGHWAYS AND PUBLIC
TRANSPORTATION ON A FORM PRESCRIBED BY THE
DEPARTMENT; TO AMEND SECTION 56-10-10, RELATING TO
VEHICLE FINANCIAL SECURITY AND THE SECURITY
REQUIRED ON REGISTERED VEHICLES, SO AS TO DELETE
CERTAIN PROVISIONS, AND PROVIDE THAT SECURITY MUST
BE MAINTAINED ON EVERY MOTOR VEHICLE REQUIRED TO BE
REGISTERED IN SOUTH CAROLINA WHERE THE OWNER OR
OTHER OPERATOR NOT EXCLUDED IN ACCORDANCE WITH
SECTION 38-77-340 AND WHO RESIDES IN THE SAME
HOUSEHOLD MEETS ONE OF THE CONDITIONS OR FACTORS
SPECIFIED IN SECTION 38-73-455 FOR APPLICATION OF
THE OBJECTIVE STANDARDS RATE; TO AMEND SECTION
56-10-220, RELATING TO THE REQUIREMENT THAT A
VEHICLE SOUGHT TO BE REGISTERED IN THIS STATE MUST
BE INSURED, SO AS TO DESCRIBE PERSONS APPLYING FOR
REGISTRATION AS PERSONS REQUIRED TO PROVIDE
SECURITY ON A MOTOR VEHICLE AS PROVIDED IN SECTION
56-10-10; TO AMEND SECTION 56-10-240; RELATING TO
THE REQUIREMENT THAT, UPON LOSS OF AUTOMOBILE
INSURANCE, THE INSURED SHALL OBTAIN NEW INSURANCE
OR SURRENDER THE VEHICLE'S REGISTRATION AND PLATES,
SO AS TO DESCRIBE THE MOTOR VEHICLES REFERENCED IN
THE SECTION AS VEHICLES FOR WHICH SECURITY IS
REQUIRED AS PROVIDED IN SECTION 56-10-10; TO AMEND
THE 1976 CODE BY ADDING ARTICLE 5 TO CHAPTER 10 OF
TITLE 56 SO AS TO PROVIDE FOR THE REGISTRATION AND
LICENSING OF UNINSURED MOTOR VEHICLES; TO AMEND
SECTION 38-77-110, AS AMENDED, RELATING TO THE
REQUIREMENT UPON AUTOMOBILE INSURERS TO INSURE AND
EXCEPTIONS, SO AS TO PROVIDE THAT AUTOMOBILE
INSURERS MAY NOT REFUSE TO WRITE OR RENEW
AUTOMOBILE INSURANCE POLICIES FOR INDIVIDUAL
PRIVATE PASSENGER AUTOMOBILES IF THE RISK QUALIFIES
FOR THE SAFE DRIVER DISCOUNT IN SECTION 38-73-760
OR SMALL COMMERCIAL RISKS, PROVIDE THAT NO INSURER
IS REQUIRED TO WRITE OR RENEW PRIVATE PASSENGER
AUTOMOBILE INSURANCE IF THE RISK DOES NOT QUALIFY
FOR THE SAFE DRIVER DISCOUNT IN SECTION 38-73-760,
<#PAGE>DELETE CERTAIN LANGUAGE, PROVIDE THAT NO INSURER
MAY REFUSE TO WRITE OR RENEW SUCH POLICY, COVERAGE,
OR ENDORSEMENT OF AUTOMOBILE INSURANCE BECAUSE OF
THE RACE, COLOR, CREED, OR ECONOMIC STATUS OF
ANYONE WHO SEEKS TO BECOME INSURED, PROVIDE THAT AN
APPLICANT WHO IS DENIED COVERAGE MAY REQUEST THE
DENYING INSURER TO PROVIDE IN WRITING THE REASON OR
REASONS FOR WHICH THE APPLICANT HAS BEEN REFUSED
INSURANCE, AND REQUIRE THE INSURER TO RESPOND IN
WRITING WITHIN TEN DAYS OF THE REQUEST; TO AMEND
THE 1976 CODE BY ADDING ARTICLE 13 TO CHAPTER 77 OF
TITLE 38 SO AS TO PROVIDE FOR THE ABOLITION OF THE
SOUTH CAROLINA REINSURANCE FACILITY AND FOR THE
ESTABLISHMENT OF THE SOUTH CAROLINA JOINT
UNDERWRITING ASSOCIATION; TO AMEND SECTION
38-73-455, AS AMENDED, RELATING TO AUTOMOBILE
INSURANCE RATES, SO AS TO DELETE PROVISIONS OF THE
SECTION, AND PROVIDE, AMONG OTHER THINGS, THAT AN
AUTOMOBILE INSURER SHALL OFFER FOUR, RATHER THAN
TWO, DIFFERENT RATES FOR AUTOMOBILE INSURANCE, THAT
INSURERS MUST FILE WITH THE CHIEF INSURANCE
COMMISSIONER RATES FOR PERSONAL PROTECTION POLICIES
AND REVISED RATES FOR ALL OTHER PRIVATE PASSENGER
AUTOMOBILE INSURANCE POLICIES WRITTEN BY THEM, AND
THAT INSURERS MAY PLACE ANY AUTOMOBILE INSURANCE
RISK AT ANY OF THE FOUR RATE LEVELS WITHOUT
RESTRICTION UNLESS PROVIDED OTHERWISE BY LAW; TO
AMEND SECTION 38-73-760, AS AMENDED, RELATING TO
UNIFORM STATISTICAL PLANS, BY ADDING LANGUAGE WHICH
PROVIDES THAT NO SURCHARGE MAY BE ASSESSED FOR THE
FIRST CONVICTION OF SPEEDING LESS THAN TWENTY MILES
PER HOUR IF THE PERSON CONVICTED HAS NO CHARGEABLE
ACCIDENTS OR DRIVING CONVICTIONS FOR THE PREVIOUS
THREE YEARS; TO AMEND SECTION 38-57-130, RELATING
TO INSURANCE, TRADE PRACTICES, AND THE PROHIBITION
ON MISREPRESENTATIONS, SPECIAL INDUCEMENTS, AND
REBATES IN ALL INSURANCE CONTRACTS, SO AS TO MAKE
AN EXCEPTION FOR A PRIVATE PASSENGER AUTOMOBILE
INSURANCE CONTRACT; TO AMEND SECTION 56-10-270,
RELATING TO THE OPERATION OF AN UNINSURED MOTOR
VEHICLE AND PENALTIES, SO AS TO INCREASE CERTAIN OF
THE PENALTIES, AUTHORIZE PERFORMANCE OF PUBLIC
SERVICE AS A PENALTY, PROVIDE FOR SUSPENSION OF THE
DRIVING PRIVILEGE AND ALL LICENSE PLATES AND
<#PAGE>REGISTRATION CERTIFICATES ISSUED IN A PERSON'S NAME
FOR SECOND, THIRD, AND SUBSEQUENT OFFENSE
VIOLATIONS OF THE PROVISIONS OF THIS SECTION,
DELETE CERTAIN LANGUAGE, AND PROVIDE THAT THE
CONVICTED PERSON'S PRIVILEGES MAY NOT BE REINSTATED
UNTIL PROOF OF FINANCIAL RESPONSIBILITY HAS BEEN
FILED; TO AMEND THE 1976 CODE BY ADDING SECTION
38-77-116 SO AS TO PROVIDE THAT, UPON ISSUANCE OF
A NEW PRIVATE PASSENGER AUTOMOBILE INSURANCE
POLICY, THE INSURANCE COMPANY OR AGENT MUST REVIEW
WITH THE NEW APPLICANT A LIST OF DRIVING OFFENSES
AND THE RELATED FINE AND PUNISHMENT, AS WELL AS
CERTAIN OTHER THINGS; TO PROVIDE THAT AFTER
SEPTEMBER 30, 1992, THE GOVERNING BOARD OF THE
JOINT UNDERWRITING ASSOCIATION SHALL CONTRACT WITH
ONE OR MORE INSURERS OR BUSINESS ENTITIES TO SERVE
AS THE DESIGNATED CARRIER AND SHALL ESTABLISH A
PROCEDURE FOR THE SELECTION OF THE DESIGNATED
CARRIER, PROVIDE THAT IF THE DESIGNATED CARRIER
FAILS TWO CLAIMS AUDITS, INCLUDING A RE-AUDIT,
WITHIN THE CONTRACT TERM, THE DESIGNATED CARRIER IS
DISQUALIFIED FOR RENEWAL OF ITS CONTRACT UPON
EXPIRATION OF ITS EXISTING CONTRACT, AND PROVIDE
THAT NO DESIGNATED PRODUCERS MAY RECEIVE A
COMMISSION HIGHER THAN FIVE PERCENT ON A POLICY
CEDED TO THE JOINT UNDERWRITING ASSOCIATION AND
THAT AGENTS OR PRODUCERS OTHER THAN DESIGNATED
PRODUCERS MAY NOT RECEIVE A COMMISSION HIGHER THAN
FIVE PERCENT ON A POLICY WRITTEN DIRECTLY BY THE
ASSOCIATION; TO AMEND THE 1976 CODE BY ADDING
SECTIONS 38-77-175 AND 56-7-12 SO AS TO PROVIDE
THAT WHEN THE OPERATOR OR OWNER OF A MOTOR VEHICLE
IS ISSUED A TRAFFIC TICKET FOR A MOVING VIOLATION
BY A LAW ENFORCEMENT OFFICER, HE MUST BE FURNISHED
A WRITTEN REQUEST FORM TO COMPLETE TO VERIFY
LIABILITY INSURANCE COVERAGE, PROVIDE FOR THE
RETURN OF THE FORM AND THE EFFECT OF FAILURE TO
RETURN THE FORM TO THE DEPARTMENT OF HIGHWAYS AND
PUBLIC TRANSPORTATION, AND PROVIDE FOR THE DEPOSIT
OF ANY FINE COLLECTED FOR A VIOLATION OF SECTION
56-10-270 AS A RESULT OF THESE TWO NEW SECTIONS; TO
REPEAL ARTICLE 5 OF CHAPTER 77 OF TITLE 38,
RELATING TO THE SOUTH CAROLINA REINSURANCE FACILITY
AND DESIGNATED PRODUCERS; AND TO PROVIDE FOR THE
<#PAGE>SEVERABILITY AND THE CONSTITUTIONALITY OF THIS ACT
AND FOR CERTAIN OBLIGATIONS AND SUBROGATION OF
PERSONAL PROTECTION INSURERS UNDER CERTAIN
CIRCUMSTANCES INVOLVING THE UNCONSTITUTIONALITY OR
INVALIDITY OF SECTION 38-78-110.
Be it enacted by the General Assembly of the State
of South Carolina:
SECTION 1. Title 38 of the 1976 Code is amended
by adding:
Section 38-78-10. This chapter may be cited as
the `Consumer Freedom of Choice in Motor Vehicle
Insurance Act'.
Section 38-78-20. (A) Under existing law, the
ability of a person to recover losses incurred as
a result of a motor vehicle accident is limited by
factors over which the accident victim has no
control. The recovery is dependent on the conduct
of the other driver, the amount of liability
insurance carried by the other driver, and the
financial resources of the other driver. Two
individuals who have received identical injuries
may recover markedly different amounts. Under
existing law, many individuals receive little or no
compensation for their losses.
(B) This chapter gives motorists the right to
choose the kinds of personal protection available
in case of an automobile accident and the amount of
financial protection they deem appropriate and
affordable. Instead of being forced to buy
traditional fault liability insurance to protect
strangers, motorists will have the opportunity to
buy a new personal protection policy to protect
themselves and their family members regardless of
fault in the event of a motor vehicle accident.
<#PAGE>Motorists will also have the right to reject the
provisions of this chapter, and thus retain all
rights to sue and be sued for both economic and
noneconomic loss based on fault, under the existing
fault liability insurance system.
(C) The interaction between traditional fault
liability insurance and the personal protection
policy is as follows:
(1) Motorists who choose the traditional
fault liability insurance and who are involved in
an accident with any other motorist essentially
will retain the system existing now where they have
the opportunity to claim and sue based on fault for
both economic and noneconomic damages. They will
also remain subject to being sued for such
liability to others based on fault.
(2) Motorists who choose the new personal
protection policy system established by this
chapter and who are involved in an accident with a
motorist who has chosen traditional fault liability
insurance will be promptly compensated for their
own economic losses regardless of fault. A
personal protection insured can claim against and
sue the other motorist, based on fault, for
economic damages if the damages exceed their
personal protection limits and for noneconomic
damages if their injury exceeds the verbal
threshold. They will also remain in this
circumstance subject to being sued for such
liability to others based on fault.
(3) Two motorists who each choose the
personal protection policy and who are involved in
an accident with each other will be promptly
compensated under their own policies for their own
economic losses regardless of fault. In this
situation, the two motorists who have chosen the
personal protection policy do not have the right to
claim and sue for full damages based on fault
unless the damages exceed a verbal threshold but if
either suffers a loss in excess of his or her
policy's benefit levels, that person retains the
right to claim and sue for uncompensated economic
loss based on fault.
<#PAGE> (4) If a motorist who has chosen fault
liability insurance is involved in an accident with
an uninsured motorist, the policyholder can be
compensated for losses under the uninsured motorist
provisions of his or her own policy based on fault
and has the right to claim against and sue the
uninsured motorist for full damages based on fault.
The uninsured motorist forfeits any right to claim
for property damage up to ten thousand dollars and
for noneconomic loss against the motorist who has
chosen fault liability insurance, except where the
motorist choosing fault liability insurance was
driving under the influence of alcohol or illegal
drugs or committed intentional misconduct.
(5) If a motorist who has chosen the personal
protection policy is involved in an accident with
an uninsured motorist, the policyholder will be
promptly compensated for economic losses under his
or her personal protection policy regardless of
fault and has the right to claim against and sue
the uninsured motorist for noneconomic damages
based on fault if the injury exceeds the verbal
threshold. The uninsured motorist forfeits any
right to claim for the first ten thousand dollars
of property damage and for noneconomic loss against
the motorist who has chosen the personal protection
policy, except where such motorist was driving
under the influence of alcohol or illegal drugs or
committed intentional misconduct.
(D) The rate to be charged by each automobile
insurer for the basic personal protection policy
required by this act shall be at least fifteen
percent lower than the approved rate for the
minimum limits prescribed by Sections 38-77-140 and
38-77-150 by class and territory for each
automobile insurance risk in effect on September
30, 1992. The rate for the basic personal
protection policy cannot be increased for
automobile insurance policies issued or renewed
with effective dates between January 1, 1993,
through December 31, 1993.
(E) A motorist who purchases the personal
protection policy will have five thousand dollars
of property damage insurance as part of his
<#PAGE>mandatory coverage. In order to keep the cost of
property damage liability insurance as low as
possible, collision insurers of persons who have
chosen personal protection policies are prohibited
from asserting subrogation claims against other
personal protection insureds except for the
deductible amount.
(F) To the extent the terms of Section 38-78-20
may differ from the terms of Section 38-78-30, the
terms of Section 38-78-30 govern.
Section 38-78-30. As used in this chapter,
unless the context otherwise requires:
(A) `Accidental bodily injury' means bodily
injury, sickness, or disease, or death resulting
therefrom, arising out of the ownership, operation,
or use of a motor vehicle, or while occupying such
vehicle, which is accidental as to the person
insured.
(B) `Added personal protection' means an
optional policy, plan, or coverage for personal
protection which each insurer issuing motor vehicle
liability insurance in this State shall make
available in the limits set by Section
38-77-110(B)(5).
(C) `Basic personal protection' means a
policy, plan, or coverage for personal protection
which provides benefits for net loss resulting from
accidental bodily injury resulting from a motor
vehicle accident and liability coverage in at least
the amounts prescribed by Section 38-77-140. Basic
personal protection benefits consist of the
following, with an aggregate limit of fifteen
thousand dollars per person arising out of one
motor vehicle accident:
(1) medical expenses;
(2) loss of income from work, up to two
hundred dollars per week;
(3) replacement services loss, up to one
hundred dollars per week;
(4) death benefits of five thousand dollars
if the death of the injured person occurs within
one year after the date of a motor vehicle accident
and was a direct result of the accident.
<#PAGE> Each basic personal protection insurer is
permitted to incorporate in added personal
protection benefits coverage such terms,
conditions, and exclusions as may be consistent
with the premiums charged.
Motorcycles may not be covered by a personal
protection policy.
(D) `Cause of action for injury' means a
claim for accidental bodily injury for economic or
noneconomic loss, or both, caused by the negligent
conduct or intentional misconduct of another
person, and includes a claim by any person other
than a person suffering accidental bodily injury
based on such injury, including, but not limited
to, loss of consortium, companionship, or any
derivative claim.
(E) `Collateral sources' means any benefit a
person receives or is entitled to receive from any
source, other than added personal protection
benefits, as reimbursement for loss resulting from
an accidental bodily injury. In calculating the
benefits payable to a personal protection insured,
no subtraction may be made for the amounts the
personal protection insured receives or is entitled
to receive:
(1) in discharge of familial obligations or
support;
(2) by reason of another person's death,
except that amounts so received from social
security or workers' compensation shall be
subtracted; or
(3) as gratuities. Any amount paid by an
employer to an employee or the survivors of the
employee is not a gratuity.
(F) `Commissioner' means the Chief Insurance
Commissioner.
(G) `Dependent' means all persons related to
another person by blood, marriage, adoption, or
otherwise who reside in the same household at the
time of the accidental bodily injury and receive
financial services or support for him or her.
(H) `Economic loss' means actual pecuniary
loss and actual monetary expenses incurred by or on
behalf of an injured person as the result of an
<#PAGE>accidental bodily injury consisting only of medical
expense, work loss, replacement services loss, and
death benefits.
(I) `Governmental unit' means the United
States government, the government of the State of
South Carolina, and any agency, authority, board,
department, division, commission, institution,
bureau, or like governmental entity of either such
government, or any local government in this State,
and such units thereof, including, but not limited
to, counties, cities, towns, and other regional
governments.
(J) `Injured person' means a person who
sustains accidental bodily injury when eligible for
benefits under a policy providing personal
protection. The term also includes, where
appropriate, the personal representative of an
estate.
(K) `Intentional misconduct' means conduct
whereby harm is intentionally caused or attempted
to be caused by one who acts or fails to act for
the purpose of causing harm or with knowledge that
harm is substantially certain to follow when such
conduct caused or substantially contributed to the
harm claimed for. A person does not intentionally
cause or attempt to cause harm (1) merely because
his or her act or failure to act is intentional or
done with the realization that it creates a grave
risk of causing harm or (2) if the act or omission
causing bodily harm is for the purpose of averting
bodily harm to oneself or another person.
(L) `Loss of income from work' means eighty
percent loss of gross income from the work the
injured person would have continued to perform if
he or she had not been injured, reduced by any
income from substitute work actually performed by
him or her or by income he or she would have earned
in available appropriate substitute work he or she
was capable of performing but unreasonably failed
to undertake. In order to be eligible for these
benefits, the injured person must have been in an
occupational status, earning or producing income,
immediately prior to the accident. Loss of income
from work does not include any loss after the death
<#PAGE>of the injured person, and payment for the period
of disability shall not exceed two years from the
date of the accident.
Loss of income from work may be excluded from an
insured's policy, at the policyholder's request,
with an appropriate reduction in the premium.
(M) `Medical expenses' means reasonable
amounts incurred by an injured person for necessary
medical, surgical, radiological, dental, ambulance,
hospital, medical rehabilitation and professional
nursing services, eyeglasses, hearing aids, and
prosthetic devices. Medical expense may include
nonmedical remedial treatment rendered in
accordance with a recognized religious method of
healing. The words `incurred by' include medical
expenses incurred on behalf of an injured person by
a parent or guardian if the injured person is a
minor or incompetent, or by a surviving spouse if
the injured person is deceased. Personal
protection insurers may review medical expenses to
assure that the expenses are reasonable and
necessary. Under basic personal protection and
added personal protection, medical expenses are
promptly payable to the injured person for covered
expenses incurred within two years after the date
of the accident. `Medical expenses' do not
include:
(1) that portion of a charge for a room in a
hospital, clinic, or convalescent or nursing home,
or any other institution engaged in providing
nursing care and related services, in excess of a
reasonable and customary charge for semi-private
accommodations, unless medically required; or
(2) treatments, services, products, or
procedures that are experimental in nature, or for
research, or not primarily designed to serve a
medical purpose, or which are not commonly and
customarily recognized throughout the medical
profession and within the United States as
appropriate treatment of the accidental bodily
injury, or which are not performed by a
professional licensed by the professional's
licensing board pursuant to Title 40.
<#PAGE> (N) `Medical rehabilitation' means
rehabilitation services which are reasonable and
necessary to reduce the disability and help to
restore the pre-accident level of physical
functioning of the injured person.
(O) `Motor vehicle' is defined by Section
38-77-30(7).
(P) `Noneconomic loss' means any loss other
than economic loss and includes, but is not
necessarily limited to, pain, suffering,
inconvenience, physical impairment, mental anguish,
emotional pain and suffering, hedonic damages, and
loss of any of the following: earning capacity,
consortium, society, companionship, comfort,
protection, marital care, parental care, filial
care, attention, advice, counsel, training,
guidance, or education. Noneconomic loss does not
include economic loss caused by pain and suffering
or by physical impairment.
(Q) `Occupying' means to be in or upon a
motor vehicle or engaged in the immediate act of
entering into or alighting from the motor vehicle.
(R) `Operation or use' means operation or use
of a motor vehicle as a motor vehicle, including,
incident to its operation or use as a vehicle,
occupying it. Operation or use of a motor vehicle
does not cover conduct within the course of a
business of manufacturing, selling, or maintaining
a motor vehicle, including repairing, servicing,
washing, loading, or unloading, nor does it include
such conduct not within the course of such a
business, unless such conduct occurs while
occupying a motor vehicle.
(S) `Owner' means the person or persons,
other than a lienholder or secured party, who owns
or has title to a motor vehicle or is entitled to
the use and possession of a motor vehicle subject
to a security interest held by another person.
Owner does not include (i) a lessee under a lease
not intended as security, or (ii) the United States
of America or any agency thereof, except with
respect to motor vehicles for which it has elected
to provide insurance.
<#PAGE> (T) `Person' includes an organization, public
or private.
(U) `Personal protection' means a policy,
plan, or coverage which provides basic or added
personal protection benefits for loss resulting
from accidental bodily injury, regardless of fault.
(V) `Personal protection insured' means:
(1) a person identified by name as an insured
in a contract providing personal protection
benefits;
(2) while residing in the same household with
a named insured, the following persons:
(a) a spouse or other relative of a named
insured; or
(b) a minor in the custody of a named
insured. A person resides in the same household if
he or she usually makes his or her home in the same
family unit, even though he or she temporarily
lives elsewhere;
(3) a person with respect to accidents within
this State who sustains accidental bodily injury
while occupying or when struck by a motor vehicle
insured for personal protection, unless the person
has rejected the coverage under Section 38-78-120.
(W) `Personal protection insurer' means an
automobile insurer.
(X) `Replacement services loss' means
expenses reasonably incurred in obtaining ordinary
and necessary services from others, not members of
the injured person's household, in lieu of those
the injured person would have performed for the
benefit of the household. Replacement services
loss does not include any loss incurred after the
death of an injured person, and the disability
period shall not exceed two years from the date of
the accident.
(Y) `Resident relative' means a person
related to the owner of a motor vehicle by blood,
marriage, adoption, or otherwise and residing in
the same household. A person resides in the same
household if he or she usually makes his or her
home in the same family unit, even though
temporarily living elsewhere.
<#PAGE> (Z) `Serious injury' means an accidental
bodily injury which results in death, serious and
permanent loss of an important bodily function,
permanent and serious bodily injury determined
objectively within reasonable medical probatility,
or serious and permanent disfigurement.
(aa) `Uncompensated economic loss' means that
portion of economic loss arising out of an
accidental bodily injury of an injured person which
exceeds the benefits provided by a personal
protection insurer under a policy providing such
benefits (except for loss incurred by a deductible
under such a policy) and collateral sources. Such
loss is payable under the same terms and
limitations as under added personal protection but
shall not be subject to the limit of liability of
such coverage.
(bb) `Uninsured motorist' means the owner of
a motor vehicle uninsured for either basic personal
protection or liability insurance at the limits
prescribed by this State's financial responsibility
laws or who otherwise fails to comply with the
financial responsibility laws of this State.
(cc) `Uninsured motor vehicle' means a motor
vehicle required to be registered as to which (i)
there is no bodily injury liability insurance and
property damage liability insurance, (ii) no bond
has been given or cash or securities delivered in
lieu thereof, (iii) the owner has not qualified as
a self-insurer, or (iv) there is no basic or added
personal protection insurance as defined in Section
38-78-30.
Section 38-78-40. Each motor vehicle required
to be registered in this State shall be insured for
basic personal protection as defined by Section
38-78-30(C) and security for payment of tort
liabilities as required by Section 38-77-140,
unless the owner of the motor vehicle exercises his
or her right of rejection under Section 38-78-120
or complies with Section 56-10-520 relating to the
right to drive without insurance. This insurance
may be provided by a contract of insurance or by
<#PAGE>qualifying as a self-insurer in compliance with
Section 56-9-60.
An insurance policy written by a personal
protection insurer under this chapter to provide
basic personal protection is deemed to include all
coverages required by this chapter, including the
minimum tort liability coverage. Coverage under
basic personal protection meets the requirements of
this State's financial responsibility laws.
Section 38-78-50. Every personal protection
insured must be offered uninsured motorist coverage
as required by Section 38-77-150. Additional
uninsured motorist coverage and underinsured
motorist coverage must be offered to the insured as
required by Section 38-77-160. All other
provisions, rights, and obligations in Sections
38-77-150 and 38-77-160 apply to the personal
protection insured and the insurer. A personal
protection insured may not recover under the
uninsured motorist provision of the personal
protection policy if the personal protection
insured was at fault in the accident. Noneconomic
damages may only be recovered under this provision
if the threshold as defined in Section 38-78-110 is
reached.
Section 38-78-55. Regardless of the number of
motor vehicles involved, policies issued, persons
covered, claims made, or premiums paid, the
liability limits for multiple coverages under one
or more automobile insurance policies must not be
combined or added together to determine the maximum
limit of coverage available to an injured person.
Unless the insurance policy or contract clearly
provides otherwise, the policy or contract may
provide that if two or more policies, plans, or
coverages apply equally to the same accident, the
highest limit of liability applicable is the
maximum amount available to an injured person under
any one of the policies, plans, or coverages.
Section 38-78-60. (A) A personal protection
insurer shall pay to a personal protection insured
<#PAGE>benefits for accidental bodily injury sustained
within the United States, its territories, or
possessions or Canada.
(B) A personal protection policy issued in this
State contains coverage such that it satisfies the
financial responsibility laws of any other state or
Canadian province in which the insured motor
vehicle is operated.
Section 38-78-70. (A) A personal protection
insurer has no obligation to provide benefits to or
on behalf of an injured person who at the time of
the accident:
(1) was involved in a motor vehicle accident
while committing a felony or while voluntarily
occupying a motor vehicle that he or she knew to be
stolen. If the person dies as a result of his or
her own intentional misconduct, his or her
survivors are not entitled to personal protection
for loss arising from the decedent's injury or
death;
(2) was driving under the influence of
alcohol or illegal drugs;
(3) was occupying an uninsured motor vehicle
owned by the person;
(4) was guilty of intentional misconduct. If
the person dies as a result of his or her own
intentional misconduct, his or her survivors are
not entitled to personal protection for loss
arising from the decedent's injury or death;
(5) has rejected the limitation on his or her
right to sue under Section 38-78-120;
(6) was an uninsured motorist;
(7) was operating or occupying a motor
vehicle with three or fewer load bearing wheels;
(8) was operating an insured vehicle without
the express or implied consent of the owner; or
(9) was injured while occupying a motor
vehicle owned by, or furnished or available for the
regular use of, the injured person, or the injured
person's resident spouse or relative, if such motor
vehicle is not described in the policy under which
a claim is made, or is not a newly acquired or
<#PAGE>replacement motor vehicle covered under the terms
of the policy.
(B) A personal protection insurer may include in
personal protection coverage any person under
subsection (A) if the insurer states its intent to
do so clearly on the policy.
Section 38-78-80. At the option of the personal
protection insurer, personal protection benefits
are payable to any of the following persons:
(1) the injured person;
(2) the parent or guardian of the injured
person, if the injured person is a minor or
incompetent;
(3) a survivor, executor, or administrator of
the injured person; or
(4) any other person or organization rendering
the services for which payment is due.
Section 38-78-90. Subject to Section 38-78-80,
a person who is entitled to receive personal
protection benefits may claim the benefits in the
following order up to the limits of personal
protection in the listed category:
(1) the personal protection covering a motor
vehicle involved in the accident, if the person
injured was an occupant of or was struck by the
motor vehicle. If the personal protection insurer
providing such insurance fails to make payment for
loss within thirty days after receipt of reasonable
proof of the fact and the amount of loss sustained,
the injured person shall be entitled to payment
under any contract of personal protection insurance
under which he is a personal protection insured and
the insurer making the payments shall be entitled
to full reimbursement from the insurer providing
the insurance covering the vehicle;
(2) the personal protection under which the
injured person is or was an insured.
Section 38-78-100. (A) A personal protection
insurer is obligated to indemnify an injured
person, except that benefits payable for the same
accidental bodily injury under state-mandated
<#PAGE>disability coverage or workers' compensation or
similar occupational compensation act shall be
subtracted from the personal protection benefits
payable to the injured person.
(B) A basic personal protection insurer must
offer a deductible to the named insured of a
personal protection policy in the amounts of two
hundred fifty dollars, five hundred dollars, and
one thousand dollars to apply with respect to a
claim by the named insured or a person residing in
the same household with the named insured. If the
named insured accepts such offer, the rate must be
reduced for such coverage in an amount filed by the
insurer and approved by the commissioner. The
named insured is not required to accept the offer
and may choose personal protection coverage without
a deductible other than for property damage caused
by an uninsured motorist.
Section 38-78-110. (A) Any person who
registers, operates, maintains, or uses a motor
vehicle on the public roadways of this State shall,
as a condition of such registration, operation,
maintenance, or use of such motor vehicle and use
of the public roadways, be deemed to have accepted
the provisions of this chapter, and in particular
those provisions which are contained in this
section.
(B) Tort liability with respect to accidents
occurring in this State and arising out of the
ownership, maintenance, or use of a motor vehicle
is abolished with respect to any person entitled to
benefits pursuant to Section 38-78-30(C) except to
the extent such person has sustained an injury as
defined in subsection (C) of this section and
except to the extent such person has sustained
actual economic loss in excess of the limits of any
applicable personal protection policy.
(C) In any action of tort brought against the
owner, registrant, operator, or occupant of a motor
vehicle with respect to which security has been
provided as required in this chapter, or against
any person or organization legally responsible for
his acts or omissions, a plaintiff may recover
<#PAGE>damages in tort for pain, suffering, mental
anguish, and inconvenience because of bodily
injury, sickness, or disease arising out of the
ownership, maintenance, operation, or use of such
motor vehicle only in the event that the injury
reaches one of the following thresholds:
(1) the injury or disease consists in whole
or in part of permanent and serious disfigurement;
(2) permanent and serious bodily injury,
determined objectively, within reasonable medical
probability;
(3) permanent and serious loss of an
important bodily function; or
(4) death.
Section 38-78-120. (A) Any person may refuse to
consent to the limitations on his tort rights and
liabilities. To ensure preservation of the right
to choose to reject any limitations on tort rights
and liability contained in this chapter, any person
may execute a form approved by the commissioner for
rejecting such limitations. Within sixty days
after the enactment of this chapter, a temporary
committee composed of the commissioner, the
Consumer Advocate, two representatives of the South
Carolina Bar, (one specializing in the defense of
claims and one specializing in the prosecution of
claims) appointed by the Governor, a representative
of an automobile insurer appointed by the Consumer
Advocate, a member of the judiciary appointed by
the Chief Justice of the Supreme Court, and an
insurance agent appointed by the commissioner shall
formulate the rejection form to be used by all
insurers in South Carolina.
(B) The form shall establish the effective date
of such a rejection. Any rejection by a person who
is under a legal disability shall be made on behalf
of such person by a parent, legal guardian,
conservator, or committee and shall remain in
effect until revoked or until the person is no
longer under legal disability, whichever is sooner.
The failure of such guardian, parent, conservator,
or committee of a person under a legal disability
to file a rejection, within six months from the
<#PAGE>date that this chapter would otherwise become
applicable to such person, is deemed to be an
affirmative acceptance of the limitations on tort
liability. Any person who at the time of an
accident does not have basic personal protection
but has not formally rejected such limitations and
has in effect security equivalent to that required
by Section 38-77-140 is deemed to have fully
rejected the tort limitations for that accident
only.
(C) A rejection of tort limitations must be
immediately filed with the insurance company or
agent who provides the insurance policy and is
effective on the date of its filing. The rejection
applies to any motor vehicle accident occurring
after that date. The rejection remains effective
until it is revoked in writing on a form approved
by the commissioner at the time of renewal or
issuance of a new policy by the purchase of a tort
policy. The revocation is effective upon its
filing with the insurance company or agent who
provides the insurance policy and remains effective
until it is withdrawn in a manner prescribed by the
commissioner. The rejection form is a matter of
public record.
(D) The commissioner shall establish and
maintain a program designed to assure that all
consumers are adequately informed about the
comparative cost of personal protection insurance
and liability insurance for those persons who
choose to reject limitations on tort rights and
liabilities, as well as the benefits, rights and
responsibilities of insureds under each type of
insurance.
(E) A person who selects personal protection
coverage or who rejects tort limitations on a form
approved by the commissioner is bound by that
choice and is precluded from claiming liability of
any party based on being inadequately informed as
to the coverage or rejection. This restriction
also applies to relatives residing in the same
household.
(F) Each motor vehicle insurer issuing motor
vehicle liability insurance in this State may
<#PAGE>require that all policies within a household be
either personal protection policies or liability
policies which satisfy the financial responsibility
laws of this State.
(G) To further insure preservation of the right
to reject the limitations on tort rights contained
in this chapter, the commissioner shall establish
procedures whereby any person who does not own a
motor vehicle and who is not a resident relative of
such an owner may, after sustaining accidental
bodily injury, execute a form prescribed by the
commissioner for rejecting such limitation within
sixty days after the date of the accident. If any
personal protection benefits are paid before the
rejection is effective, the personal protection
insurer has a right of subrogation for any payments
made through a tort recovery.
Section 38-78-125. (A) A person may bring a
cause of action for injury against a person who
caused him actual ec.onomic loss, for any
uncompensated economic loss.
(B) A person suffering accidental bodily injury
while occupying or when struck by a motor vehicle
which is insured for personal protection and who is
not at the time of the accident covered by a
rejection of limitations on tort rights and
liabilities under Section 38-78-120 and is not an
uninsured motorist may receive personal protection
benefits applicable to the motor vehicle and has a
right to claim uncompensated economic loss against
the personal protection insured. A person who
files a claim under this subsection has the same
rights and duties as a personal protection insured
with respect to a claim by that insured.
(C) An uninsured injured motorist may not claim
in tort for property damage except for such damage
that exceeds ten thousand dollars or for
noneconomic damages, unless the motor vehicle
operator is driving under the influence of alcohol
or illegal drugs or is guilty of intentional
misconduct. An uninsured motorist retains fault
liability with respect to others. A person driving
under the influence of alcohol or illegal drugs may
<#PAGE>not claim in tort for either economic or
noneconomic damages against a person who has
rejected tort limitations. A person who rejects
tort limitations shall not collect personal
protection benefits unless he or she has revoked
his or her rejection under Section 38-78-120(C).
(D) Personal protection benefits received shall
include reasonable expenses incurred by the person
in collecting the benefits and shall include
reasonable attorney fees. No part of the attorney
fees may be charged against benefits otherwise due
the claimant, and an attorney may not charge an
additional fee to collect the benefits. Part or
all of the attorney fees may be deducted from the
benefits otherwise owing if a significant part of
the claim was fraudulent. In an action brought by
a personal protection insurer, attorney fees shall
be awarded to the injured person only if the
injured person is the prevailing party.
(E) A personal protection insured has a cause of
action against another personal protection insured
for property damage only to the extent that the
property is not covered by collision insurance or
to recover any required deductible.
(F) A personal protection insured suffering
accidental bodily injury has no cause of action for
injury against a governmental unit or any
individual for whom a governmental unit is
vicariously liable if:
(1) the cause of action is based on something
other than the operation or use of the motor
vehicle, and
(2) within one hundred eighty days after the
accident or after the filing of the cause of
action, the governmental unit agrees in writing to
pay the personal protection insured added
protection benefits to cover any economic loss in
excess of any benefits paid by a personal
protection insurer, including attorney fees. A
personal protection insured may, however, reject
such offer to be paid added protection benefits and
pursue a cause of action for injury against any
such individual, but only if it can be proven
<#PAGE>beyond a reasonable doubt that such individual was
guilty of wanton or intentional misconduct.
Section 38-78-140. (A) Personal protection
benefits are payable monthly as loss accrues. Loss
accrues not when the injury occurs but as work
loss, replacement services loss, or medical expense
is incurred. The benefits are overdue if they are
not paid within thirty days after the personal
protection insurer receives reasonable proof of the
fact and the amount of loss sustained, except that
a personal protection insurer may accumulate claims
for a period not to exceed thirty days, in which
case benefits are not overdue if they are paid
within twenty days after the period of
accumulation. If reasonable proof is not supplied
for the whole claim, the amount supported by
reasonable proof is overdue if it is not paid
within thirty days after the proof is received by
the insurer. Any part or all of the remainder of
the claim that is later supported by reasonable
proof is overdue if it is not paid within thirty
days after the proof is received by the insurer.
To determine the extent to which any benefits are
overdue, a payment is treated as made on the date
a draft or other valid instrument is mailed or, if
not so posted, the date of delivery. The personal
protection insurer may pay personal protection
benefits directly to a person who supplies
necessary products, services, or accommodations to
the injured person. All overdue payments shall
bear interest at the rate of one hundred fifty
percent of the prime rate in effect at the time the
payments become overdue.
(B) If overdue benefits are recovered against a
personal protection insurer or are paid by a
personal protection insurer, the provisions of
Section 38-78-110(E) pertaining to expenses and
attorney fees apply. The remedy set forth in this
section is the exclusive remedy for an insurer's
failure to pay or delay in paying personal
protection benefits or for conduct of an insurer
arising out of the manner in which the insurer
denied or delayed payment.
<#PAGE> (C) An insurer who rejects a claim for basic
personal protection benefits shall give to the
claimant prompt written notice of the rejection,
specifying the reason.
Section 38-78-150. (A) Personal protection
benefits, except medical benefits, are exempt from
garnishment, attachment, execution, or any other
process or claim to the extent that wages or
earnings are exempt under any applicable law.
(B) An agreement for assignment of any right to
personal protection benefits payable in the future,
except for medical benefits, is unenforceable
except to the extent that the benefits are for the
cost of products, services, or accommodations
provided or to be provided by the assignee or that
the benefits are for loss of income from work or
replacement services and are assigned to secure
payment of alimony, maintenance, or child support.
Section 38-78-160. An insurer is allowed a
reasonable attorney fee for defending a claim for
benefits that is fraudulent or so excessive as to
have no reasonable foundation. The fee may be
treated as an offset against benefits due or which
thereafter accrue. The insurer may recover from
the claimant any part of the fee not offset or
otherwise paid.
Section 38-78-170. An insurer under a policy of
personal protection insurance may require written
notice to be given as soon as practicable after an
accident involving a secured vehicle for which it
provides coverage.
Section 38-78-190. If no personal protection
benefits have been paid other than death benefits,
a person may bring an action against the personal
protection insurer not later than two years after
the accidental bodily injury occurred. If personal
protection benefits have been paid, a person may
bring an action to recover further benefits not
later than two years after the last payment of
benefits.
<#PAGE> Section 38-78-200. (A) If the mental or
physical condition of an injured person is material
to any claim for past or future personal protection
benefits, the injured person shall submit to
reasonable mental or physical examinations by a
physician or physicians designated by the insurer,
at the insurer's expense. The examinations shall
take place at a reasonably convenient time and
location. A personal protection insurer may
include provisions of this nature in a personal
protection policy.
(B) If after a request by a personal protection
insurer a person refuses to submit to reasonable
mental and physical examinations by a physician or
physicians designated by the insurer or refuses to
undergo mental or rehabilitation services payable
by the insurer, the insurer, on written notice, may
suspend all future benefits until the person
complies with the request.
Section 38-78-210. (A) On request by a claimant
or personal protection insurer, an employer shall
provide information on a form approved by the
commissioner, including the work records and
earnings, regarding an employee who has filed a
claim for personal protection benefits. On request
of the claimant or insurer the information must
cover the period specified by the claimant or
insurer making the request and may include a
reasonable period before, and the entire period
after, the injury.
(B) The claimant, upon request by the insurer,
must provide to the insurer the names and addresses
of the physicians and medical facilities rendering
diagnosis or treatment in regard to the injury or
to a relevant injury and the claimant shall
authorize the insurer to inspect and copy any
relevant medical records.
(C) Every physician or other health care
provider, including, but not limited to, a
hospital, clinic, or other medical institution
providing, before or after an injury resulting from
a motor vehicle accident upon which a claim for
personal protection benefits is based, any
<#PAGE>products, services, or accommodations in relation
to that or any other injury, or in relation to a
condition claimed to be connected with that or any
other injury, shall, if requested to do so by the
personal protection insurer against whom the claim
has been made, furnish a written report of the
history, condition, treatment, and the dates and
costs of such treatment, of the injured person.
Such information shall be provided together with a
sworn statement that the treatment or services
rendered were reasonable and necessary with respect
to the injury sustained and identifying which
portion of the expenses for such treatment or
services were incurred as a result of such injury.
Every such physician or other health care provider,
hospital, clinic, or other medical institution
shall also promptly produce and permit the
inspection and copying of its records regarding
such history, condition, and treatment, and the
dates and costs of treatment. The sworn statement
required under this section shall read as follows:
`Under penalty of perjury I declare that I have
read the foregoing and the facts alleged are true,
to the best of my knowledge and belief.'
(D) No cause of action for violation of a
physician-patient privilege or invasion of the
right of privacy is allowed against any physician
or other health care provider, hospital, clinic, or
other medical institution complying with the
provisions of this section.
(E) The person requesting records and a sworn
statement under this section shall pay all
reasonable costs connected therewith.
(F) A court may order or prohibit discovery of
any records under this section in case of any
dispute as to the right of a claimant or insurer to
discover the information required to be disclosed
by this section.
Section 38-78-240. A physician or other health
care provider, including, but not limited to, a
hospital, clinic, or other health care institution
rendering treatment to an injured person, may
charge only a reasonable amount for the products,
<#PAGE>services, and accommodations rendered. The charge
shall not exceed the amount the person or
institution customarily charges for the products,
services, and accommodations in cases not involving
insurance.
Section 38-78-250. A personal protection
insurer, with the approval of the commissioner, may
use managed care systems, including, but not
limited to, health maintenance organizations and
preferred provider options, and may require an
injured person to obtain health care through a
managed care system designated by the personal
protection insurer if the injured person opts at
the time of purchase of personal protection
coverage to be subject to a managed care system at
an appropriately reduced premium.
Section 38-78-260. The commissioner shall adopt
rules which encourage personal protection insurers
to institute incentives for personal protection
insureds to install, maintain, and make use of
injury-reducing devices such as seat and harness
belts, air bags, and child restraint systems.
Section 38-78-280. (A) Each insurer authorized
to transact business or transacting business in
this State shall file with the commissioner a form
approved by the commissioner which states that any
contract of motor vehicle liability insurance,
wherever issued, covering the maintenance or use of
a motor vehicle while the motor vehicle is in this
State, is deemed to satisfy Section 38-78-40 once
the vehicle has been continuously present in this
State for thirty days unless the named insured has
rejected the limitations on tort rights and
liabilities under Section 38-78-120.
(B) If a person is entitled to personal
protection benefits or their equivalent under the
requirements of more than one state, the person
shall elect to recover under the laws of one state.
The election represents the exclusive source of
recovery of all personal protection benefits, or
their equivalent, paid or payable under the
<#PAGE>financial responsibility requirements of that or
any other state.
Section 38-78-290. All insurance coverages
provided under this chapter are subject to such
terms, conditions, and exclusions which have been
approved by the commissioner.
Section 38-78-325. The commissioner may adopt
additional regulations for effective administration
which are fair, equitable, and consistent with the
purpose of this chapter."
SECTION 2. Section 38-77-30(1) of the 1976 Code
is amended to read:
"(1) `Automobile insurance' means automobile
bodily injury and property damage liability
insurance, including medical payments and uninsured
motorist coverage, and automobile physical damage
insurance such as automobile comprehensive physical
damage, collision, fire, theft, combined additional
coverage, and similar automobile physical damage
insurance and economic loss benefits as provided by
this chapter written or offered by automobile
insurers. Automobile insurance policy includes a
motor vehicle liability policy as defined in item
(7) of Section 56-9-20 and includes the personal
protection policy as defined in Section
38-78-30(C)."
SECTION 3. Section 38-77-110(B) of the 1976
Code, as added by Act 148 of 1989, is amended by
adding the following:
"(5) two hundred fifty thousand dollars for
added personal protection coverage as defined in
Section 38-78-30(B)."
SECTION 4. Article 3, Chapter 77, Title 38 of
the 1976 Code is amended by adding:
"Section 38-77-355. (A) In a claim or action
for personal injury or wrongful death arising out
<#PAGE>of the ownership, operation, use, or maintenance of
a motor vehicle, the court shall admit into
evidence the total amount paid to the claimant from
collateral sources, and the court shall instruct
the jury to deduct from its verdict the value of
all benefits received by the claimant from
collateral sources.
(B) For purposes of this section, `collateral
sources' means payments made to the claimant, or on
his behalf, by or pursuant to:
(1) automobile liability, uninsured motorist,
underinsured motorist, or automobile accident
insurance that provides health benefits or income
disability coverage;
(2) personal protection benefits paid or
payable by law;
(3) payments made from a policy of automobile
insurance by or on behalf of a joint tortfeaser,
either by way of settlement or judgment.
(C) No claimant may make claim or demand, no
court may order payment, and no insurer may pay by
way of settlement, covenant not to sue, or trust or
loan agreement for an item of damages to the extent
that the claimant has already received, or will
receive, reimbursement for that item as a result of
a collateral source payment as defined in this
section."
SECTION 5. Section 38-77-280 of the 1976 Code,
as last amended by Act 113 of 1991, is further
amended to read:
"Section 38-77-280. <STRK>(A) Except as provided in
subsection (B), all automobile insurers, including
those insurance companies writing private passenger
physical damage coverages only, shall make
collision coverage and either comprehensive or
fire, theft, and combined additional coverage
available to an insured or qualified applicant who
requests the coverage.
Collision coverage must have a mandatory
deductible of two hundred fifty dollars, but an
insured or qualified applicant, as his option, may
<#PAGE>select an additional deductible in appropriate
increments up to one thousand dollars.
Comprehensive coverage or fire, theft, and
combined additional coverages must have a mandatory
deductible of two hundred fifty dollars, but an
insured, at his option, may select an additional
deductible in appropriate increments up to one
thousand dollars. This deductible does not apply
to auto safety glass. It is an unfair trade
practice, as described in Sections 38-57-30 and
38-57-40, for an insurer or an agent to sell
collision insurance, comprehensive coverage, or
fire, theft, and combined additional coverages
unless the insured is notified at the time of
application of the savings which may be realized if
the applicant or the insured selects a higher
deductible. This notice is required only at the
time of the initial sale and must be in a form
approved by the Chief Insurance Commissioner. An
insurer may offer insureds lower deductibles at the
insurer's option.
(B) Notwithstanding subsection (A) and Sections
38-77-110 and 38-77-920, automobile insurers may
refuse to write automobile physical damage
insurance coverage, including automobile
comprehensive physical damage, collision, fire,
theft, and combined additional coverage, for an
applicant or existing policyholder, on renewal, for
a motor vehicle customarily operated by an
individual, either the named insured or any other
operator not excluded in accordance with Section
38-77-340 and who resides in the same household,
where one or more of the conditions or factors
prescribed in Section 38-73-455 exist. In
addition, automobile insurers may refuse to write
physical damage insurance coverage to any applicant
or existing policyholder, on renewal, who has
collected benefits provided under any automobile
insurance physical damage coverage during the
thirty-six months immediately preceding the
effective date of coverage, for two or more total
fire losses or two or more total theft losses.
Automobile insurers may refuse to write for private
passenger automobiles comprehensive physical
<#PAGE>damage, collision, fire, theft, and combined
additional coverage, for an applicant or existing
policyholder, on renewal, for a motor vehicle
customarily operated by an individual, either the
named insured or another operator not excluded in
accordance with Section 38-77-340 and who resides
in the same household, which does not qualify for
the safe driver discount in Section 38-73-760(e).
(C) Notwithstanding Section 38-77-110,
automobile physical damage coverage in an
automobile insurance policy may be canceled at any
time during the policy period by reason of the
factors or conditions described in Section
38-73-455(A) or Section 38-77-280(B) which existed
before the commencement of the policy period and
which were not disclosed to the insurer at the
commencement of the policy period.
(D) No policy of insurance which provides
automobile physical damage coverage only may be
ceded to the facility.
(E) Insurers of automobile insurance may charge
a rate for physical damage insurance coverages
different than those provided for in Section
38-73-457 if the rates are filed and approved by
the Chief Insurance Commissioner. Any applicant or
existing policyholder, to be charged this different
rate, must be denied the coverage pursuant to
subsection (B) at the rate provided in Section
38-73-457.
(F) A carrier may not cede collision coverage,
comprehensive coverage, or fire, theft, and
combined additional coverages with a deductible of
less than two hundred fifty dollars. An insured or
qualified applicant may select an additional
deductible in appropriate increments up to one
thousand dollars. However, the mandatory
deductible does not apply to safety glass.</STRK>
Notwithstanding Sections 38-77-110 and 38-77-920,
after September 30, 1992, automobile insurers may
refuse to write or renew private passenger
automobile physical damage insurance coverage,
including automobile comprehensive physical damage,
collision, fire, theft, and combined additional
coverage for an applicant or existing policyholder.
<#PAGE>After September 30, 1992, no private passenger
automobile physical damage insurance coverage may
be ceded to the Facility."
SECTION 6. Section 38-77-30(4) of the 1976 Code
is amended to read:
"(4) `Damages' includes <STRK>both</STRK> actual <STRK>and
punitive</STRK> damages only."
SECTION 7. Section 38-77-140 of the 1976 Code
is amended to read:
"Section 38-77-140. (A) No automobile
insurance policy may be issued or delivered in this
State to the owner of a motor vehicle or may be
issued or delivered by an insurer licensed in this
State upon any motor vehicle then principally
garaged or principally used in this State, unless
it contains a provision insuring the persons
defined as insured against loss from the liability
imposed by law for actual damages arising out of
the ownership, maintenance, or use of these motor
vehicles within the United States or Canada,
subject to limits exclusive of interest and costs,
with respect to each motor vehicle, as follows:
fifteen thousand dollars because of bodily injury
to one person in any one accident, and, subject to
the limit for one person, thirty thousand dollars
because of bodily injury to two or more persons in
any one accident, and five thousand dollars because
of injury to or destruction of property of others
in any one accident. Nothing in this article
prevents an insurer from issuing selling, or
delivering a policy providing liability coverage in
excess of these requirements.
(B) An insurer shall also offer the insured, in
accordance with Section 38-77-350, a rider or
endorsement for an additional premium to cover such
liability for punitive damages. The insured has
the option of accepting or refusing coverage for
punitive damages.
As a result of passage of this section, all
insurers offering bodily injury liability coverage
<#PAGE>shall file with the Chief Insurance Commissioner,
not later than ninety days after the effective date
of this act, revised premium rates for bodily
injury liability coverage. The revised rates must
be approved by the commissioner and reflect a
reduction in the currently approved premium rate
for this coverage of at least one and one-half
percent. Insurers shall file with the commissioner
not later than sixty days after the effective date
of this act premium charges for the punitive
damages loss coverage. The premium rate for this
coverage shall become effective for the automobile
insurance policies issued or renewed with effective
dates on or after January 1, 1993, and may not be
approved if it is more, when combined with the
reduced premium rate for the new bodily injury
liability coverage with limitations on the recovery
of punitive damages, than the bodily injury
liability premium rate for that insurer on the
effective date of this act; however, after December
31, 1993, an insurer may apply to the Chief
Insurance Commissioner for a rate adjustment for
such coverage, based on its actual experience."
SECTION 8. Section 38-77-150 of the 1976 Code
is amended to read:
"Section 38-77-150. (A) No automobile
insurance policy or contract may be issued or
delivered unless it contains a provision by
endorsement or otherwise, herein referred to as the
uninsured motorist provision, undertaking to pay
the insured all sums which he is legally entitled
to recover as actual damages from the owner or
operator of an uninsured motor vehicle, within
limits which <STRK>may be</STRK> are no less than the
requirements of Section 38-77-140. The uninsured
motorist provision <STRK>shall</STRK> must also provide for no
less than five thousand dollars' coverage for
injury to or destruction of the property of the
insured in any one accident but may provide an
exclusion of the first two hundred fifty dollars of
the loss or damage.
<#PAGE> (B) Automobile insurers shall offer, at the
option of the insured and in the manner hereinafter
described, higher limits of uninsured motorist
coverage in accordance with Section 38-77-350. The
offer of higher limits must be made in connection
with every initial application for an automobile
insurance policy by including a written explanation
of the coverage and inquiry of the applicant, in a
form prescribed by the Chief Insurance
Commissioner, as to whether the applicant desires
to purchase uninsured motorist coverage with limits
greater than the mandatory coverages described in
subsection (A). No such explanation or inquiry
need be made with respect to any renewal,
replacement, reinstatement, substitute, or
modification of the policy. An insured may, at any
time and subject to the limits of this section,
specifically request in writing uninsured motorist
coverage limits greater than that provided on the
current or any prior policy.
(C) Insurers shall offer on a form prescribed by
the Chief Insurance Commissioner `nonstackable'
policies of uninsured motorist coverage containing
policy provisions establishing that if the insured
accepts this offer:
(1) Regardless of the number of vehicles
involved, persons covered, number of premiums paid,
or vehicles or premiums shown on the policy or
policies under which the insured might otherwise be
entitled to benefits, the coverage provided as to
two or more motor vehicles under the same or
different policies may not under any circumstances
be added together, combined with, or stacked to
determine the limit of insurance coverage available
to an injured person for any one accident, except
as provided in item (3) of this subsection (C).
(2) If at the time of the accident the
injured person is occupying a motor vehicle, the
uninsured motorist coverage available to him is the
coverage available as to that motor vehicle.
(3) If the injured person is occupying a
motor vehicle which is not owned by him or by a
family member residing with him, he is entitled to
the highest limits of uninsured motorist coverage
<#PAGE>afforded for any one vehicle as to which he is
named insured. Such coverage is excess over the
coverage on the vehicle he is occupying.
(4) The uninsured motorist coverage provided
by the policy does not apply to the named insured
who is injured while occupying any vehicle owned by
the named insured for which uninsured motorist
coverage was not purchased.
(5) If at the time of the accident the
injured person is not occupying a motor vehicle, he
is entitled to select any one limit of uninsured
motorist coverage for any one vehicle afforded by
a policy under which he is insured as a named
insured.
(6) In connection with the offer authorized
by this subsection, insurers shall inform the named
insured, applicant, or lessee, on a form prescribed
by the Chief Insurance Commissioner, of the
limitations imposed under this subsection and that
such coverage is an alternative to coverage without
such limitations. If this form is signed by a
named insured, applicant, or lessee, it is
conclusively presumed that there was an informed,
knowing acceptance of such limitations, and neither
the insurance company nor the insurance agent has
any liability to the insured for the insured's
failure to purchase stackable coverage. When the
named insured, applicant, or lessee has initially
accepted such limitations, the acceptance applies
to any policy which renews, extends, changes,
supersedes, reinstates or replaces an existing
policy unless the named insured requests deletion
of the limitations and pays the appropriate premium
for the coverage. Any insurer who provides
coverage which includes the limitations provided in
this subsection shall file revised premium rates
with the Department of Insurance for such uninsured
motorist coverage to take effect before initially
providing such coverage. The revised rates must
reflect the anticipated reduction in loss costs
attributable to such limitations but, in any event,
must reflect a reduction in the uninsured motorist
coverage premium of at least fifteen percent for
policies with such limitations. Insurers shall
<#PAGE>file within ninety days after the effective date of
this act, revised premium rates with the Chief
Insurance Commissioner to be effective on
automobile insurance policies issued or renewed
with effective dates on or after January 1, 1993.
(D) Premium rates made by insurers for uninsured
motorist coverage must be determined and regulated
as premium rates for automobile insurance generally
are determined and regulated. The Chief Insurance
Commissioner <STRK>may prescribe</STRK> shall promulgate the
form to be used in providing uninsured motorist
coverage and <STRK>when prescribed and promulgated</STRK> no
other form may be used.
(E) No action may be brought under the uninsured
motorist provision unless copies of the pleadings
in the action establishing liability are served in
the manner provided by law upon the insurer writing
the uninsured motorist provision. The insurer has
the right to appear and defend in the name of the
uninsured motorist in any action which may affect
its liability and has thirty days after service of
process on it in which to appear. The evidence of
service upon the insurer may not be made a part of
the record.
(F) Benefits paid pursuant to this section are
subject to subrogation and assignment."
SECTION 9. Section 38-77-160 of the 1976 Code,
as last amended by Act 148 of 1989, is further
amended to read:
"Section 38-77-160. (A) Automobile <STRK>insurance
carriers</STRK> insurers shall offer on a form prescribed
by the Chief Insurance Commissioner, at the option
of the insured in accordance with Section 38-77-350
<STRK>uninsured</STRK> underinsured motorist coverage <STRK>up to the
limits of the insured's liability coverage in
addition to the mandatory coverage prescribed by
Section 38-77-150. Such carriers shall also offer,
at the option of the insured, underinsured motorist
coverage up to the limits of the insured liability
coverage to provide coverage in the event that
damages are sustained in excess of the liability
limits carried by an at fault insured or
<#PAGE>underinsured motorist. If, however, an insured or
named insured is protected by uninsured or
underinsured motorist coverage in excess of the
basic limits, the policy shall provide that the
insured or named insured is protected only to the
extent of the coverage he has on the vehicle
involved in the accident. If none of the insured's
or named insured's vehicles is involved in the
accident, coverage is available only to the extent
of coverage on any one of the vehicles with the
excess or underinsured coverage.</STRK> up to the limits
selected for the insured's liability coverage to
provide coverage in the event the insured becomes
legally entitled to collect damages from the owner
or operator of an underinsured motor vehicle, as
defined in Section 38-77-30(14). The maximum
liability of the insurer under the underinsured
motorist coverage provided is the lesser of: (1)
the difference between the limit of underinsured
motorist coverage and the amount paid or payable to
the insured by or for any person or organization
who is held legally liable for the bodily injury or
property damage, or (2) the amount of damages
sustained, but not recovered. In no event may the
liability of the insurer under such coverage be
more than the limits of underinsured motorist
coverage provided.
(B) An insured entitled to benefits under an
uninsured motorist provision is not entitled to
benefits under an underinsured motorist provision;
and an insured entitled to benefits under an
uninsured motorist provision of the same policy
which includes the underinsured motorist provision.
(C) Regardless of the number of vehicles
involved, persons covered, claims made, number of
premiums paid, or vehicles or premiums shown on the
policy or policies under which the insured might
otherwise be entitled to benefits , in no event may
the limit of liability for underinsured motorist
coverage for two or more vehicles insured under the
same or different policies be added together,
combined with, or stacked to determine the limit of
insurance coverage available to an injured person
for any one accident.
<#PAGE> (D) If an insured is entitled to uninsured
motorist or underinsured motorist coverage under
more than one policy the maximum amount the insured
may recover may not exceed the highest limit of
such coverage provided for any one vehicle under
any one policy. If more than one policy applies:
(1) a policy covering a motor vehicle occupied by
the injured person at the time of the accident; (2)
a policy covering a motor vehicle not involved in
the accident under which the injured person is
named insured; (3) a policy covering a motor
vehicle not involved in the accident under which
the injured person is an insured other than a named
insured. Coverage available under a lower priority
policy applies only to the extent it exceeds the
coverage of a higher priority policy. The
underinsured motorist coverage does not apply to
bodily injury, sickness, or death of an insured
while occupying a motor vehicle owned by,
furnished, or available for the regular use of the
insured, a resident spouse, or resident relative,
if such motor vehicle is not described in the
policy under which a claim is made, or is not a
newly acquired or replacement vehicle covered under
the terms of the policy.
(E) Underinsured motorist <STRK>Benefits</STRK> benefits paid
pursuant to this section are <STRK>not</STRK> subject to
subrogation and assignment.
(F) No action may be brought under the
underinsured motorist provision unless copies of
the pleadings in the action establishing liability
are served in the manner provided by law upon the
insurer writing the underinsured motorist
provision. The insurer has the right to appear and
defend in the name of the underinsured motorist in
any action which may affect its liability and has
thirty days after service of process on it in which
to appear. The evidence of service upon the
insurer may not be made a part of the record. In
the event the automobile insurance insurer for the
putative at-fault insured chooses to settle in part
the claims against its insured by payment of its
applicable liability limits on behalf of its
insured, the underinsured motorist insurer may
<#PAGE>assume control of the defense of action for its own
benefit. No underinsured motorist policy may
contain a clause requiring the insurer's consent to
settlement with the at-fault party.
Insurers offering uninsured motorist coverage
must file with the commissioner no more than ninety
days after the effective date of this act revised
premium rates for this coverage to be effective on
all policies of automobile insurance containing
such coverage issued on or renewed with effective
dates on or after January 1, 1993. The revised
rate must be approved by the commissioner and
reflect a reduction in the currently approved
premium rate for this coverage of at least eighteen
percent; provided, however, that after December 31,
1993, an insurer may apply to the Chief Insurance
Commissioner for a rate adjustment for such
coverage, based on its actual experience. In the
first year following such reductions, an insurer
may apply to the Chief Insurance Commissioner for
a rate adjustment, based on its actual experience,
and include consideration of the time value of
money."
SECTION 10. Section 56-9-350 of the 1976 Code is
amended to read:
"Section 56-9-350. The operator or owner of a
motor vehicle involved in an accident resulting in
property damage of four hundred dollars or more or
in bodily injury or death<STRK>, must be furnished a
written request form at the time of the accident,
or as soon after the accident as possible, by the
investigating officer for completion and
verification of liability insurance coverage, the
form to be in a manner prescribed by the
Department.
The completed and verified form must be returned
by the operator or owner to the Department within
fifteen days from the date the form was delivered
by the officer. Failure to return the form,
verified in the proper manner, is prima facie
evidence that the vehicle was uninsured.
<#PAGE> The operator or owner of a motor vehicle
involved in an accident resulting in property
damage of four hundred dollars or more, or in
bodily injury or death, which was not investigated
by a law enforcement officer shall furnish to the
Department a written report and verification of
liability insurance coverage, the proof to be in a
manner prescribed by the Department</STRK> within fifteen
days after the accident, shall forward a written
report of the accident to the department on a form
prescribed by the department. The report must
contain information to enable the department to
determine whether the requirements for the deposit
of security under Section 56-9-351 are inapplicable
by reason of the existence of insurance or other
exceptions specified in this title. Failure to
return the form, in the proper verified manner, is
prima facie evidence that the vehicle was not
registered in compliance with this title."
SECTION 11. Section 56-10-10 of the 1976 Code is
amended to read:
"Section 56-10-10. <STRK>Every owner of a motor
vehicle required to be registered in this State
shall maintain the security required by Section
56-10-20 with respect to each such motor vehicle
owned by him throughout the period the registration
is in effect.</STRK> Security must be maintained on every
motor vehicle required to be registered in this
State where the owner or other operator not
excluded in accordance with Section 38-77-340 and
who resides in the same household meets one of the
conditions or factors specified in Section
38-73-455 for application of the objective
standards rate. Such security must be maintained
with respect to each such motor vehicle owned by
him throughout the period the registration is in
effect. No certificate of registration may be
issued or transferred to an owner by the executive
director unless the owner or prospective owner
produces satisfactory evidence that the security is
in effect, including the name of the owner's
automobile liability insurer, the name of the
<#PAGE>agent, the identification number of the insurance
policy, and the effective dates of the policy,
except in cases where other security is approved."
SECTION 12. Section 56-10-220 of the 1976 Code
is amended to read:
"Section 56-10-220. Every person required to
provide security on a motor vehicle as provided in
Section 56-10-10 applying for registration for a
motor vehicle shall at the time of such
registration and licensing declare the vehicle to
be an insured motor vehicle under the penalty set
forth in Section 56-10-260 and shall execute and
furnish to the department his certificate that such
motor vehicle is an insured motor vehicle and that
he will maintain insurance thereon during the
registration period. The certificate must be in
the form prescribed by the department. The
department may require any registered owner or any
applicant for registration and licensing of a motor
vehicle declared to be an insured motor vehicle to
submit a certificate of insurance executed by an
authorized agent or representative of an insurance
company authorized to do business in this State.
Such certificate must also be in a form prescribed
by the department."
SECTION 13. Section 56-10-240 of the 1976 Code
is amended to read:
"Section 56-10-240. If, during the period for
which it is licensed, a motor vehicle for which
security is required as provided in Section
56-10-10 is or becomes an uninsured motor vehicle,
then the vehicle owner immediately shall obtain
insurance on the vehicle or within five days after
the effective date of cancellation or expiration of
his liability insurance policy surrender the motor
vehicle license plates and registration
certificates issued for the motor vehicle. If five
working days after the last day to pay an
automobile liability insurance premium, whether it
is the premium due date or a grace period that is
<#PAGE>granted customarily or contractually a motor
vehicle is an uninsured motor vehicle, the insurer
shall give written notice, or notice by magnetic or
electronic media in a manner considered
satisfactory to the department, within ten days
after the five-day period ends, in addition to that
notice previously given in accordance with law, by
delivery under United States Post Office bulk
certified mail, return receipt requested, to the
department of the cancellation or refusal to renew
under the following circumstances:
(1) the lapse or termination of such insurance
or security occurs within three months of issuance
provided that this subsection only applies to new
policies, and not renewal or replacement policies;
or
(2) the lapse or termination occurs after three
months for a resident who fails one or more of the
objective standards prescribed in Section
38-73-455. The department may, in its discretion,
authorize insurers to utilize alternative methods
of providing notice of cancellation of or refusal
to renew to the department. The department may not
reissue registration certificates and license
plates for that vehicle until satisfactory evidence
has been filed by the owner or by the insurer who
gave the cancellation or refusal to renew notice to
the department that the vehicle is insured. Upon
receiving information to the effect that a policy
is canceled or otherwise terminated on a motor
vehicle registered in South Carolina, the
department shall suspend the license plates and
registration certificate and shall initiate action
as required within fifteen days of the notice of
cancellation to pick up the license plates and
registration certificate. A person who has had his
license plates and registration certificate
suspended by the department, but who at the time of
suspension possesses liability insurance coverage
sufficient to meet the financial responsibility
requirements as set forth in this chapter, has the
right to appeal the suspension immediately to the
Chief Insurance Commissioner. If the commissioner
determines that the person has sufficient liability
<#PAGE>insurance coverage, he shall notify the department,
and the suspension is voided immediately. The
department shall give notice by first class mail of
the cancellation or suspension of registration
privileges to the vehicle owner at his last known
address. However, when license plates are
surrendered pursuant to this section, they must be
held at the department office in the county where
the person who surrenders the plates resides.
If the vehicle owner unlawfully refuses to
surrender the suspended items as required in this
article, the department through its designated
agents or by request to a county or municipal law
enforcement agency may take possession of the
suspended license plates and registration
certificate and may not reissue the registration
until proper proof of liability insurance coverage
is provided and until the owner has paid a
reinstatement fee of two hundred dollars for the
first refusal under this section, and three hundred
dollars for each subsequent refusal. A person who
voluntarily surrenders his license plates and
registration certificate before their suspension
shall only be charged a reinstatement fee of five
dollars.
A person wilfully failing to return his motor
vehicle license plates and registration
certificates as required in this section is guilty
of a misdemeanor and, upon conviction, must be
punished as follows:
(1) for a first offense, fined not less than one
hundred dollars nor more than two hundred dollars
or imprisoned for thirty days;
(2) for a second offense, fined two hundred
dollars or imprisoned for thirty days, or both;
(3) for a third and subsequent offense,
imprisoned for not less than forty-five days nor
more than six months.
Only convictions which occurred within ten years
including and immediately preceding the date of the
last conviction constitute prior convictions within
the meaning of this section."
<#PAGE>SECTION 14. Chapter 10, Title 56 of the 1976
Code is amended by adding:
Section 56-10-510. As used in this chapter:
(1) `Conviction' includes the entry of any plea
of guilty or nolo contendere and the forfeiture of
any bail or collateral deposited to secure a
defendant's appearance.
(2) `Insured motor vehicle' is a motor vehicle
as to which (a) there is bodily injury liability
insurance and property damage liability insurance,
both in the amounts specified in Section 38-77-140,
issued by an insurer authorized to do business in
this State, (b) a bond has been given or cash or
securities delivered in lieu of the insurance, (c)
the owner has qualified as a self-insurer in
accordance with the provisions of Section 56-9-60,
or (d) the owner has at least basic personal
protection insurance as defined in Section
38-78-30(C); and
(3) `Uninsured motor vehicle' is a motor vehicle
required to be registered as to which (a) there is
no bodily injury liability insurance and property
damage liability insurance, (b) no bond has been
given or cash or securities delivered in lieu
thereof, (c) the owner has not qualified as a
self-insurer, or (d) there is no basic or added
personal protection insurance as defined in Section
38-78-30.
Section 56-10-520. In addition to any other fees
prescribed by law, every person registering and
licensing an uninsured motor vehicle, as defined in
Section 56-10-510, in this State shall pay, at the
time of registering and licensing an uninsured
motor vehicle, the sum of two hundred and fifty
dollars. Credit for payment made on a motor
vehicle subsequently transferred during the same
licensing year must be applied to any motor vehicle
<#PAGE>thereafter registered by the uninsured motorist
during the same licensing year. Every person
knowingly operating an uninsured motor vehicle
pursuant to this section shall not be deemed in
violation of Section 56-10-270.
Section 56-10-530. The department of Highways
and Public Transportation may require that a person
applying for licensing and registration of a motor
vehicle shall certify under the penalties set forth
in Section 56-10-610 whether or not each motor
vehicle is an insured motor vehicle as defined in
Section 56-10-510 or the department may in its
discretion require that a person (a) produce as
evidence of financial responsibility a certificate
on a form prescribed by the department of insurance
or self-insurance complying with the requirements
of Section 56-9-60, (b) has given bond or delivered
the cash or securities as provided in Sections
56-9-570 and 56-9-580, respectively, or (c) pay the
fee prescribed in Section 56-10-520.
Section 56-10-560. All funds collected by the
department under the provisions of this chapter
must be deposited to the credit of the State
Treasurer and monthly transferred to a special
deposit fund to be known as the `Uninsured
Motorists Fund' to be disbursed as provided in
Section 56-10-570 to 56-10-590.
Section 56-10-570. The fund is under the
supervision and control of the Chief Insurance
Commissioner and must be paid out, on warrants of
the Comptroller General issued on vouchers signed
by the commissioner or persons he designates, for
the purpose of defraying the costs of
administration of this article by the department
and for reducing the operating losses of the
Reinsurance Facility as provided in Section
56-10-580.
Section 56-10-580. The Chief Insurance
Commissioner annually, prior to September 30 of
<#PAGE>each year, shall make distribution from the fund as
follows:
(1) to the department, the amount certified by
it as its administrative costs and expenses for
this article. These payments may be made on a
quarterly basis.
(2) to the Reinsurance Facility to reduce the
operating losses of the Facility for the twelve
month period in which they are collected and to
reduce the recoupment charges prescribed in Section
38-77-1310 assessed to drivers with the safe driver
discount.
(3) to finance driver safety measures as
determined by the General Assembly, when the
recoupment fee is no longer necessary to pay for
losses incurred by the Facility as a result of the
phasing out of the Facility as provided for by
Section 38-77-1310.
Section 56-10-590. The Chief Insurance
Commissioner may promulgate regulations necessary
to implement the provisions of this chapter.
Section 56-10-600. A person who knowingly makes
a false certificate as to whether a motor vehicle
is an insured motor vehicle or gives to the
department false evidence that any motor vehicle
sought to be registered is insured is guilty of a
misdemeanor and, upon conviction, must be fined not
less than five hundred dollars or imprisoned for
ninety days. The department shall deny, for six
months, registration of any motor vehicle for which
a false certificate or false evidence is presented
to the effect that the vehicle is insured and shall
revoke, and may not thereafter reissue for six
months, the driver's license of a person making a
false certificate or offering false evidence as
specified in this section.
Section 56-10-610. This article does not repeal
any other provision contained in this title, but is
cumulative to such other provisions."
<#PAGE>SECTION 15. Section 38-77-110(A) of the 1976
Code, as last amended by Act 148 of 1989, is
further amended to read:
"(A) Automobile insurers other than insurers
designated and approved as specialized insurers by
the commissioner may not refuse to write or renew
automobile insurance policies for individual
private passenger automobiles if the risk qualifies
for the safe driver discount in Section
38-73-760(e) or small commercial risks. These
policies may not be canceled except for reasons
which had they existed or been known when the
policy was written would have rendered the risk not
an insurable risk. Every automobile insurance risk
constitutes an insurable risk unless the operator's
permit of the named insured has been revoked or
suspended and is at the time of application for
insurance so revoked or suspended. However, no
insurer is required to write or renew automobile
insurance on any risk if there exists a valid and
enforceable outstanding judgment secured by an
insurer, an agent, or licensed premium service
company on account of automobile insurance premiums
which the applicant or insured or any principal
operator who is a member of the named insured's
household has failed or refused to pay unless the
applicant or insured pays in advance the entire
premium for the full term of the policy sought to
be issued or renewed or the annual premium,
whichever is the lesser. No insurer is required to
write or renew private passenger automobile
insurance if the risk does not qualify for the safe
driver discount in Section 38-73-760(e). An
insurer is not precluded from effecting
cancellation of an automobile insurance policy,
either upon its own initiative or at the instance
of an agent or licensed premium service company,
because of the failure of any named insured or
principal operator to pay when due any automobile
insurance premium or any installment payment.
However, notice of cancellation for nonpayment of
premium notifies the person to whom the notice is
addressed that the notice is void and ineffective
<#PAGE>if payment of the full amount of the premium or
premium indebtedness, whichever is the greater, is
made to the insurer, agent, or licensed premium
service company named in the notice by the
otherwise effective date of cancellation. This
notice of cancellation is not considered
ineffective for being conditional, ambiguous, or
indefinite."
SECTION 16. Section 38-77-110(C) of the 1976
Code, as added by Act 148 of 1989, is amended to
read:
"(C) <STRK>With regard to any coverage not required
to be written by an insurer under the mandate to
write, no</STRK> No insurer may refuse to write or renew
such policy, coverage, or endorsement of automobile
insurance because of the race, color, creed,
national origin, <STRK>or</STRK> ancestry, or economic status of
anyone who seeks to become insured."
SECTION 17. Section 38-77-110 of the 1976 Code,
as last amended by Act 148 of 1989, is further
amended by adding:
"(D) An applicant denied coverage may request
the denying insurer to provide in writing the
reason or reasons for which the applicant has been
refused insurance by that insurer. An insurer must
respond in writing within ten days of the request."
SECTION 18. Chapter 77 of Title 38 of the 1976
Code is amended by adding:
Section 38-77-1310. (A) The Reinsurance
Facility is abolished effective October 1, 1992.
There is created the South Carolina Joint
Underwriting Association. The administration of
the phase out of the Facility is transferred to the
Joint Underwriting Association.
<#PAGE> (B) As of July 1, 1994, the Facility recoupment
charge must not be included in the rate or premium
charged by the insurers of private passenger
automobile insurance to drivers who qualify for the
safe driver discount. If any losses are incurred
as a result of the operation of the Facility, the
losses attributable to the Facility must be
distributed among insured drivers as provided in
subsection (C) until the commissioner determines
all of the losses have been accounted for, unless
provided otherwise.
(C) Consistent with subsection (B), the rate or
premium charged by insurers of private passenger
automobile insurance must include a recoupment
charge, which must be added to the appropriate rate
prescribed in Section 38-73-455 to compensate for
any remaining losses incurred by the Facility as a
result of its operation up to the effective date of
this article. The operating losses of the Facility
for a twelve-month period must be recouped in the
subsequent twelve-month period.
(1) Prior to December first of each year, the
governing board of the Facility shall calculate the
recoupment amount, by coverage, by dividing the net
Facility operating loss, adjusted to reflect
prudently incurred expenses, consistent with the
provisions of Section 38-73-465, and the time value
of money, by mandated coverage for the preceding
Facility accounting year, by the total number of
earned car years in South Carolina, by coverage,
for the same period of time. .368 multiplied by
the recoupment is to be borne by risks having zero
surcharge points under the Uniform Merit Plan
promulgated by the commissioner. The remainder of
the recoupment (.614 multiplied by the recoupment)
represents R in the formula P1X +2P2X +3P3X + 4P4X
+ 5P5X + 6P6X + 7P7X + 8P8X + 9P9X + 10P10X = R.
In this formula to be utilized in determining the
Facility recoupment charge:
(a) P1 is the percentage of risks which
have one surcharge point under the Uniform Merit
Rating Plan;
<#PAGE> (b) P2 is the percentage of risks which
have two surcharge points under the Uniform Merit
Rating Plan;
(c) P3 is the percentage of risks which are
subject to a surcharge of three points under the
Uniform Merit Rating Plan;
(d) P4 is the percentage of risks which are
subject to a surcharge of four points under the
Uniform Merit Rating Plan;
(e) P5 is the percentage of risks subject
to a surcharge of five points under the Uniform
Merit Rating Plan;
(f) P6 is the percentage of risks subject
to a surcharge of six points under the Uniform
Merit Rating Plan;
(g) P7 is the percentage of risks subject
to a surcharge of seven points under the Uniform
Merit Rating Plan;
(h) P8 is the percentage of risks subject
to a surcharge of eight points under the Uniform
Merit Rating Plan;
(i) P9 is the percentage of risks subject
to a surcharge of nine points under the Uniform
Merit Rating Plan;
(j) P10 or more is the percentage of risks
subject to a surcharge of ten or more points under
the Uniform Merit Rating Plan;
(k) X is the dollar amount by coverage, to
be charged all risks having one surcharge point
under the Uniform Merit Rating Plan promulgated by
the commissioner. This dollar amount, by coverage,
is the Facility recoupment charge to be added to
the base rate or objective standards rate
prescribed in Sections 38-73-455 and 38-73-457 for
all risks which have one surcharge point.
(2) The Facility recoupment charge by
coverage to be added to the base rate or objective
standards rate for all risks which have one
surcharge point under the Uniform Merit Rating Plan
is calculated by multiplying X by a factor of one.
(3) The Facility recoupment charge by
coverage to be added to the base rate or objective
standards rate for all risks which have two
surcharge points under the Uniform Merit Rating
<#PAGE>Plan is calculated by multiplying X by a factor of
two.
(4) The Facility recoupment charge by
coverage to be added to the base rate or objective
standards rate for all risks which are subject to
a surcharge of three points under the Uniform Merit
Rating Plan is calculated by multiplying X by a
factor of three.
(5) The Facility recoupment charge by
coverage to be added to the base rate or objective
standards rate for all risks which are subject to
a surcharge of four points under the Uniform Merit
Rating Plan is calculated by multiplying X by a
factor of four.
(6) The Facility recoupment charge by
coverage to be added to the base rate or objective
standards rate for all risks which are subject to
a surcharge of five points under the Uniform Merit
Rating Plan is calculated by multiplying X by a
factor of five.
(7) The Facility recoupment charge by
coverage to be added to the base rate or objective
standards rate for all risks which are subject to
a surcharge of six points under the Uniform Merit
Rating Plan is calculated by multiplying X by a
factor of six.
(8) The Facility recoupment charge by
coverage to be added to the base rate or objective
standards rate for all risks which are subject to
a surcharge of seven points under the Uniform Merit
Rating Plan is calculated by multiplying X by a
factor of seven.
(9) The Facility recoupment charge by
coverage to be added to the base rate or objective
standards rate for all risks which are subject to
a surcharge of eight points under the Uniform Merit
Rating Plan is calculated by multiplying X by a
factor of eight.
(10) The Facility recoupment charge by
coverage to be added to the base rate or objective
standards rate for all risks which are subject to
a surcharge of nine points under the Uniform Merit
Rating Plan is calculated by multiplying X by a
factor of nine.
<#PAGE> (11) The Facility recoupment charge by
coverage to be added to the base rate or objective
standards rate for all risks which are subject to
a surcharge of ten or more points under the Uniform
Merit Rating Plan is calculated by multiplying X by
a factor of ten.
(12) In determining the number of surcharge
points a risk has for the purposes of this section,
no surcharge points assigned under the Uniform
Merit Rating Plan because the principal operator of
the automobile has not been licensed in any state
for at least one year immediately preceding the
writing of the risk or as a result of a failure of
any motor vehicle equipment requirement may be
considered.
(13) This section applies to all private
passenger automobile insurance policies issued or
renewed after June 30, 1992. However, insurers
unable to comply with the provisions of this
section and renewal provisions required by law may
comply with the provisions of this section at any
time after June 30, 1992, but in no event later
than October 1, 1992.
Section 38-77-1330. As used in this article:
(1) `Association' means the South Carolina Joint
Underwriting Association established pursuant to
this article.
(2) `Net direct premiums' means gross direct
premiums written on automobile liability insurance
as computed by the Chief Insurance Commissioner
less return premiums or the unused or unabsorbed
portions of premium deposits.
Section 38-77-1340. (A) A joint underwriting
association is created consisting of all automobile
insurers licensed to write within this State
automobile insurance policies. Every such insurer
is and must remain a member of the association as
a condition of its authority to continue to
transact this kind of insurance in this State.
(B) The purpose of the association is to provide
automobile insurance on a self-supporting basis to
the fullest extent possible.
<#PAGE> Section 38-77-1350. The association has the
power on behalf of its members to make agreements
among themselves with respect to the equitable
apportionment among them of insurance which may be
afforded applicants who are in good faith entitled
to or have lost their safe driver discount, but are
unable to procure such insurance through ordinary
methods, and such insurers may agree among
themselves on the use of reasonable rate
modifications for such insurance. Such agreements
and rate modifications shall be subject to the
approval of the department.
Section 38-77-1360. (A) The department shall,
after consultation with the insurers licensed to
write automobile liability insurance in this State,
adopt a reasonable plan or plans for the equitable
apportionment among such insurers of applicants for
such insurance who are in good faith entitled to or
have lost their safe driver discount, but are
unable to, procure such insurance through ordinary
methods, and, when such plan has been adopted, all
such insurers shall subscribe thereto and shall
participate therein. Such plan or plans shall
include rules for classification of risks and rates
therefor by driver classification and territory.
Any insured placed with the plan shall be notified
of the fact that insurance coverage is being
afforded through the plan and not through the
private market, and such notification shall be
given in writing within ten days of such placement.
To assure that plan rates are made adequate to pay
claims and expenses, insurers shall develop a means
of obtaining loss and expense experience at least
annually, and the plan shall file such experience,
when available, with the department in sufficient
detail to make a determination of rate adequacy.
(B) The plan of operation shall provide for
economic, fair, and nondiscriminatory
administration and for the prompt and efficient
provision of insurance and may contain other
provisions, including, but not limited to,
preliminary assessment of all members for initial
expenses necessary to commence operations,
<#PAGE>establishment of necessary facilities, management
of the association, assessment of the members to
defray losses and expenses, commission
arrangements, reasonable and objective underwriting
standards, appointment of servicing carriers, and
procedures for determining amounts of insurance to
be provided by the association.
(C) Trend factors shall not be found to be
inappropriate if not in excess of trend factors
normally used in the development of residual market
rates by the appropriate licensed rating
organization. Each application for coverage in the
plan shall include, in boldfaced 12-point type
immediately preceding the applicant's signature,
the following statement:
`THIS INSURANCE IS BEING AFFORDED THROUGH THE
SOUTH CAROLINA JOINT UNDERWRITING ASSOCIATION AND
NOT THROUGH THE PRIVATE MARKET. PLEASE BE ADVISED
THAT COVERAGE WITH A PRIVATE INSURER MAY BE
AVAILABLE FROM ANOTHER AGENT AT A LOWER COST.
AGENT AND COMPANY LISTINGS ARE AVAILABLE IN THE
LOCAL YELLOW PAGES.'
(D) The plan of operation shall provide that any
profit achieved by the association must be added to
the reserves of the association or returned to the
policyholders as a dividend but under no
circumstances whatsoever shall any profit be paid
over to or received by an insurer either in
currency or any other benefit of any kind.
(E) Amendments to the plan of operation may be
made by the directors of the association with the
approval of the commissioner or must be made at the
direction of the commissioner after proper notice
and public hearing.
(F) The association may not write private
passenger automobile insurance with higher limits
of coverage than:
(1) two hundred fifty thousand dollars, for
bodily injury liability to one person in one
accident,
<#PAGE> (2) subject to the limit for one person, five
hundred thousand dollars because of bodily injury
to two or more persons in one accident,
(3) fifty thousand dollars because of injury
to or destruction of property of others in any one
accident,
(4) five hundred thousand dollars, combined
single limits for either or both bodily injury and
property damage,
(5) two hundred fifty thousand dollars of
added personal protection benefits or personal
protection liability limits up to the limits of the
personal protection benefits.
(G) If a driver covered by the association
maintains a driving record without a chargeable
accident or driving conviction for three
consecutive years while they are covered by the
association, the association must attempt to place
the driver with an insurer in the voluntary market.
This provision does not preclude the driver from
seeking automobile insurance coverage on the
voluntary market at any other time. If a driver
has not been able to purchase insurance on the
voluntary market after seven consecutive years of
maintaining a driving record with no chargeable
accidents or driving convictions the driver must be
placed by the association with an automobile
insurance company doing business in the voluntary
market in this State. The company must be chosen
based on its percentage of automobile insurance
business written in this State on the voluntary
market. The company may charge the driver any one
of the company's four rates according to driver
classification and territory. A driver assigned
under this provision may not be refused insurance
until the driver fails to qualify for the safe
driver discount.
Section 38-77-1370. The rates, rating plans,
rating rules, rating classifications, territories,
and policy forms applicable to insurance written by
the association and the statistical and experience
data relating thereto are subject to this chapter
<#PAGE>and to those provisions of Chapter 73 of Title 38
which are not inconsistent with this chapter.
Section 38-77-1380. The commissioner shall
obtain complete statistical data in respect to
automobile insurance losses and reparation costs as
well as all other costs or expenses which underlie
or are related to automobile insurance. The
commissioner shall promulgate any statistical plan
he considers necessary for the purpose of gathering
data referable to loss and loss adjustment expense
experience and other expense experience. When the
statistical plan is promulgated, the association
shall adopt and use it.
Section 38-77-1390. In structuring rates and
determining the profit or loss of the association
in respect to such insurance, consideration must be
given by the commissioner to all investment income
so that investment income is a part of the
ratemaking and ratesetting process.
Section 38-77-1395. No later than sixty days
after the passage of this act, the board must file
with the commissioner rates for personal protection
policies as defined by Section 38-78-30 and rates
for private passenger automobile insurance
liability coverages, uninsured motorist coverages,
and underinsured motorist coverages. All of these
rates are subject to surcharges or discounts, if
any, applicable under any approved Merit Rating
Plan, credit, or discount plan promulgated or
approved by the commissioner. The board must file:
(1) a standard rate by driver classification and
territory twenty percent less than the substandard
rate defined in (2). This rate applies to all
private passenger automobile insurance risks which
qualify for the safe driver discount and are
insured directly by or ceded to the association;
and
(2) a `substandard' rate by driver
classification and territory which applies to all
private passenger automobile insurance risks which
<#PAGE>do not qualify for the safe driver discount and are
insured directly by or ceded to the association.
These two rates must be construed so that when
the experience generated by them is combined, the
association is able to provide private passenger
automobile insurance on a self-supporting basis.
Upon the approval of these rates, they must be
utilized for all private passenger automobile
insurance risks either ceded to or insured directly
by the association. The association must submit
policy forms, rating plans, and rating rules
applicable to insurance to be written by the
association to the commissioner for his approval.
Section 38-77-1400. The premium rate charged
for coverage must be at rates established on an
actuarially sound basis, including consideration of
trends in the frequency and severity of losses and
must be calculated to be self-supporting.
Section 38-77-1410. The association may provide
a rate increase or assessment subject to the
commissioner's approval.
Section 38-77-1420. Any deficit sustained by
the association in any year must be recouped,
pursuant to the plan of operation and the rating
plan then in effect, by one or both of the
following procedures:
(1) an assessment upon the policyholders, which
may not exceed one additional annual premium at the
then current rate;
(2) a rate increase applicable prospectively.
Section 38-77-1430. After the initial year of
operation, rates, rating plans, and rating rules
and any provision for recoupment through
policyholder assessment or premium rate increase
must be based upon the association's loss and
expense experience and investment income, together
with any other information based upon this
experience and income as the commissioner considers
appropriate. The resultant premium rates must be
<#PAGE>on an actuarially sound basis and must be
calculated to be self-supporting.
If sufficient funds are not available for the
sound financial operation of the association,
pending recoupment as provided in Section
38-77-1420, all members, on a temporary basis,
shall contribute to the financial requirements of
the association in the manner provided for in
Section 38-77-1440. Any such contribution must be
reimbursed to the members following recoupment as
provided in Section 38-77-1420.
Section 38-77-1440. All insurers which are
members of the association shall participate in its
writings, expenses, and losses in the proportion
that the net direct premiums of each member,
excluding that portion of premiums attributable to
the operation of the association, written during
the preceding calendar year bear to the aggregate
net direct premiums written in this State by all
members of the association. Each insurer's
participation in the association must be determined
annually on the basis of the net direct premiums
written during the preceding calendar year, as
reported in the annual statements and other reports
filed by the insurer with the commissioner. No
member may be obligated in any one year to
reimburse the association because of its
proportionate share in the deficit from operations
of the association in that year in excess of one
percent of its surplus to policyholders and the
aggregate amount not so reimbursed must be
reallocated among the remaining members in
accordance with the method of determining
participation prescribed in this section after
excluding from the computation the total net direct
premiums of all members not sharing in the excess
deficit. If the deficit from operations allocated
to all members of the association in any calendar
year exceeds one percent of their respective
surplus to policyholders, the amount of the deficit
must be allocated to each member in accordance with
the method of determining participation prescribed
in this section.
<#PAGE> Section 38-77-1450. Every member of the
association is bound by the approved plan of
operation of the association and the rules of the
board of directors of the association.
Section 38-77-1460. (A) If the authority of an
insurer to transact automobile insurance in this
State terminates for any reason, its obligations as
a member of the association continue until all its
obligations are fulfilled and the commissioner has
so found and certified to the board of directors.
(B) If a member insurer merges into or
consolidates with another insurer authorized to
transact insurance in this State or another insurer
authorized to transact insurance in this State has
reinsured the insurer's entire automobile insurance
business in this State, both the insurer and its
successor or assuming reinsurer, as the case may
be, are liable for the insurer's obligations to the
association.
(C) Any unsatisfied net liability of any
insolvent member of the association must be assumed
by and apportioned among the remaining members in
the same manner in which assessments or gain and
loss are apportioned and the association shall
acquire and have all rights and remedies allowed by
law in behalf of the remaining members against the
estate or funds of the insolvent insurer for funds
due the association.
Section 38-77-1470. The joint underwriting
association is governed by a board of seven
directors, one of whom is appointed by the Governor
to represent the general public and four of whom
are appointed by the Governor and represent
automobile insurers who are members of the
association. Two directors, appointed by the
Governor, are agents authorized to represent
automobile insurers licensed to do business in this
State.
The approved plan of operation of the
association may make provision for combining
insurers under common ownership or management into
groups for voting, assessment, and all other
<#PAGE>purposes and may provide that not more than one of
the officers or employees of such a group may serve
as a director at any one time. The board of
directors shall elect a chairman by majority vote
and he, or his designee, must preside at all
meetings of the board.
Section 38-77-1480. Any applicant for insurance
through the association or any insurer adversely
affected, or claiming to be adversely affected, by
any ruling, action, or decision by or on behalf of
the association, may appeal to the commissioner
within thirty days after the ruling, action, or
decision.
Section 38-77-1490. The association shall file
in the office of the commissioner annually by March
first a statement containing information with
respect to its transactions, condition, operations,
and affairs during the preceding year. The
statement shall contain information prescribed by
the commissioner and must be in the form he
directs.
The commissioner, at any reasonable time, may
require the association to furnish additional
information concerning its transactions, condition,
or any matter connected therewith considered to be
material and of assistance in evaluating the scope,
operations, and experience of the association.
Section 38-77-1500. The commissioner shall make
an examination into the financial condition and
affairs of the association at least annually and
shall file a report thereon with the Commission,
the Governor, and the General Assembly. The
expenses of the examination must be paid by the
association."
SECTION 19. Section 38-73-455 of the 1976 Code, as
last amended by Act 113 of 1991, is further amended
to read:
"Section 38-73-455. (A) An automobile insurer
shall offer <STRK>two</STRK> four different rates for
<#PAGE>automobile insurance<STRK>, a base rate as defined in
Section 38-73-457 and an objective standards rate
which is twenty-five percent above the base rate</STRK>.
<STRK>Both</STRK> All of these rates are subject to all
surcharges or discounts, if any, applicable under
any approved merit rating plan, credit, or discount
plan promulgated or approved by the commissioner.
(B) No later than ninety days after the passage
of this act, insurers of automobile insurance must
file with the commissioner rates for personal
protection policies as defined by Section 38-78-30
and revised rates for all other private passenger
automobile insurance policies written by them.
Each insurer must file:
(1) a `preferred' rate by driver
classification and territory, which is a rate
less than the standard rate defined herein. This
rate applies to all private passenger automobile
insurance risks which qualify for the safe driver
discount; and
(2) a `standard' rate which must be the
approved base rate as defined in Section 38-73-457,
by driver classification and territory in effect on
July 1, 1992. This rate applies to all private
passenger automobile insurance risks which qualify
for the safe driver discount; and
(3) a `nonpreferred' rate by driver
classification and territory, which is a rate more
than the standard rate but less than the rate by
driver classification and territory for the
substandard rate and is applicable to private
passenger automobile insurance risks which do not
qualify for the safe driver discount and which do
qualify for the safe driver discount; and
(4) a `substandard' rate by driver
classification and territory, which is a rate more
than the nonpreferred rate but less than or equal
to the substandard rate by driver classification
and territory for the South Carolina Joint
Underwriting Association, as provided for in
Article 13 of Chapter 77 of Title 38, and is
applicable to private passenger automobile risks
which do not qualify for the safe driver discount
and which do qualify for the safe driver discount.
<#PAGE> (C) The commissioner must approve the rates
filed pursuant to subsection (A). If the rates are
approved, the rates shall become effective for all
policies of automobile insurance issued or renewed
with effective dates on or after January 1, 1993.
(D) Insurers may place any automobile insurance
risk at any of the four rate levels without
restriction unless provided otherwise in this
chapter. However, the Uniform Merit Rating Plan
must continue to apply to all risks written by
them.
(E) An applicant and all operators of the
insured automobile who qualify for the safe driver
discount and who reside in the same household that
have had no chargeable accidents or driving
convictions in the last seven years, and the
automobile or the automobile it replaced has been
insured for liability or personal protection
coverage for the past twelve months must be written
at the preferred rate and may not be ceded to the
Joint Underwriting Association.
(F) All policies of automobile insurance issued
or renewed with effective dates on or after January
1, 1993, that are written by automobile insurers
designated pursuant to Section 38-77-590(A), for
risks written by them through producers designated
pursuant to that same section, and all policies
ceded to the Facility by automobile insurers must
be written at the rates provided for in Section
38-77-1395. However, the Uniform Merit Rating Plan
must apply to all such risks.
(G) The Board of Directors of the association
must file rates by driver classification and
territory for both the personal protection policies
as defined by Section 38-78-30, liability
coverages, and uninsured motorist coverage.
<STRK>Applicants, or a current policyholder, seeking
automobile insurance with an insurer must be
written at the base rate, unless one of the
conditions or factors in subitems (1) through (8)
of item (A) is present.</STRK>
<STRK>(A) The named insured or any operator who is
not excluded in accordance with Section 37-77-340
and who resides in the same household or
<#PAGE>customarily operates an automobile insured under
the same policy, individually:
(1) has obtained a policy of automobile
insurance or continuation thereof through material
misrepresentation within the preceding thirty-six
months; or
(2) has had convictions for driving
violations on three or more separate occasions
within the thirty-six months immediately preceding
the effective date of coverage as reflected by the
motor vehicle record of each insured driver as
maintained by the Department of Highways and Public
Transportation; or
(3) has had two or more `chargeable'
accidents within the thirty-six months immediately
preceding the effective date of coverage. A
`chargeable' accident is defined as one resulting
in bodily injury to any person in excess of three
hundred dollars per person, death, or damage to the
property of the insured or other person in excess
of seven hundred fifty dollars. Accidents
occurring under the circumstances enumerated below
are not considered chargeable.
(a) The automobile was lawfully parked. An
automobile rolling from a parked position is not
considered as lawfully parked but is considered as
operated by the last operator.
(b) The applicant or other operator or
owner was reimbursed by or on behalf of a person
responsible for the accident or has a judgment
against this person.
(c) The automobile of an applicant or other
operator was struck in the rear by another vehicle
and the applicant or other operator has not been
convicted of a moving traffic violation in
connection with the accident.
(d) The operator of the other automobile
involved in the accident was convicted of a moving
traffic violation and the applicant or other
operator was not convicted of a moving traffic
violation in connection therewith.
(e) An automobile operated by the applicant
or other operator is damaged as a result of contact
with a `hit and run' driver, if the applicant or
<#PAGE>other operator so reports the accident to the
proper authority within twenty-four hours or, if
the person is injured, as soon as the person is
physically able to do so.
(f) Accidents involving damage by contact
with animals or fowl.
(g) Accidents involving physical damage,
limited to an caused by flying gravel, missiles, or
falling objects.
(h) Accidents occurring as a result of the
operation of any automobile in response to an
emergency if the operator at the time of the
accident was responding to a call of duty as a paid
or volunteer member of any police or fire
department, first aid squad, or any law enforcement
agency. This exception does not include an
accident occurring after the emergency situation
ceases or after the private passenger motor vehicle
ceases to be used in response to the emergency; or
(4) has had one `chargeable' accident and two
convictions for driving violations, all occurring
on separate occasions, within the thirty-six months
immediately preceding the effective date of
coverage as reflected by the motor vehicle record
of each insured driver as maintained by the
Department of Highways and Public Transportation;
or
(5) has been convicted of or forfeited bail
during the thirty-six months immediately preceding
the effective date of coverage for operating a
motor vehicle while in an intoxicated condition or
while under the influence of drugs; or
(6) has been convicted or forfeited bail
during the thirty-six months immediately preceding
the effective date for:
(a) any felony involving the use of a motor
vehicle,
(b) criminal negligence resulting in death,
homicide, or assault arising out of the operation
of a motor vehicle,
(c) leaving the scene of an accident
without stopping to report,
(d) theft or unlawful taking of a motor
vehicle,
<#PAGE> (e) operating during a period of revocation
or suspension of registration or license,
(f) Knowingly permitting an unlicensed
person to drive,
(g) reckless driving,
(h) the making of material false statements
in the application for licenses or registration,
(i) impersonating an applicant for license
or registration or procuring a license or
registration through impersonation, whether for
himself or another,
(j) filing of a false or fraudulent claim
or knowingly aiding or abetting another in the
presentation of such a claim,
(k) failure to stop a motor vehicle when
signaled by means or a siren or flashing light by
a law enforcement vehicle; or
(7) has for thirty or more consecutive days
during the twelve months immediately preceding the
effective date of coverage, owned or operated the
automobile to be insured (or if newly acquired, the
automobile it replaces) without liability coverage
in violation of the laws of this State; or
(8) has used the insured automobile as
follows or if the insured automobile is:
(a) used in carrying passengers for hire or
compensation, except that the use of an automobile
for a car pool must not be considered use of an
automobile for hire or compensation,
(b) used in the business of transportation
of flammables or explosives,
(c) used in illegal operation, or
(d) no longer principally used and garaged
within the State, but not to include students who
are operating a motor vehicle registered in this
State while attending an institution located in
another state.
(B) In the event that one or more of the
conditions or factors prescribed in items (1)
through (8) of subsection (A) exist, the motor
vehicle customarily operated by that individual
must be written at the objective standards rate.
(C)</STRK> (H) Member companies of an affiliated group
of automobile insurers may <STRK>not</STRK> utilize different
<#PAGE>filed rates for automobile insurance coverages
<STRK>which they are mandated by law to write</STRK>. For the
purpose of this section, an affiliated group of
automobile insurers includes a group of automobile
insurers under common ownership, management, or
control. <STRK>Those automobile insurers designated
pursuant to Section 38-77-590(a), for automobile
insurance risks written by them through producers
designated by the Facility governing board pursuant
to that section, shall utilize the rates or premium
charges by coverage filed and authorized for use by
the rating organization licensed by the
Commissioner pursuant to Article 11, Chapter 73 of
this title, which has the largest number of members
or subscribers for automobile insurance rates.
However, those automobile insurers designated
pursuant to Section 38-77-590(a) are not required
to use those same rates or premium charges
described in the preceding sentence for risks
written by them through their authorized agents not
appointed pursuant to Section 38-77-590.</STRK>
<STRK>(D)</STRK> (I) <STRK>An automobile insurance policy may be
endorsed at any time during the policy period to
reflect the correct rate or premium applicable by
reason of the factors or conditions described in
subsection (A) which existed prior to the
commencement of the policy period in which the
endorsement is made, regardless of whether the
factors or conditions were known or disclosed to
the insurer at the commencement of the policy
period. However, no</STRK> No policy may be endorsed
during a policy period to reflect factors or
conditions occurring during that policy period. A
policy may be endorsed during a policy period to
recognize the addition or deletion of an operator
or vehicle.
<STRK>(E) For purposes of determining the applicable
rates to be charged an insured, an automobile
insurer shall obtain and review an applicant's
motor vehicle record.</STRK>"
SECTION 20. Section 38-73-760 of the 1976 Code, as
last amended by Act 148 of 1989, is further amended
by adding:
<#PAGE> "(g) No surcharge may be assessed for the
first conviction of speeding less than twenty miles
per hour if the person convicted has no chargeable
accidents or driving convictions for the previous
thee years."
SECTION 21. Section 38-57-130 of the 1976 Code is
amended to read:
"Section 38-57-130. (1) No person may make,
issue, circulate, or cause to be made, issued, or
circulated any estimate, illustration, circular
statement misrepresenting the terms of any policy
issued or to be issued, the benefits or advantages
promised thereby, or the dividends or share of the
surplus to be received thereon.
(2) No person may make any false or misleading
statement as to the dividends or share of surplus
previously paid on similar policies.
(3) No person may pay, allow or give or offer to
pay, allow or give, directly or indirectly, as
inducement to the purchase or the renewal of an
insurance contract except for a private passenger
automobile insurance contract, any rebate or
premiums payable on the contract, any special favor
or advantage in any benefits payable thereon, or
any valuable consideration or inducement that is
not specified in the contract."
SECTION 22. Section 56-10-270 of the 1976 Code is
amended to read:
"Section 56-10-270. (a) Any person knowingly
operating an uninsured motor vehicle subject to
registration in this State or any person knowingly
allowing the operation of an uninsured motor
vehicle subject to registration in this State is
guilty of a misdemeanor and, upon conviction, must
be punished as follows:
(1) for a first offense, fined not less than
<STRK>one</STRK> two hundred dollars nor more than <STRK>two</STRK> three
hundred dollars or imprisoned for thirty days or
may be ordered to perform up to fifty public
service hours, or a combination of these, and,
<#PAGE> (2) upon conviction of a second offense, be
fined <STRK>two</STRK> three hundred dollars or imprisoned for
thirty days or perform up to one hundred public
service hours, or a combination of these, <STRK>or both,</STRK>
and
(3) for a third and subsequent offenses must
be imprisoned for not less than forty-five days nor
more than six months and be fined up to four
hundred dollars or serve up to two hundred public
service hours, or a combination of these. Only
convictions which occurred within five years
including and immediately preceding the date of the
last conviction constitute prior convictions within
the meaning of this section. An uninsured motor
vehicle includes an insured vehicle with respect to
which the operator has been excluded from coverage
pursuant to the provisions of Section 38-77-340.
(b) The department upon receipt of information
to the effect that any person has been convicted of
violating subsection (a) of this section shall
suspend the driving privilege and all license
plates and registration certificates issued in the
person's name for a period of thirty days for a
first offense, for a period of ninety days for a
second offense, and for a period of six months for
a third and each subsequent offense. <STRK>and may not
reinstate that</STRK> The person's privileges may not be
reinstated until proof of financial responsibility
has been filed.
(c) Any person whose license plates and
registration certificates which are suspended as
provided in this section, which are not suspended
for any other reason, may have them immediately
restored, if he files proof of financial
responsibility with the department."
SECTION 23. The 1976 Code is amended by adding:
"Section 38-77-116. Upon issuance of a new
private passenger automobile insurance policy, the
insurance company or agent must review with the new
applicant a list of driving offenses and the
related fine and punishment, as well as the
possible increase in the base rate, the effect of
<#PAGE>any surcharges, or the effect of the loss of the
safe driver discount. This list must be on a form
approved by the Chief Insurance Commissioner and
must accompany the policy."
SECTION 24. After September 30, 1992, the
governing board of the Joint Underwriting
Association, enacted pursuant to Article 13 of
Chapter 77 of Title 38 of the 1976 Code as
contained in this act, shall contract with one or
more insurers or business entities to serve as the
designated carrier and shall establish a procedure
for the selection of the designated carrier. In
developing this procedure, the board must establish
criteria which will assure the designated carrier's
ability to adequately provide policy-writing and
claims service. However, the board may not require
that the designated carrier be a licensed insurance
company. Designated carrier contracts must be for
a period of three years and must be awarded upon
the terms and conditions for competitive sealed
bidding as provided in Section 11-35-1520 of the
1976 Code.
If the designated carrier fails two claims
audits, including a re-audit, within the contract
term, the designated carrier is disqualified for
renewal of its contract with the Facility upon
expiration of its existing contract. Designated
carrier contracts awarded pursuant to this section
must provide that the failure of two claims audits,
including a re-audit, during the contract term
constitutes a material breach of the contract.
After July 1, 1992, the governing board of the
association may not designate any new producers.
No designated producer may receive a commission
higher than five percent on a policy ceded to the
association. Agents or producers other than
designated producers may not receive a commission
higher than five percent on a policy written
directly by the association.
SECTION 25. The 1976 Code is amended by adding:
<#PAGE> "Section 38-77-175. (A) When the operator or
owner of a motor vehicle is issued a traffic ticket
for a moving violation by a law enforcement
officer, he must be furnished a written request
form to complete to verify liability insurance
coverage. The form must be in a manner prescribed
by regulation of the Department of Highways and
Public Transportation.
(B) The completed and verified form must be
returned by the operator or owner to the department
within fifteen days from the date he receives it.
Failure to return the form verified in the proper
manner is prima facie evidence that the vehicle was
uninsured.
(C) Any fine collected for a violation of
Section 56-10-270, relating to driving uninsured,
as a result of this section must be deposited in
the treasury of the municipality or the county
employing the law enforcement officer who issued
the original ticket, if such law enforcement
officer is a municipal or county employee, or in
the general fund of the State, if the law
enforcement officer who issued the original ticket
is an employee of a state agency or department."
SECTION 26. The 1976 Code is amended by adding:
"Section 56-7-12. (A) When the operator or
owner of a motor vehicle is issued a traffic ticket
for a moving violation by a law enforcement
officer, he must be furnished a written request
form to complete to verify liability insurance
coverage. The form must be in a manner prescribed
by regulation of the Department of Highways and
Public Transportation.
(B) The completed and verified form must be
returned by the operator or owner to the department
within fifteen days from the date he receives it.
Failure to return the form verified in the proper
manner is prima facie evidence that the vehicle was
uninsured.
(C) Any fine collected for a violation of
Section 56-10-270, relating to driving uninsured,
as a result of this section must be deposited in
<#PAGE>the treasury of the municipality or the county
employing the law enforcement officer who issued
the original ticket, if such law enforcement
officer is a municipal or county employee, or in
the general fund of the State, if the law
enforcement officer who issued the original ticket
is an employee of a state agency or department."
SECTION 27. Article 5 of Chapter 77 of Title 38
of the 1976 Code is repealed.
SECTION 28. If any provision of the act or the
application thereof to any person or circumstance
is held to be unconstitutional or otherwise
invalid, the remainder of this act and the
application of such provision to other persons or
circumstances are not affected thereby, and it is
to be conclusively presumed that the legislature
would have enacted the remainder of this act
without such invalid or unconstitutional provision,
except that if Section 38-78-110 or Section
38-78-120 is found to be unconstitutional or
invalid it is to be conclusively presumed that the
legislature would not have enacted the remainder of
this act without such limitations, and the entire
act is invalid. If Section 38-78-110 is found to
be unconstitutional or invalid, personal protection
insurers have no obligation to pay personal
protection benefits with respect to accidents
occurring on or after the date of the finding of
such unconstitutionality or invalidity and, in
addition, are subrogated to all of the rights of
personal protection insureds for all previous such
benefits paid.
SECTION 29. Except as otherwise specifically
provided herein, this act takes effect upon
approval by the Governor.