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A326, R407, S1131
Sponsors: Senator Thomas
Document Path: l:\council\bills\dka\3781dw08.doc
Companion/Similar bill(s): 4940
Introduced in the Senate on February 20, 2008
Introduced in the House on April 15, 2008
Last Amended on May 29, 2008
Passed by the General Assembly on June 5, 2008
Governor's Action: June 16, 2008, Signed
Summary: Insurance producers and agencies
HISTORY OF LEGISLATIVE ACTIONS
Date Body Action Description with journal page number ------------------------------------------------------------------------------- 2/20/2008 Senate Introduced and read first time SJ-8 2/20/2008 Senate Referred to Committee on Banking and Insurance SJ-8 3/12/2008 Senate Committee report: Favorable with amendment Banking and Insurance SJ-13 3/13/2008 Scrivener's error corrected 4/9/2008 Senate Committee Amendment Adopted SJ-84 4/9/2008 Senate Read second time SJ-84 4/10/2008 Senate Read third time and sent to House SJ-28 4/10/2008 Scrivener's error corrected 4/15/2008 House Introduced and read first time HJ-22 4/15/2008 House Referred to Committee on Labor, Commerce and Industry HJ-23 5/21/2008 House Committee report: Favorable with amendment Labor, Commerce and Industry HJ-5 5/27/2008 House Amended HJ-17 5/27/2008 House Read second time HJ-18 5/28/2008 House Read third time and returned to Senate with amendments HJ-20 5/29/2008 Senate House amendment amended SJ-137 5/29/2008 Senate Returned to House with amendments SJ-137 6/5/2008 House Concurred in Senate amendment and enrolled HJ-59 6/10/2008 Ratified R 407 6/16/2008 Signed By Governor 6/24/2008 Copies available 6/24/2008 Effective date 06/16/08 7/11/2008 Act No. 326
View the latest legislative information at the LPITS web site
VERSIONS OF THIS BILL
(A326, R407, S1131)
AN ACT TO AMEND SECTIONS 38-43-20, 38-43-70, BOTH AS AMENDED, 38-43-75, 38-43-80, AS AMENDED, 38-43-100, 38-43-101, BOTH AS AMENDED, 38-43-102, 38-43-106, 38-43-107, 38-43-110, 38-43-130, ALL AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, ALL RELATING TO INSURANCE PRODUCERS AND AGENCIES, SO AS TO CLARIFY LANGUAGE THAT AN EMPLOYEE OF A LICENSED PRODUCER WHO PERFORMS ONLY CLERICAL DUTIES MAY NOT SIGN AN APPLICATION FOR INSURANCE; TO PROVIDE THAT UNLESS DENIED LICENSURE A NONRESIDENT PERSON SHALL RECEIVE A NONRESIDENT PRODUCER'S LICENSE WITH THE SAME LINES OF AUTHORITY HELD IN THE PRODUCER'S HOME STATE; TO DELETE LIMITED LINE CREDIT INSURANCE AS A LINE OF INSURANCE WHICH AN INSURANCE PRODUCER MAY RECEIVE QUALIFICATION FOR A LICENSE; TO PROVIDE THAT LIMITED LINE INSURANCE INCLUDES CREDIT INSURANCE; TO PROVIDE FOR THE DEFINITION OF "BIENNIAL APPOINTMENT FEE", PROVIDE FOR THE PAYMENT OF THE FEE IF REJECTED BY A BANK, DELETE THE ADMINISTRATIVE FEE, AND AUTHORIZE PAYMENT OF FEES BY A CREDIT OR DEBIT CARD; TO REQUIRE ALL APPLICANTS FOR A PRODUCER'S LICENSE TAKE AN EXAMINATION AND DELETE THE WAIVER OR EXEMPTION FOR CERTAIN APPLICANTS; TO PROVIDE THAT A PRODUCER MAY NOT TAKE THE SAME CONTINUING EDUCATION COURSE AND CASUALTY-LICENSED INSURANCE PRODUCER COURSE FOR CONTINUING EDUCATION CREDIT MORE THAN ONE TIME IN A BIENNIAL COMPLIANCE PERIOD AND PROVIDE FOR THE NONWAIVER OF CONTINUING EDUCATION REQUIREMENTS; TO PROVIDE THAT INDIVIDUAL LICENSES CONTINUE ON A BIENNIAL BASIS ON THE LICENSEE'S MONTH OF BIRTH; AND TO REDEFINE THE ELEMENTS OF "DECIEVED OR DEALT UNJUSTLY WITH THE CITIZENS OF THE STATE"; TO AMEND SECTIONS 38-45-20, 38-45-30, BOTH AS AMENDED, AND SECTION 38-45-90, ALL RELATING TO BROKERS AND SURPLUS LINES, SO AS TO REQUIRE A PROPERTY AND CASUALTY-LICENSED INSURANCE PRODUCER TO PASS THE SOUTH CAROLINA BROKER LICENSING EXAMINATION IN ORDER TO BE LICENSED AS A BROKER AND TO PROVIDE PAYMENT OF THE BROKER'S PREMIUM TAX; BY ADDING SECTION 38-73-1097 SO AS TO PROVIDE THAT THE PROVISIONS OF SECTIONS 38-73-1095(C) AND 38-75-755 DO NOT APPLY UNDER CERTAIN CIRCUMSTANCES; AND TO REPEAL SECTION 38-43-105 RELATING TO EDUCATION REQUIREMENTS FOR LOCAL AND GENERAL PRODUCERS.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 38-43-20(A) of the 1976 Code, as last amended by Act 323 of 2002, is further amended to read:
"(A) A person may not sell, solicit, or negotiate insurance in this State for any line or lines of insurance unless the person is licensed for that line of authority in accordance with this chapter."
Nonresident producer license
SECTION 2. Section 38-43-70(A) of the 1976 Code, as last amended by Act 323 of 2002, is further amended to read:
"(A) Unless denied licensure pursuant to Section 38-43-130, a nonresident person shall receive a nonresident producer license with the same lines of authority held in the home state if the:
(1) person is currently licensed as a resident and in good standing in his home state;
(2) person has submitted the proper request for licensure and the fees have been paid as provided for in Section 38-43-80;
(3) person has submitted or transmitted to the director or his designee a certified copy of the application for licensure that the person submitted to his home state, or instead of the certified copy an original completed Uniform Application; and
(4) person's home state awards nonresident producer licenses to residents of this State on the same basis."
Insurance producer license
SECTION 3. Section 38-43-75(A) of the 1976 Code, as added by Act 323 of 2002, is amended to read:
"(A) Unless denied licensure pursuant to Section 38-43-130, persons who have met the requirements of Section 38-43-100 must be issued an insurance producer license. An insurance producer may receive qualification for a license in one or more of the following lines of insurance:
(1) life insurance coverage on human lives including benefits of endowment and annuities, and may include benefits in the event of death or dismemberment by accident and benefits for disability income;
(2) accident and health insurance coverage for sickness, bodily injury, or accidental death and may include benefits for disability income;
(3) property insurance coverage for the direct or consequential loss or damage to property of every kind;
(4) casualty insurance coverage against legal liability, including that for death, injury, or disability or damage to real or personal property;
(5) variable life and variable annuity products-insurance coverage provided under variable life insurance contracts, or variable annuities;
(6) personal lines property and casualty insurance coverage sold to individuals and families for primarily noncommercial purposes;
(7) limited line insurance;
(8) any other line of insurance permitted under state laws or regulations."
Definition, "biennial appointment fee"
SECTION 4. Section 38-43-80 of the 1976 Code, as last amended by Act 323 of 2002, is further amended to read:
"Section 38-43-80. (A) As used in this section, 'biennial appointment fee' means a fee paid by the insurer on a biennial basis by September thirtieth of an even-numbered year. If an appointment fee is not paid by December thirtieth of an even-numbered year, the appointment must be canceled.
(B)(1) Unless otherwise changed by order of the director, the following fees are applicable to producer licenses, agency licenses, and insurer appointments:
(a) individual producer license fee: twenty dollars; biennial appointment fee: forty dollars;
(b) special producer initial and biennial license and appointment fee: one hundred dollars; general producer initial and biennial appointment fee: one hundred dollars;
(c) agency license-initial and biennial license fee: forty dollars; limited lines biennial license and appointment fee: forty dollars.
(2) However, the license and appointment fee applicable to a producer of a common carrier who sells only transportation ticket policies on accident and health insurance or baggage insurance on personal effects is twenty dollars.
(C) At the time of licensure, the license fee for each applicable line of insurance must be paid in advance by the producer. The department shall promulgate regulations specifying the time and manner of payment of these fees. If payment is rejected by the bank, the producer has thirty days from the rejection date to pay the license fee. If payment is not made to the department within this period, the license must be canceled. To reinstate the license, the producer is required to pay a license fee plus any charges resulting from rejection by the bank.
(D) The fees provided for in subsection (B)(1)(a) are to be retained by the department as other funds for purposes of implementing and administering individual licensing requirements. All other license and appointment fees must be deposited into the general fund.
(E) A fee provided for in this section may be paid by credit card."
Issuance of a producer's license
SECTION 5. Section 38-43-100 of the 1976 Code, as last amended by Act 291 of 2004, is further amended to read:
"Section 38-43-100. (A) Business may not be done by the applicant except following issuance of a producer's license, and the license may not be issued until the director or his designee has determined that the applicant is qualified as an insurance producer, generally, and is particularly qualified for the line of business in which the applicant proposes to engage. The department shall promulgate regulations setting forth qualifying standards of producers as to all lines of business and shall require the producer applicant to stand a written examination. For the purpose of interstate reciprocity, the department shall identify by bulletin which limited lines insurance are approved in South Carolina and which are exempt from examination. A bank, finance company, or other company handling credit transactions operating in this State and utilizing one or more credit life or accident and health or credit property producers in a particular geographical area who are licensed without having taken the written examination is required to have readily available at least one credit life or accident and health or credit property producer to answer customers' questions concerning credit life, credit accident and health insurance, or credit property, or any combination of these.
(B) A resident individual applying for an insurance producer license shall pass an examination. The examination must test the knowledge of the individual concerning the lines of authority for which application is made, the duties and responsibilities of an insurance producer, and the insurance laws and regulations of this State. The examination required by this section must be developed and conducted under regulations prescribed by the director or his designee.
(C) The director or his designee may make arrangements, including contracting with an outside testing service, for administering licensing examinations.
(D) Each individual applying for a licensing examination shall remit a nonrefundable examination fee as required by the licensing exam administrator.
(E) An individual who fails to appear for the examination as scheduled or fails to pass the examination, shall reapply for an examination and remit all required fees and forms before being rescheduled for another examination.
(F) A person applying for a resident insurance producer license or a person applying on behalf of the applicant shall make application to the director or his designee on the Uniform Application and declare under penalty of refusal, suspension, or revocation of the license that the statements made in the application are true, correct, and complete to the best of the applicant's knowledge and belief. Before approving the application, the director or his designee shall find that the applicant:
(1) is at least eighteen years of age;
(2) is a person of good moral character and has not been convicted of a felony or any crime involving moral turpitude within the last ten years that is a ground for denial, suspension, or revocation as provided for in Section 38-43-130;
(3) has paid the fees provided for in Section 38-43-80; and
(4) has successfully passed the examination or examinations for the line or lines of insurance for which the person has applied.
(G) The individual's producer license must contain the licensee's name, address, personal identification number, the date of issuance, the line or lines of authority, and other information the director or his designee considers necessary.
(H) An agency acting as an insurance producer is required to obtain an insurance producer license. Application must be made using the Uniform Business Entity Application. Before approving the application, the director or his designee shall find that:
(1) the agency has paid the fees as prescribed by Section 38-43-80; and
(2) the agency has designated a licensed producer or other person responsible for the business entity's compliance with the insurance laws, rules, and regulations of this State.
(I) The director or his designee may require any documents reasonably necessary to verify the information contained in an application.
(J) The agency's license must contain the licensee's name, address, personal identification number, the date of issuance, and other information the director or his designee considers necessary.
(K) Each insurer that sells, solicits, or negotiates any form of credit insurance shall provide to each individual whose duties include selling, soliciting, or negotiating credit insurance, a program of instruction that has been filed with the director or his designee."
Exemption from completing examination
SECTION 6. Section 38-43-101 of the 1976 Code, as last amended by Act 291 of 2004, is further amended to read:
"Section 38-43-101. (A) An individual who applies for an insurance producer license in this State who was previously licensed for the same lines of insurance in another state is not required to complete an examination. This exemption only is available if the person is currently licensed in another state or if the application is received within ninety days of the cancellation of the applicant's previous license and if the prior state issues a certification that, at the time of cancellation, the applicant was in good standing in that state or the state's Producer Database records, maintained by the National Association of Insurance Commissioners, its affiliates or subsidiaries, indicate that the producer is or was licensed in good standing for the line of insurance requested.
(B) A person licensed as an insurance producer in another state who moves to this State shall make application within ninety days of establishing legal residence to become a resident licensee pursuant to Section 38-43-100. An examination is not required of a person to obtain any line of insurance previously held in another state. However, the director or his designee reserves the right to reciprocate standards imposed by other states and territories, or both, on this state's licensed producers.
(C) A person applying for a nonresident insurance producer license or a person applying on behalf of the applicant shall make application to the director or his designee on the Uniform Application and declare under penalty of refusal, suspension, or revocation of the license that the statements made in the application are true, correct, and complete to the best of the applicant's knowledge and belief."
Temporary insurance producer license, change for one condition
SECTION 7. Section 38-43-102(A)(2) of the 1976 Code, as added by Act 323 of 2002, is amended to read:
"(2) to a member or employee of an agency licensed as an insurance producer, upon the death or disability of an individual designated in the business entity application or the license;"
Continuing insurance education
SECTION 8. Section 38-43-106 of the 1976 Code, as last amended by Act 332 of 2006, is further amended to read:
"Section 38-43-106. (A)(1) An applicant or producer licensed to sell property and casualty insurance or to sell life, accident and health insurance, or both, or qualified for this licensure, shall complete biennially a minimum of twenty-four hours of continuing insurance education in order to be eligible for licensure for the following two years. A person who falsely represents that he or another person has met the continuing insurance education requirements of this section, after being afforded notice and an opportunity for a hearing by the Administrative Law Court, is subject to the penalties provided in Section 38-2-10.
(2) However, if a producer is licensed in both property and casualty and life, accident and health, the producer shall complete at least one-third of the twenty-four required biennial continuing insurance education hours in courses related to each of these types of licenses or qualification for licensure. Notwithstanding the provisions of this subsection or another provision of law, a maximum of eighteen credit hours earned may be carried forward to the next biennial continuing insurance education period, as long as the hours carried forward are in excess of the required minimum for a particular reporting period.
(3) However, a licensed resident producer who has obtained one of the following designations may use the credit hours earned to maintain the designation toward the fulfillment of the twenty-four hour requirement: Chartered Life Underwriter (CLU), Fellow, Life Management Institute (FLMI), Certified Financial Planner (CFP), Life Underwriter Training Council Fellow (LUTCF), Registered Health Underwriter (RHU), Registered Employee Benefit Consultant (REBC), or Chartered Financial Consultant (CHFC) for a life, accident, and health license, or Chartered Property and Casualty Underwriter (CPCU) or Certified Insurance Counselor (CIC) for a property and casualty license.
(4) A producer may repeat a continuing education course, but credit must not be given more than once for a course repeated during a biennial compliance period.
(B)(1) The director or his designee shall administer these continuing education requirements and shall approve courses of instruction which qualify for these purposes. However, the director may enter into reciprocal agreements with the insurance commissioners of other states regarding the approval of continuing education courses, sponsors, instructors, or proctors if, in his judgment, the arrangements or agreements are in the best interest of the State and if the proposed courses, sponsors, instructors, or proctors submitted meet the minimum statutory requirements of this State for approval. However, the director or his designee may not enter into or continue a reciprocal agreement unless the other state has requirements similar to this State in approving courses, sponsors, instructors, or proctors. In administering this program, the department, in its discretion, may promulgate regulations whereby producers provide to a continuing education administrator established within the Department of Insurance proof of compliance with continuing education requirements as a condition of license renewal or, in the alternative, contract with an outside service provider to provide recordkeeping services as the continuing education administrator. The costs of the continuing education administrator must be paid from the continuing insurance education fees paid by producers in the manner provided by this section, except that course approval responsibilities may not be designated to the continuing education administrator. The continuing education administrator shall compile and maintain, in conjunction with insurers and producers, records reflecting the continuing insurance education status of all licensed or qualified producers subject to the requirements of this section. The continuing education administrator shall furnish to the insurer, as specified by regulation, a report of the continuing insurance education status of all of its producers. All licensed producers shall provide evidence of their continuing insurance education status to the continuing education administrator by May first of the biennially compliance year unless granted an extension.
(2) The department may promulgate regulations prescribing the overall parameters of continuing education requirements, and these regulations expressly must authorize the director or his designee to recognize product-specific training offered by insurers. The director shall appoint an advisory committee to make recommendations with respect to courses offered for approval, but the director or his designee shall retain authority with respect to course approvals. When the advisory committee is approved, it shall meet regularly as needed, but no less than semiannually, to review new course applications. Also, the advisory committee shall review modifications of courses previously approved and review previously promulgated regulations to make recommendations regarding any need for modifications, deletions, or new regulations. In making these appointments, the director may accept nominations for qualified individuals from the Professional Insurance Agents of South Carolina; the Independent Insurance Agents of South Carolina; the South Carolina Association of Automobile Insurance Agents; the South Carolina Association of Insurance and Financial Advisers; the Association of South Carolina Life Insurance Companies; the Direct Writers Insurance Companies; insurers that are not members of any national insurance trade association; and another individual, group, or trade or professional association.
(3) A vacancy on the advisory committee must be published in newspapers of general, statewide circulation. Each advisory committee member must be appointed for a term of two years and shall serve until his successor is appointed and qualified. A vacancy must be filled for the unexpired term only.
(C) The appointment of a producer may not be renewed unless the producer has completed the mandated continuing insurance education requirements during the previous two-year accreditation period. The license of a producer who fails to comply with the provisions of this section shall lapse in accordance with the provisions of Section 38-43-110. Each insurer is responsible, biennially before renewal, for furnishing to the department certification that its producers meet the continuing insurance education requirements. Each producer is responsible for payment to the continuing education administrator a reasonable annual fee for operation of the continuing insurance education program. These fees are not refundable nor proratable and must be used to administer the provisions of this section.
(D) This section also applies to nonresident producers unless otherwise provided in this section. However, a nonresident producer who successfully satisfies continuing insurance education requirements of his home state is considered to have satisfied the requirements of this section regardless of the requirements of that other state.
(E) An insurance producer licensed for limited lines insurance is exempt from the provisions of this section.
(F) The department is authorized to promulgate regulations to implement the provisions of this section.
[Effective January 1, 2010, subsection (G) is repealed. Until January 1, 2010, this subsection reads as follows:]
(G) A licensed producer reaching the age of fifty-five, for any lines of authority for which he has a minimum of twenty years of continuous licensure, is exempt from the requirements of this section as to the line or lines which are otherwise subject to the provisions of this section. A licensed producer reaching the age of sixty for any lines of authority for which he has a minimum of twenty years of active licensure, is exempt from the requirements of this section as to the line or lines which are otherwise subject to the provisions of this section.
[Effective January 1, 2010, subsection (H) is repealed. Until January 1, 2010, this subsection reads as follows:]
(H) A licensed producer, for any lines of authority for which he has a minimum of twenty years of continuous licensure, is required biennially to complete twelve hours of continuing education. A licensed producer, for any lines of authority for which he has a minimum of twenty-five years of active licensure, is required biennially to complete twelve hours of continuing education. A licensed producer, for any lines of authority for which he has been continuously licensed for ten years and has achieved one of the following designations, is required biennially to complete twelve hours of continuing education: Chartered Life Underwriter (CLU), Fellow, Life Management Institute (FLMI), Certified Financial Planner (CFP), Registered Health Underwriter (RHU), Registered Employee Benefit Consultant (REBC), Life Underwriter Training Council Fellow (LUTCF), or Chartered Financial Consultant (CHFC) if applying for a life, accident, and health license, or Chartered Property and Casualty Underwriter (CPCU) or Certified Insurance Counselor (CIC) if applying for a Property, Casualty, Surety, and Marine license. A multi-line producer shall complete a minimum of six hours of continuing education for each line of authority. A producer who is exempt from continuing education requirements before the effective date of this section shall maintain the total exemption from continuing education requirements.
(I) All information received by the advisory committee in the course and scope of its duties must be treated as confidential and proprietary and not used or disclosed outside the requirements of the duties imposed on it by law."
Change of address
SECTION 9. Section 38-43-107 of the 1976 Code, as last amended by Act 291 of 2004, is further amended to read:
"Section 38-43-107. (A) If an individual applies for an insurance producer's license, he shall supply the department his business, mailing, and residence street address. The producer also shall notify the department within thirty days of any change in legal name or in these addresses.
(B) Failure to inform the director or his designee of a change in legal name or address within this period is a violation of this title and the producer is subject to the penalties provided in Section 38-2-10."
Term of license
SECTION 10. Section 38-43-110 of the 1976 Code, as last amended by Act 323 of 2002, is further amended to read:
"Section 38-43-110. (A) A producer's license is for an indefinite term and continues on a biennial basis on the last day of the licensee's month of birth unless revoked or suspended as long as the requirements of Section 38-43-106 are met.
(B) If the biennial appointment fee for a producer is not paid as provided in Section 38-43-80, the appointment must be canceled.
(C) A producer who allows his license to lapse for failure to comply with Section 38-43-106 may, within six months from the compliance deadline, reinstate the same license if continuing education requirements have been met by November first of the compliance period and a penalty fee set forth by regulation is paid.
(D) A licensed insurance producer who is unable to comply with license renewal procedures due to active military service or some other extenuating circumstance (e.g., a long-term medical disability) may request a waiver of those procedures. The producer also may request a waiver of any examination requirement or any other fine or sanction imposed for failure to comply with renewal procedures."
SECTION 11. Section 38-43-130(C), (D), and (E) of the 1976 Code, as last amended by Act 323 of 2002, are further amended to read:
"(C) The words 'deceived or dealt unjustly with the citizens of this State' include, but are not limited to, action or inaction by the producer as follows:
(1) providing incorrect, misleading, incomplete, or materially untrue information in the license application;
(2) violating insurance laws, or violating any regulation, subpoena, or order of the director or of another state's director or his designee;
(3) obtaining or attempting to obtain a license through misrepresentation or fraud;
(4) improperly withholding, misappropriating, or converting any monies or properties received in the course of doing insurance business;
(5) intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance;
(6) having been convicted of a felony;
(7) having admitted or been found to have committed any insurance unfair trade practice or fraud;
(8) using fraudulent, coercive, or dishonest practices, or demonstrating incompetence, untrustworthiness, or financial irresponsibility in the conduct of business in this State or elsewhere;
(9) having an insurance producer license, or its equivalent, denied, suspended, or revoked in another state, province, district, or territory;
(10) forging another's name to an application for insurance or to any document related to an insurance transaction;
(11) improperly using notes or any other reference material to complete an examination for an insurance license;
(12) knowingly accepting insurance business from an individual who is not licensed;
(13) failing to comply with an administrative or court order imposing a child support obligation; or
(14) failing to pay state income tax or comply with any administrative or court order directing payment of state income tax.
(D) If upon investigation the director or his designee finds that a producer has obtained a license by fraud or misrepresentation, he may suspend immediately the license. The director or his designee, in an order suspending a license, shall specify the period during which the suspension is to be in effect. The period may not exceed two years. A licensee whose license has been revoked or an applicant who has been refused a license by the director or his designee may not reapply for another license until a two-year period of time has lapsed from the effective date of the revocation or refusal or, if judicial review before the Administrative Law Court of the revocation or refusal is sought, after two years from the date of a final court order or decree affirming the revocation or suspension.
(E) If, after notice of a hearing before the Administrative Law Court or notice of an opportunity for hearing before the Administrative Law Court, the director or his designee finds that one or more grounds exist for the revocation or suspension of, or the refusal to issue or reissue a license, the director or his designee, in his discretion, instead of revocation, suspension, or refusal, may impose upon the producer or applicant an administrative penalty as provided in Section 38-2-10 for each offense or ground."
Requirement for license changed
SECTION 12. The first undesignated paragraph and items (2) and (5) of Section 38-45-20 of the 1976 Code, as last amended by Act 291 of 2004 and Act 73 of 2003, are further amended to read:
"A resident property and casualty-licensed insurance producer may be licensed as an insurance broker by the director or his designee if the following requirements are met:
(2) successfully passed the South Carolina broker licensing examination;
(5) payment to the department, within thirty days after March thirty-first, June thirtieth, September thirtieth, and December thirty-first each year, of a broker's premium tax of four percent upon premiums for policies of insurers not licensed in this State. In computing total premiums, return premiums on risks and dividends paid or credited to policyholders are excluded. Such credit must be refunded to the policyholder."
Broker's premium tax
SECTION 13. Section 38-45-30(6) of the 1976 Code is amended to read:
"(6) paying the department, within thirty days after March thirty-first, June thirtieth, September thirtieth, and December thirty-first each year, a broker's premium tax of four percent upon premiums for policies of insurers not licensed in this State. In computing total premiums, return premiums on risks and dividends paid or credited to policyholders are excluded. Such credit must be refunded to the policyholder."
Director may approve certain insurers to write insurance
SECTION 14. Section 38-45-90 of the 1976 Code is amended to read:
"Section 38-45-90. At the request of a licensed resident broker, the director or his designee may approve certain nonadmitted insurers as eligible surplus lines insurers to write business on risks located in this State that one or more insurers licensed in this State to write that line of business in this State have declined to write. The director or his designee may require the broker to submit, on behalf of the insurer, documents necessary to satisfy him that the insurer is licensed in his home state, that it is solvent, and that its operation is not hazardous to the policyholders. The director or his designee may require the broker or the insurer to file additional documents at any time to maintain the insurer's status as an eligible surplus lines insurer. The director or his designee may withdraw his approval at any time the insurer fails to meet any of the requirements. While the insurer maintains his status as an eligible surplus lines insurer, a duly licensed broker, under the terms of this chapter, may place business with the insurer. An insurance broker shall exercise due care in the placing of insurance. Each broker transacting business in the State during a calendar year shall file annually with the department within thirty days after December thirty-first a detailed report of this business. The report must be in the form the director or his designee prescribes. The broker's books, papers, and accounts must be open at all times to the inspection of the director or his designee."
Provisions not to apply
SECTION 15. Article 9, Chapter 73, Title 38 of the 1976 Code is amended by adding:
"Section 38-73-1097. Notwithstanding any other provision of law, the provisions of Section 38-73-1095(C) and Section 38-75-755 do not apply to an insurer who issues a single or dual interest coverage property insurance policy provided through, placed by, or obtained by the creditor, lender, finance company, financial institution, bank, mortgage company, or entity having a security interest in or mortgage on the property."
SECTION 16. Section 38-43-105 of the 1976 Code is repealed.
SECTION 17. This act takes effect upon approval by the Governor.
Ratified the 10th day of June, 2008.
Approved the 16th day of June, 2008.
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