2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 21 - Insurance Holding Company Regulatory Act › Section 38-21-280. Examination; compulsory production of information.

(A) In addition to his powers relating to examinations or investigations of insurers, the director or his designee has the power to examine an insurer registered pursuant to Sections 38-21-130 through 38-21-240 and its affiliates to ascertain the financial condition of the insurer, including the enterprise risk to the insurer by the ultimate controlling party, or by an entity or combination of entities within the insurance holding company system, or by the insurance holding company system on a consolidated basis.
(B) The director or his designee may order an insurer registered under Sections 38-21-130 through 38-21-240 to produce records, books, or other information papers in the possession of the insurer or its affiliates as considered necessary to determine the legality of its conduct or compliance with this chapter.
(C) To determine the legality of its conduct or compliance with this chapter, the director or his designee may order any insurer registered under Sections 38-21-130 through 38-21-240 to produce information not in the possession of the insurer if the insurer can obtain access to such information pursuant to contractual relationships, statutory obligations, or other method. If the insurer cannot obtain the information requested by the director or his designee, the insurer shall provide the director or his designee a detailed explanation of the reason that the insurer cannot obtain the information and the identity of the holder of information. When it appears to the director or his designee that the detailed explanation is without merit, the director or his designee may require, after notice and hearing, the insurer to pay a penalty of one thousand dollars for each day's delay, or may suspend or revoke the insurer's license.
(D) The director may retain at the registered insurer's expense attorneys, actuaries, accountants, and other experts not otherwise a part of the department's staff reasonably necessary to assist in the conduct of the examination under subsection (A). A person so retained is under the direction and control of the director or his designee and must act in a purely advisory capacity.
(E) A registered insurer producing for examination records, books, and papers pursuant to this section is liable for and must pay the expense of the examination.
(F) If the insurer fails to comply with an order, the director or his designee has, in addition to powers prescribed in Section 38-21-340, the power to examine the affiliates to obtain this information. The director or his designee also shall have the power to issue subpoenas, to administer oaths, and to examine under oath any person for purposes of determining compliance with this section. Upon the failure or refusal of any person to obey a subpoena, the director or his designee may petition the Administrative Law Court, and upon proper showing, the court may enter an order compelling the witness to appear and testify or produce documentary evidence. Failure to obey the court order is punishable as contempt of court. Every person is obliged to attend as a witness at the place specified in the subpoena, when subpoenaed, anywhere in this State, and is entitled to the same fees and mileage, if claimed, as a witness commanded to appear in the Court of Common Pleas, which fees, mileage, and actual expense, if any, necessarily incurred in securing the attendance of witnesses, and their testimony, must be itemized and charged against and be paid by the company being examined.
HISTORY: Former 1976 Code Section 38-21-280 [1947 (45) 322; 1952 Code Section 37-878; 1962 Code Section 37-878] recodified as Section 38-37-280 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-29-270 [1962 Code Section 37-1425; 1971 (57) 351; 1986 Act No. 426, Section 18] recodified as Section 38-21-280 by 1987 Act No. 155, Section 1; 1993 Act No. 181, Section 584; 2015 Act No. 2 (S.342), Section 14, eff March 9, 2015.
Effect of Amendment
2015 Act No. 2, Section 14, rewrote the section.