2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 75 - Property, Casualty, And Title Insurance Generally › Section 38-75-730. Restrictions on cancellation of policies and renewals; notice of cancellation; exceptions.

(a) No insurance policy or renewal thereof may be canceled by the insurer prior to the expiration of the term stated in the policy, except for one of the following reasons:
(1) nonpayment of premium;
(2) material misrepresentation of fact which, if known to the company, would have caused the company not to issue the policy;
(3) substantial change in the risk assumed, except to the extent that the insurer had notice of the risk or should reasonably have foreseen the change or contemplated the risk in writing the policy;
(4) substantial breaches of contractual duties, conditions, or warranties;
(5) loss of the insurer's reinsurance covering all or a significant portion of the particular policy insured, or where continuation of the policy would imperil the insurer's solvency or place that insurer in violation of the insurance laws of this State. Prior to cancellation for reasons permitted in this item, the insurer shall notify the director or his designee, in writing, at least sixty days prior to such cancellation and the director or his designee shall, within thirty days of such notification, approve or disapprove such action.
(b) Cancellation under subsection (a)(1) of this section is not effective unless written notice of cancellation has been delivered or mailed to the insured and the agent of record, if any, not less than ten days prior to the proposed effective date of cancellation. Cancellation under subsection (a)(2) through (5) is not effective unless written notice of cancellation has been delivered or mailed to the insured and the agent of record, if any, not less than thirty days prior to the proposed effective date of cancellation. The notice must be given or mailed to the insured and the agent at their addresses shown in the policy or, if not reflected therein, at their last known addresses. Any notice of cancellation shall state the precise reason for cancellation. Proof of mailing is sufficient proof of notice.
(c) Subsections (a) and (b) do not apply to any insurance policy which has been in effect for less than one hundred twenty days and is not a renewal of a previously existing policy. The policy may be canceled for any reason by furnishing to the insured at least thirty days' written notice of cancellation, except where the reason for cancellation is nonpayment of premium, in which case not less than ten days' written notice must be furnished. Insurers may not cancel a policy outside of the one hundred twenty-day period if they had notice of the change in risk prior to the expiration of the one hundred twenty-day underwriting period.
(d) For purposes of subsection (a)(3), substantial change in the risk assumed, if based upon changes in climatic conditions, must be based on statistical data relative to South Carolina that has been approved by the director or his designee as a basis for substantial change in the risk assumed.
(e) Cancellation of a workers' compensation insurance policy under this section is not effective unless written notice of cancellation is delivered or mailed to the South Carolina Workers' Compensation Commission, and to the insured, not less than the time frame required for notice to the insured under this section.
HISTORY: Former 1976 Code Section 38-9-830 [1986 Act No. 338] recodified as Section 38-75-730 by 1987 Act No. 155, Section 1; 1993 Act No. 181, Section 794; 2007 Act No. 78, Section 14, eff June 11, 2007, applicable to taxable years beginning after December 31, 2006; 2019 Act No. 6 (S.360), Section 9.A, eff July 1, 2019; 2021 Act No. 13 (H.3585), Section 6, eff April 12, 2021.
Effect of Amendment
2019 Act No. 6, Section 9.A, in (a), in (3), inserted "had notice of the risk or" following "except to the extent that the insurer"; and in (c), added the third sentence, prohibiting an insurer from cancelling a policy outside of the one hundred twenty-day period if they had notice of a change in risk prior to the expiration of the time period.
2021 Act No. 13, Section 6, added (e).