reglab/statecodes huggingface dataset:
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 9 - Capital, Surplus, Reserves, And Other Financial Matters › Section 38-9-390. Prohibited use of information; publication of materially false or inappropriate statement.

(A) The comparison of a licensee's Total Adjusted Capital to any of its RBC Levels is a regulatory tool for corrective action. It is not intended as a means to rank licensees. Therefore, except as otherwise specifically required under the provisions of this article, the making, publishing, disseminating, circulating, or placing before the public, or, causing to be directly or indirectly made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over a radio or television station, or in another way, an advertisement, announcement, or statement containing an assertion or representation with regard to the RBC Levels of a licensee or of a component derived in the calculations by a licensee or agent engaged in the business of insurance is considered misleading and is prohibited.
(B) If a materially false or inappropriate comparison of a licensee's Total Adjusted Capital to its RBC Levels or any RBC Level is published in any written publication and the licensee is able to demonstrate with substantial proof the falsity or the inappropriateness of the statement to the director, then the licensee may publish an announcement approved by the director in that written publication solely to rebut the materially false or inappropriate statement.
HISTORY: 1996 Act No. 254, Section 2; 2014 Act No. 164 (S.908), Section 10, eff January 1, 2015.
Effect of Amendment
2014 Act No. 164, Section 10, substituted "licensee" for "insurer" throughout, and made other nonsubstantive changes.
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 9 - Capital, Surplus, Reserves, And Other Financial Matters › Section 38-9-400. Limitations on use of RBC (risk based capital) Instructions, Reports, and Plans.

RBC Instructions, RBC Reports, Adjusted RBC Reports, RBC Plans, and Revised RBC Plans are intended only for use by the director in monitoring the solvency of licensees and in monitoring the need for corrective action. They must not be used for ratemaking, considered, or introduced as evidence in a ratemaking proceeding, or used to calculate or to derive an element of an appropriate premium level or rate of return for a line of insurance that a licensee, an affiliated licensee, or a subsidiary insurer underwrites.
HISTORY: 1996 Act No. 254, Section 2; 2014 Act No. 164 (S.908), Section 11, eff January 1, 2015.
Effect of Amendment
2014 Act No. 164, Section 11, substituted "licensee" for "insurer" throughout; substituted "to derive an element" for "to derive any elements"; and made other nonsubstantive changes.
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 9 - Capital, Surplus, Reserves, And Other Financial Matters › Section 38-9-410. Other powers or duties of director or designee.

This article is supplemental to all other laws of this State. It does not preclude or limit any other powers or duties of the director or his designee.
HISTORY: 1996 Act No. 254, Section 2.
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 9 - Capital, Surplus, Reserves, And Other Financial Matters › Section 38-9-430. Exemptions from application of article.

The director may exempt from the application of this article:
(1) a domestic property and casualty insurer that:
(a) writes direct business only in this State;
(b) writes direct annual written premiums of two million dollars or less; and
(c) assumes no reinsurance in excess of five percent of its direct written premium; and
(2) a domestic health organization that:
(a) writes direct business only in this State;
(b) assumes no reinsurance in excess of five percent of direct premium written; and
(c) writes direct annual premiums of one million dollars or less.
HISTORY: 1996 Act No. 254, Section 2; 2014 Act No. 164 (S.908), Section 12, eff January 1, 2015.
Effect of Amendment
2014 Act No. 164, Section 12, rewrote the section.
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 9 - Capital, Surplus, Reserves, And Other Financial Matters › Section 38-9-440. Applicability of RBC (risk based capital) requirements to foreign insurers.

(A) A foreign licensee, upon written request by the director, must submit an RBC Report as of the end of the preceding calendar year not later than the date that an RBC Report would be required to be filed by a domestic licensee under this article or fifteen days after that request is received by the foreign licensee. In addition, a foreign licensee, upon written request by the director, must promptly submit a copy of an RBC document that has been filed with the chief insurance regulatory officer of another state.
(B) In the event of a Company Action Level Event, Regulatory Action Level Event, or Authorized Control Level Event by a foreign licensee as determined under the RBC Laws in its state of domicile or, if no RBC Laws are in force in that state, as determined under the provisions of this article, if the chief insurance regulatory officer of the state of domicile of that foreign licensee fails to require the foreign licensee to file an RBC Plan in the manner specified under that state's RBC Laws or, if no RBC statute is in force in that state, under Section 38-9-330, then the director may require the foreign licensee to file an RBC Plan. The failure of the foreign licensee to file an RBC Plan with the director is grounds for the director to order the foreign licensee to cease and desist from writing new insurance business in this State.
(C) In the event of a Mandatory Control Level Event by a foreign licensee, if no domiciliary receiver has been appointed for the foreign licensee under the rehabilitation and liquidation laws of its state of domicile, then the director may petition the circuit court pursuant to Section 38-27-910, et seq., for the liquidation of its property in this State. The occurrence of the Mandatory Control Level Event must be considered grounds for the petition.
HISTORY: 1996 Act No. 254, Section 2; 2014 Act No. 164 (S.908), Section 13, eff January 1, 2015.
Effect of Amendment
2014 Act No. 164, Section 13, substituted "licensee" for "insurer" throughout, and made other nonsubstantive changes.
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 9 - Capital, Surplus, Reserves, And Other Financial Matters › Section 38-9-450. Limitation of liability.

There is no liability on the part of, and no cause of action, shall arise against the director, his designee, the Department of Insurance, or its employees or representatives and agents for any action of any nature taken in the performance of their powers and duties under this article.
HISTORY: 1996 Act No. 254, Section 2.
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 9 - Capital, Surplus, Reserves, And Other Financial Matters › Section 38-9-460. Notification by director which may result in regulatory action.

All notices by the director which may result in regulatory action under this article must be transmitted by registered or certified mail. Those notices are effective upon the licensee's receipt.
HISTORY: 1996 Act No. 254, Section 2; 2014 Act No. 164 (S.908), Section 14, eff January 1, 2015.
Effect of Amendment
2014 Act No. 164, Section 14, substituted "licensee's" for "insurer's".
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 10 - Protected Cell Insurance Companies › Section 38-10-10. Purpose.

This chapter is adopted to provide a basis for the creation of protected cells by a domestic insurer or captive insurer as defined in Chapter 90 as one means of accessing alternative sources of capital and achieving the benefits of insurance securitization. Investors in fully funded insurance securitization transactions provide funds that are available to pay the insurer's insurance obligations or to repay the investors, or both. The creation of protected cells is intended to be a means to achieve more efficiencies in conducting insurance securitizations.
HISTORY: 2000 Act No. 238, Section 2; 2001 Act No. 58, Section 15, eff May 29, 2001.
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 10 - Protected Cell Insurance Companies › Section 38-10-60. Conservation, rehabilitation, or liquidation; amount recoverable by receiver.

(A) Notwithstanding any other provision of law or regulation, upon an order of conservation, rehabilitation, or liquidation of a protected cell company, the receiver shall deal with the protected cell company's assets and liabilities, including protected cell assets and protected cell liabilities, in accordance with the requirements set forth in this chapter.
(B) With respect to amounts recoverable under a protected cell company insurance securitization, the amount recoverable by the receiver may not be reduced or diminished as a result of the entry of an order of conservation, rehabilitation, or liquidation with respect to the protected cell company, notwithstanding any provisions to the contrary in the contracts or other documentation governing the protected cell company insurance securitization.
HISTORY: 2000 Act No. 238, Section 2.
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 10 - Protected Cell Insurance Companies › Section 38-10-70. Protected cell insurance securitization as insurance contract; investor, underwriters and officers as conducting insurance business.

A protected cell company insurance securitization may not be deemed to be an insurance or reinsurance contract. An investor in a protected cell company insurance securitization, by sole means of this investment, may not be deemed to be conducting an insurance business in this State. The underwriters or selling agents and their partners, directors, officers, members, managers, employees, agents, representatives, and advisors involved in a protected cell company insurance securitization may not be deemed to be conducting an insurance or reinsurance agency, brokerage, intermediary, advisory, or consulting business by virtue of their activities in connection with that business.
HISTORY: 2000 Act No. 238, Section 2.
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 12 - South Carolina Investments Laws › Section 38-12-10. Short title.

This chapter may be cited as the "Investments of Insurers Act".
HISTORY: 2002 Act No. 319, Section 2, eff June 3, 2002.
Editor's Note
2002 Act No. 319, Section 1, provides as follows:
"The legislative intent of this chapter is to protect the interests of the insured in this State by promoting insurer solvency and financial strength, to be accomplished through the application of investment standards that facilitate a reasonable balance of the following objectives:
"(1) preserving principal;
"(2) assuring reasonable diversification as to type of investment, issuer, and credit quality; and
"(3) allowing insurers to allocate investments in a manner consistent with principles of prudent investment management to achieve a return adequate to meeting obligations to insureds and financial strength sufficient to cover reasonably foreseeable contingencies."
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 12 - South Carolina Investments Laws › Section 38-12-20. Scope of chapter.

This chapter applies to all domestic insurers. Foreign insurers and United States branches of alien insurers transacting an insurance business in this State shall maintain investments of the same general type and character as specified for domestic insurers, except that investments of substantially the same quality as those specified in this chapter, authorized by the law of the insurer's state of domicile, or state of entry if an alien insurer, may be recognized as eligible investments for purposes of this chapter by the director or his designee in the sound exercise of his discretion. This chapter does not apply to separate accounts of an insurer except to the extent provided by Chapter 67 of this title.
HISTORY: 2002 Act No. 319, Section 2, eff June 3, 2002.
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 12 - South Carolina Investments Laws › Section 38-12-50. Board of director responsibilities; adoption of written investment plan; review of portfolio; records of authorizations.

(A) Within three months after the effective date of this chapter, the board of directors of an insurer shall adopt a written plan for acquiring and holding investments and for engaging in investment practices that specifies guidelines as to the quality, maturity, and diversification of investments and other specifications including investment strategies intended to assure that the investments and investment practices are appropriate for the business conducted by the insurer, its liquidity needs and its capital and surplus. The board shall review and assess the insurer's technical investment and administrative capabilities and expertise before adopting a written plan concerning an investment strategy or investment practice.
(B) Investments acquired and held and investment practices engaged in pursuant to this chapter must be acquired and held under the supervision and direction of the board of directors of the insurer or a committee of the board charged with the responsibility to direct its investments. The board of directors or a committee of the board charged with the responsibility to direct its investments shall evidence by formal resolution, at least annually, that it has determined whether all investments have been made in accordance with delegations, standards, limitations, and investment objectives prescribed by the board or a committee of the board charged with the responsibility to direct its investments.
(C) On not less than a quarterly basis, and more often if considered appropriate, the board of directors or committee of the board of directors of an insurer shall:
(1) receive and review a summary report on the insurer's investment portfolio, its investment activities, and investment practices engaged in pursuant to delegated authority so as to determine whether the investment activity of the insurer is consistent with its written plan; and
(2) review and revise, as appropriate, the written plan.
(D) In discharging its duties pursuant to this section, the board of directors shall require that records of authorizations or approvals, other documentation as the board may require, and reports of action taken pursuant to authority delegated under the plan referred to in subsection (A) must be made available on a regular basis to the board of directors.
(E) The directors of an insurer shall perform their duties pursuant to this section in good faith and with that degree of care that ordinarily prudent individuals in like positions would use under similar circumstances.
(F) If an insurer does not have a board of directors, all references to the board of directors in this chapter are considered to be references to the governing body of the insurer having authority equivalent to that of a board of directors.
HISTORY: 2002 Act No. 319, Section 2, eff June 3, 2002.
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 12 - South Carolina Investments Laws › Section 38-12-60. Prohibited actions of insurer.

(A) An insurer, directly or indirectly, may not:
(1) invest in an obligation or security or make a guarantee for the benefit of or in favor of an officer or director of the insurer, except as provided in Section 38-12-70;
(2) invest in an obligation or security, make a guarantee for the benefit of or in favor of, or make other investments in a business entity of which ten percent or more of the voting securities or equity interests are owned directly or indirectly by or for the benefit of one or more officers or directors of the insurer, except as authorized in Chapter 21 of this title or as provided in Section 38-12-70;
(3) engage on its own behalf or through one or more affiliates in a transaction or series of transactions designed to evade the prohibitions of this chapter;
(4) invest in a partnership as a general partner, except that an insurer may make an investment as a general partner:
(a) if all other partners in the partnership are subsidiaries or other insurance company affiliates of the insurer;
(b) for the purpose of:
(i) meeting cash calls committed to before the effective date of this chapter;
(ii) completing those specific projects or activities of the partnership in which the insurer was a general partner as of the effective date of this chapter that had been undertaken as of that date; or
(iii) making capital improvements to property owned by the partnership on the effective date of this chapter if the insurer was a general partner as of that date; or
(c) in accordance with Section 38-12-40(C); or
(5) invest in or lend its funds upon the security of shares of its own stock, except as authorized by other provisions of this title, except that those shares must not be admitted assets of the insurer.
(B) This section does not prohibit a subsidiary or other affiliate of the insurer from becoming a general partner.
HISTORY: 2002 Act No. 319, Section 2, eff June 3, 2002.
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 12 - South Carolina Investments Laws › Section 38-12-80. Asset valuation.

For purposes of this chapter, the value or amount of an investment acquired or held, or an investment practice engaged in pursuant to this chapter, unless otherwise specified in this title, must be the value at which assets of an insurer are required to be reported for statutory accounting purposes as determined in accordance with procedures prescribed in published accounting and valuation standards of the NAIC.
HISTORY: 2002 Act No. 319, Section 2, eff June 3, 2002.
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 12 - South Carolina Investments Laws › Section 38-12-210. Scope of article.

This article applies to the investments and investment practices of life and health insurers, and other companies whose investments and investment practices are regulated as if they were life and health insurers under this title, subject to the provisions of Section 38-12-20.
HISTORY: 2002 Act No. 319, Section 2, eff June 3, 2002.
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 12 - South Carolina Investments Laws › Section 38-12-250. Equity interests in domestic business entities; percentage of assets limitation; short sales.

(A) Subject to the limitations of Section 38-12-220, an insurer may acquire directly, or through an investment affiliate, equity interests in business entities organized pursuant to the laws of any domestic jurisdiction.
(B) An insurer may not acquire directly, or through an investment affiliate, an investment pursuant to this section if as a result of and after giving effect to the investment the aggregate amount of investments then held by the insurer pursuant to this section exceeds twenty percent of its admitted assets, or, except for mutual funds, the amount of equity interests then held by the insurer that are not listed on a qualified exchange exceeds five percent of its admitted assets. An accident and health insurer is not subject to this section but is subject to the same aggregate limitation on equity interests as a property and casualty insurer pursuant to Section 38-12-460 and also to the provisions of Section 38-12-420.
(C) An insurer may not acquire pursuant to this section investments that the insurer may acquire pursuant to Section 38-12-270 or pursuant to Chapter 21 of this title.
(D) An insurer may not short sell an equity interest unless the insurer covers the short sale by owning the equity interest or an unrestricted right to the equity interest exercisable within six months of the short sale.
HISTORY: 2002 Act No. 319, Section 2, eff June 3, 2002.
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 12 - South Carolina Investments Laws › Section 38-12-260. Tangible personal property; valuation; limitations.

(A)(1) Subject to the limitations of Section 38-12-220, an insurer may acquire tangible personal property or equity interests in tangible personal property, located or used wholly or in part within a domestic jurisdiction, directly or indirectly through:
(a) limited partnership interests or general partnership interests not otherwise prohibited by Section 38-12-60(A)(4);
(b) joint ventures;
(c) stock of an investment affiliate;
(d) membership interests in a limited liability company;
(e) trust certificates; or
(f) other similar instruments.
(2) Investments acquired pursuant to item (1) are eligible only if:
(a) the property is subject to a lease or other agreement with a person whose rated credit instruments in the amount of the purchase price of the personal property the insurer could then acquire pursuant to Section 38-12-230; and
(b) the lease or other agreement provides the insurer the right to receive rental, purchase, or other fixed payments for the use or purchase of the property, and the aggregate value of the payments, together with the estimated residual value of the property at the end of its useful life and the estimated tax benefits to the insurer resulting from ownership of the property, are adequate to return the cost of the insurer's investment in the property plus a return considered adequate by the insurer.
(B) The insurer shall compute the amount of each investment pursuant to this section on the basis of the out-of-pocket purchase price and applicable related expenses paid by the insurer for the investment, net of each borrowing made to finance the purchase price and expenses to the extent the borrowing is without recourse to the insurer.
(C) An insurer may not acquire, directly or indirectly through an investment affiliate, an investment pursuant to this section if as a result of and after giving effect to the investment the aggregate amount of all investments then held by the insurer pursuant to this section exceeds:
(1) two percent of its admitted assets; or
(2) one-half of one percent of its admitted assets as to a single item of tangible personal property.
(D) For purposes of determining compliance with the limitations of Section 38-12-220, investments acquired by an insurer pursuant to this section must be aggregated with those acquired pursuant to Section 38-12-230, and each lessee of the property pursuant to a lease referred to in this section is considered the issuer of an obligation in the amount of the investment of the insurer in the property determined as provided in subsection (B).
(E) Nothing in this section applies to tangible personal property lease arrangements between an insurer and its subsidiaries and affiliates pursuant to a cost sharing arrangement or agreement permitted pursuant to Chapter 21 of this title.
HISTORY: 2002 Act No. 319, Section 2, eff June 3, 2002.
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 12 - South Carolina Investments Laws › Section 38-12-310. Life insurer loan to policyholder.

A life insurer may lend to a policyholder on the security of the cash surrender value of the policyholder's policy a sum not exceeding the legal reserve the insurer is required to maintain on the policy.
HISTORY: 2002 Act No. 319, Section 2, eff June 3, 2002.
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 12 - South Carolina Investments Laws › Section 38-12-410. Scope of article.

This article applies to the investments and investment practices of property and casualty, financial guaranty, and mortgage guaranty insurers, subject to the provisions of Section 38-12-20.
HISTORY: 2002 Act No. 319, Section 2, eff June 3, 2002.
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 12 - South Carolina Investments Laws › Section 38-12-420. Asset and reserve requirements; notice of deficiency; notice to eliminate noncompliance.

(A) Each property and casualty, financial guaranty, mortgage guaranty, or accident and health insurer shall have and maintain investments and engage in investment practices of the classes described in Sections 38-12-430 through 38-12-520 subject to the limitations contained in those sections to the extent of policyholder obligations and minimum capital, or guaranty fund, and surplus less an amount equal to thirty percent of its surplus as regards policyholders. In no event may a property and casualty, financial guaranty, mortgage guaranty, or accident and health insurer have and maintain investments and investment practices of the types described in the immediately preceding sentence in an amount less than seventy percent of policyholder obligations and one hundred percent of the minimum required capital, or guaranty fund, and surplus. A property and casualty, financial guaranty, mortgage guaranty, or accident and health insurer may invest its assets in excess of those required pursuant to the two immediately preceding sentences at the discretion of the insurer without regard to any of the limitations contained in Sections 38-12-430 through 38-12-520.
(B) If a property and casualty, financial guaranty, mortgage guaranty, or accident and health insurer's assets and reserves do not comply with subsection (A), the insurer shall notify the director immediately of the amount by which the reserve requirements exceed the annual statement value of the qualifying assets and explain the reason for the deficiency. Within thirty days of the date of the notice, the insurer shall propose a plan of action to remedy the deficiency.
(C)(1) If the director determines that a property and casualty, financial guaranty, mortgage guaranty, or accident and health insurer is not in compliance with subsection (A), the director shall require the insurer to eliminate the noncompliance within a specified time from the date the notice of the requirement is delivered to the insurer.
(2) If an insurer fails to comply with the director's requirement described in item (1), the insurer is considered to be in hazardous financial condition, the director shall take action as authorized by law as to an insurer in hazardous financial condition.
HISTORY: 2002 Act No. 319, Section 2, eff June 3, 2002.
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 12 - South Carolina Investments Laws › Section 38-12-460. Equity interests in domestic business entities; limitations.

(A) Subject to the limitations of Section 38-12-430, an insurer may acquire directly, or through an investment affiliate, equity interests in business entities organized pursuant to the laws of any domestic jurisdiction.
(B) An insurer may not acquire directly, or through an investment affiliate, an investment pursuant to this section if as a result of and after giving effect to the investment the aggregate amount of investments then held by the insurer pursuant to this section exceeds the greater of twenty-five percent of its admitted assets, or one hundred percent of its surplus as regards policyholders.
(C) An insurer may not acquire pursuant to this section investments that the insurer may acquire pursuant to Section 38-12-480 or pursuant to Chapter 21 of this title.
(D) An insurer may not short sell an equity interest unless the insurer covers the short sale by owning the equity interest or an unrestricted right to the equity interest exercisable within six months of the short sale.
HISTORY: 2002 Act No. 319, Section 2, eff June 3, 2002.
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 12 - South Carolina Investments Laws › Section 38-12-470. Tangible personal property; valuation; limitations.

(A)(1) Subject to the limitations of Section 38-12-430, an insurer may acquire tangible personal property or equity interests in tangible personal property, located or used wholly or in part within a domestic jurisdiction, directly or indirectly through:
(a) limited partnership interests or general partnership interests not otherwise prohibited by Section 38-12-60(A)(4);
(b) joint ventures;
(c) stock of an investment affiliate;
(d) membership interests in a limited liability company;
(e) trust certificates; or
(f) other similar instruments.
(2) Investments acquired pursuant to item (1) are eligible only if:
(a) the property is subject to a lease or other agreement with a person whose rated credit instruments in the amount of the purchase price of the personal property the insurer could then acquire pursuant to Section 38-12-440; and
(b) the lease or other agreement provides the insurer the right to receive rental, purchase, or other fixed payments for the use or purchase of the property, and the aggregate value of the payments, together with the estimated residual value of the property at the end of its useful life and the estimated tax benefits to the insurer resulting from ownership of the property, are adequate to return the cost of the insurer's investment in the property plus a return considered adequate by the insurer.
(B) The insurer shall compute the amount of each investment pursuant to this section on the basis of the out-of-pocket purchase price and applicable related expenses paid by the insurer for the investment, net of each borrowing made to finance the purchase price and expenses to the extent the borrowing is without recourse to the insurer.
(C) An insurer may not acquire, directly or indirectly through an investment affiliate, an investment pursuant to this section if as a result of and after giving effect to the investment the aggregate amount of all investments then held by the insurer pursuant to this section exceeds:
(1) two percent of its admitted assets; or
(2) one-half of one percent of its admitted assets as to a single item of tangible personal property.
(D) For purposes of determining compliance with the limitations of Section 38-12-430, investments acquired by an insurer pursuant to this section must be aggregated with those acquired pursuant to Section 38-12-440, and each lessee of the property pursuant to a lease referred to in this section is considered the issuer of an obligation in the amount of the investment of the insurer in the property determined as provided in subsection (B).
(E) Nothing in this section applies to tangible personal property lease arrangements between an insurer and its subsidiaries and affiliates pursuant to a cost sharing arrangement or agreement permitted pursuant to Chapter 21 of this title.
HISTORY: 2002 Act No. 319, Section 2, eff June 3, 2002.
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 13 - Examinations, Investigations, Records, And Reports › Section 38-13-40. Examiners not to be appointed if conflict of interest exists; exceptions.

(A) No examiner may be appointed by the director if the examiner, directly or indirectly, has a conflict of interest or is affiliated with the management of or owns a pecuniary interest in a person subject to examination under Section 38-13-10. This section does not preclude automatically an examiner from being:
(1) a policyholder or claimant under an insurance policy;
(2) a grantor of a mortgage or similar instrument on the examiner's residence to a regulated entity if done under customary terms and in the ordinary course of business;
(3) an investment owner in shares of regulated diversified investment companies; or
(4) a settlor or beneficiary or a 'blind trust' into which otherwise impermissible holdings have been placed.
(B) Notwithstanding the requirements of this section, the director may retain on an individual basis qualified actuaries, certified public accountants, or other similar individuals who are practicing their professions independently, even though the persons may be employed or retained similarly by persons subject to examination under Section 38-13-10.
HISTORY: Former 1976 Code Section 38-13-40 [1947 (45) 322; 1952 Code Section 37-604; 1962 Code Section 37-604] recodified as Section 38-15-20 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-5-1270 [1947 (45) 322; 1952 Code Section 37-284; 1962 Code Section 37-284] recodified as Section 38-13-40 by 1987 Act No. 155, Section 1; 1992 Act No. 394, Section 1; 1993 Act No. 181, Section 537.
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 13 - Examinations, Investigations, Records, And Reports › Section 38-13-50. Insurer to pay cost of examination; civil action to recover costs.

The insurer shall pay the charges incurred in the examination, including the expenses of the director or his designee and the expenses and compensation of his examiners and assistants. The director or his designee promptly shall institute a civil action to recover the expenses of examination against an insurer which refuses or fails to pay.
HISTORY: Former 1976 Code Section 38-13-50 [1947 (45) 322; 1948 (45) 1734; 1949 (46) 600; 1952 Code Section 37-605; 1962 Code Section 37-605; 1966 (54) 2141; 1975 (59) 318; 1986 Act No. 429, Section 3] recodified as Section 38-15-30 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-5-1280 [1947 (45) 322; 1952 Code Section 37-285; 1962 Code Section 37-285] recodified as Section 38-13-50 by 1987 Act No. 155, Section 1; 1992 Act No. 394, Section 1; 1993 Act No. 181, Section 537.
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 13 - Examinations, Investigations, Records, And Reports › Section 38-13-60. Immunity from liability; recovery of attorney fees and costs if prevailing party.

(A) No cause of action may arise nor may liability be imposed against:
(1) the director, the director's authorized representatives or his designees, or an examiner appointed by the director for statements made or conduct performed in good faith while carrying out Sections 38-13-10 through 38-13-40;
(2) a person for communicating or delivering information or data to the director or the director's authorized representative or examiner pursuant to an examination made under Sections 38-13-10 through 38-13-40 if the communication or delivery was performed in good faith and without fraudulent intent or the intent to deceive.
(B) This section does not abrogate or modify common law or statutory privilege or immunity enjoyed by a person identified in subsection (A).
(C) A person identified in subsection (A) may receive attorney's fees and costs if he is the prevailing party in a civil cause of action for libel, slander, or another relevant tort arising out of his activities in carrying out Sections 38-13-10 through 38-13-40 and the party bringing the action was not justified substantially in doing so. For purposes of this section a proceeding is "substantially justified" if it had a reasonable basis in law or fact at the time that it was initiated.
HISTORY: Former 1976 Code Section 38-13-60 [1947 (45) 322; 1952 Code Section 37-606; 1962 Code Section 37-606] recodified as Section 38-15-40 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-5-1290 [1947 (45) 322; 1952 Code Section 37-286; 1962 Code Section 37-286] recodified as Section 38-13-60 by 1987 Act No. 155, Section 1; 1992 Act No. 394, Section 1; 1993 Act No. 181, Section 537.
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 13 - Examinations, Investigations, Records, And Reports › Section 38-13-70. Investigation of charges; liability for expenses.

Upon his own motion or upon written complaint filed by a citizen of this State that an insurer, health maintenance organization, or other person licensed or authorized to transact business in this State has violated this title, the director or his designee shall investigate the matter and, if necessary, examine under oath the president and other officers or agents of the insurer, health maintenance organization, or other person and all books, records, and papers of the insurer, health maintenance organization, or other person. The insurer, health maintenance organization, or other person and its representatives shall respond to the department's inquiries, requests for information, or investigations within seven calendar days or within a larger timeframe granted by the director or his designee. If the director or his designee finds upon substantial evidence that a complaint is justified, the insurer, health maintenance organization, or other person, in addition to the penalties imposed for violation of this title, is liable for the expenses of the investigation, and the director or his designee shall promptly present the insurer with a statement of the expenses. If the insurer, health maintenance organization, or other person refuses or neglects to pay, the director or his designee is authorized to revoke its license and to bring civil action for the collection of the expenses.
HISTORY: Former 1976 Code Section 38-13-70 [1947 (45) 322; 1952 Code Section 37-607; 1962 Code Section 37-607] recodified as Section 38-15-50 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-5-1240 [1947 (45) 322; 1952 Code Section 37-287; 1962 Code Section 37-287] recodified as Section 38-13-70 by 1987 Act No. 155, Section 1; 1993 Act No. 181, Section 537; 2018 Act No. 219 (H.4657), Section 2, eff May 18, 2018.
Effect of Amendment
2018 Act No. 219, Section 2, rewrote the section, authorizing the department to respond to motions and complaints against health maintenance organizations and persons licensed to transact the business of insurance in the State.
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 13 - Examinations, Investigations, Records, And Reports › Section 38-13-80. Annual statement as to business standing and financial condition.

(A) Every insurer must file annually with the department by March first and quarterly as required by this title, a statement showing the business standing and financial condition of the insurer on December thirty-first of the preceding year. The filing must be submitted in an electronic format acceptable to the National Association of Insurance Commissioners or in the form and detail the director, or his designee, prescribes. Upon timely written request by the chief managing agent or officer setting forth reasons why the statement cannot be filed within the time provided, the director, or his designee, may grant in writing an extension of filing time for not more than thirty days. This statement must conform substantially to the form of statement adopted by the National Association of Insurance Commissioners. Unless the director, or his designee, provides otherwise, the annual statement is to be prepared in accordance with the annual statement instructions and the Accounting Practices and Procedures Manual adopted by the National Association of Insurance Commissioners. The annual statement must be verified by at least two of its principal officers, at least one of whom prepared or supervised the preparation of the annual statement.
(B) The director or his designee may require every insurer to file quarterly reports and additional information considered necessary to enable the director or his designee to carry out his duties under this chapter. The reports and information must be furnished in the time and manner prescribed by the director or his designee.
HISTORY: Former 1976 Code Section 38-13-80 [1947 (45) 322; 1952 Code Section 37-608; 1962 Code Section 37-608] recodified as Section 38-15-60 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-5-1300 [1947 (45) 322; 1952 Code Section 37-293; 1962 Code Section 37-293; 1964 (53) 2054; 1972 (57) 2529; 1979 Act No. 25] recodified as Section 38-13-80 by 1987 Act No. 155, Section 1; 1988 Act No. 324; 1990 Act No. 367, Section 1; 1993 Act No. 181, Section 537; 2000 Act No. 312, Section 5; 2022 Act No. 195 (H.4832), Section 5, eff May 16, 2022.
Effect of Amendment
2022 Act No. 195, Section 5, rewrote (A).
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 13 - Examinations, Investigations, Records, And Reports › Section 38-13-85. Annual statement to be filed with National Association of Insurance Commissioners; immunity from liability for disseminating information; confidentiality of information.

(a) Every insurer who is authorized to write insurance in this State must file annually with the National Association of Insurance Commissioners by March first a copy of its annual statement convention blank and any quarterly statements required by this title along with any additional filings prescribed by the director, or his designee, for the preceding year in an electronic format acceptable to the National Association of Insurance Commissioners. The information filed with the National Association of Insurance Commissioners must be in the same format and scope as that required by the director, or his designee, and must include the signed jurat page and the actuarial certification. Any amendments and addenda to the annual statement filing subsequently filed with the director, or his designee, also must be filed with the National Association of Insurance Commissioners in an electronic format acceptable to the National Association of Insurance Commissioners. Foreign insurers domiciled in a state which has a law substantially similar to this subsection are considered in compliance with this subsection.
(b) In the absence of actual malice, members of the National Association of Insurance Commissioners, their authorized committees, subcommittees, and task forces, their delegates, National Association of Insurance Commissioners' employees, and all others charged with the responsibility of collecting, reviewing, analyzing, and disseminating the information developed from the filing of the annual statement convention blanks are acting as agents of the director or his designee under the authority of this section and are not subject to civil liability for libel, slander, or any other cause of action by virtue of their collection, review, and analysis or dissemination of the data and information collected from the filings required by this subsection.
(c) All financial analysis ratios and examination synopses concerning insurers submitted to the department by the National Association of Insurance Commissioners' Insurance Regulatory Information System are confidential and may not be disclosed by the department.
HISTORY: 1988 Act No. 332; 1993 Act No. 181, Section 537; 2022 Act No. 195 (H.4832), Section 6, eff May 16, 2022.
Effect of Amendment
2022 Act No. 195, Section 6, rewrote (a).
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 13 - Examinations, Investigations, Records, And Reports › Section 38-13-90. Publication of assets and liabilities.

No insurer may publish a statement of its assets and liabilities unless it shows both its assets and liabilities with equal conspicuousness. The statement shall reflect the assets and liabilities as were shown on the last annual statement or subsequent report of examination accepted by the director or his designee unless the director or his designee has given prior written approval to the publishing of a statement as of another date. Any publication purporting to show the capital of the insurer shall exhibit only the amount of capital actually paid in. An insurer or agent violating this section is subject to the penalties provided in Section 38-2-10.
HISTORY: Former 1976 Code Section 38-13-90 [1947 (45) 322; 1952 Code Section 37-609; 1962 Code Section 37-609] recodified as Section 38-15-70 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-5-1310 [1947 (45) 322; 1952 Code Section 37-289; 1958 (50) 1607; 1960 (51) 1646; 1962 Code Section 37-289] recodified as Section 38-13-90 by 1987 Act No. 155, Section 1; 1988 Act No. 374, Section 6; 1993 Act No. 181, Section 537.
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 13 - Examinations, Investigations, Records, And Reports › Section 38-13-100. Items to be included as liabilities in financial statements.

In any determination of the financial condition of an insurer, capital stock and liabilities to be charged against its assets shall include:
(1) The amount of its capital stock outstanding, if any;
(2) The amount, estimated consistent with provisions of the law and rulings of the director or his designee, necessary to pay all its unpaid losses and claims incurred on or prior to the date of statement, whether reported or unreported, together with the expenses of adjustment or settlement;
(3) With reference to life and accident and health insurance and annuity contracts:
(a) the amount of reserves on life insurance policies and annuity contracts in force, valued according to the tables of mortality, rates of interest, and methods adopted pursuant to Section 38-9-180 which are applicable,
(b) reserves for disability benefits, for both active and disabled lives,
(c) reserves for accidental death benefits, and
(d) any additional reserves which may be reasonably required by the director or his designee;
(4) With reference to insurance other than specified in the law and rulings of the director or his designee, the amount of reserves equal to the unearned portions of the gross premiums charged on policies in force, computed in accordance with the law and rulings of the director or his designee; and
(5) Taxes, expenses, and other obligations due or accrued at the date of the statement.
HISTORY: Former 1976 Code Section 38-13-100 [1947 (45) 322; 1952 Code Section 37-610; 1962 Code Section 37-610] recodified as Section 38-15-80 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-5-1320 [1958 (50) 1608; 1962 Code Section 37-289.1] recodified as Section 38-13-100 by 1987 Act No. 155, Section 1; 1993 Act No. 181, Section 537.
2023 South Carolina Code of Laws › Title 38 - Insurance › Chapter 13 - Examinations, Investigations, Records, And Reports › Section 38-13-110. Treatment of contingent debts or liabilities in financial statements.

Contingent debts or liabilities of domestic insurers must be set forth in financial statements in the following manner:
(1) in the event a contingent liability or surplus certificate liability is in the form of certain borrowings provided for under Section 38-19-610 and the borrowings are made by a domestic mutual insurer insuring properties only, then the obligation of the corporation or association must be shown as a footnote on any published financial statement of the corporation or association;
(2) in the event a contingent liability or surplus certificate liability of the corporation is in connection with a domestic mutual assessment association or other form of domestic mutual insurer having issued and in force policies containing an assessment provision for either life insurance or property insurance, then the liability must be set forth as a footnote on any published financial statement of the corporation or association;
(3) in the event that a domestic mutual insurer has outstanding or is issuing a contract that does not contain an assessment provision, then the statement of assets and liabilities shall show as a part of the liabilities the face amount of the liability, with a footnote explaining that payment of the liability must be made out of the surplus earnings of the insurer and, in the event of dissolution of the corporation or association, is a junior liability to the claims of the policyholders but a senior liability to the distribution of any remaining assets to policyholders; and
(4) in the event there is a contingent liability or a surplus certificate liability outstanding in connection with any domestic capital stock insurance corporation, the full face amount of the liability must be separately stated as a part of the surplus of the insurer and is considered to be a junior liability to policyholders' reserves and claimants' liabilities but is considered a senior liability, either in the event of dissolution or for statement purposes, to that which otherwise would be a liability to the stockholders.
HISTORY: Former 1976 Code Section 38-13-110 [1947 (45) 322; 1952 Code Section 37-611; 1962 Code Section 37-611] recodified as Section 38-15-90 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-5-1330 [1958 (50) 1611; 1962 Code Section 37-289.2] recodified as Section 38-13-110 by 1987 Act No. 155, Section 1; 1993 Act No. 181, Section 537.