South Carolina Code of Regulations › Chapter 69 - DEPARTMENT OF INSURANCE › Section 69-64 - Exempt Commercial Policies

Current through Register Vol. 48, No. 6, June 28, 2024
A. Purpose: The
		  purpose of this regulation is to establish the definition of "exempt commercial
		  policies" as provided by Section
		  38-1-20(40)
		  and referred to in Sections
		  38-73-340
		  and
		  38-73-520
		  and to explain the effect of the exemption.
B. Definition: "Exempt commercial policies"
		  means all policies for commercial lines, as opposed to personal lines,
		  insurance issued to commercial insureds, including all lines of commercial fire
		  and allied insurance, inland marine insurance, commercial multi-peril
		  insurance, casualty insurance including workers' compensation insurance,
		  fidelity insurance and commercial automobile insurance. Insurance related to
		  credit transactions written through financial institutions is not included
		  within the definition of "exempt commercial policies." Professional liability
		  insurance for physician and health care providers is not included within the
		  definition of "exempt commercial policies."
C. Effect of Exemption: No insurer of exempt
		  commercial policies will be required to file any classification, rate, rule, or
		  rating plan, or modifications thereof, for any exempt commercial insurance line
		  prior to its use in this State. However, loss cost filings by an advisory or
		  rating organization must still be filed for approval under Sections
		  38-73-340
		  and
		  38-73-520
		  prior to an insurer's use of the loss cost component of such filings. Rates for
		  exempt commercial policies remain subject to the provisions of Sections
		  38-73-330 and
		  38-73-430.
		  Section 37-73-910 and Section
		  38-73-920
		  are not applicable to exempt commercial policies.
In order to maintain credible data and to encourage safety in the
			 workplace, every workers' compensation insurer must continue to adhere to the
			 uniform classification system and uniform experience rating system or plan
			 developed by the nonpartisan rating bureau for workers' compensation insurance
			 under Section
			 38-73-510.
			 Workers' compensation insurers, if utilizing special rates for "exempt
			 commercial policies" in this State, are required to maintain a desk file of all
			 rates so used and to exhibit the desk file to the Department upon
			 request.
D. Exempt
		  Commercial Policy Forms: In connection with an exempt commercial policy, an
		  insurer may use any commercial insurance policy, contract, certificate or
		  endorsement, including any form or endorsement developed by an advisory
		  organization. If the form or endorsement has not been previously filed with the
		  Department by an advisory organization or by the insurer, the insurer utilizing
		  the form or endorsement must notify the Department of its use by mailing a copy
		  of the form or endorsement to the Department as soon as practicable after the
		  insurer begins using it. An insurer is required to maintain a desk file of all
		  forms or endorsements used in connection with exempt commercial policies
		  written in this State and to exhibit the desk file to the Department upon its
		  request.
Any policy, contract, certificate or endorsement for use with
			 exempt commercial policies in this State may be subsequently disapproved for
			 continued use on a prospective basis by the Director or his designee upon a
			 finding that the policy form or endorsement:
(1) does not meet the requirements of South
		  Carolina law;
(2) contains any
		  provisions which are unfair, deceptive, ambiguous, misleading or unfairly
		  discriminatory; or
(3) is solicited
		  by means of advertising communication or dissemination of information which is
		  deceptive or misleading.
If a policy form or endorsement is determined not to be in
			 compliance with the above requirements, the Director or his designee must issue
			 an order specifying in detail how a specific provision(s) of the form or
			 endorsement fails to meet the requirements and stating the date on which the
			 form or endorsement can no longer be used. The Director's findings shall not
			 affect policies in force prior to the date stated in the order. The insurer
			 must thereafter, if required by the Director, submit to the Department a new
			 policy form or endorsement, if any, replacing the discontinued form or
			 endorsement.