South Carolina Code of Regulations › Chapter 69 - DEPARTMENT OF INSURANCE › Section 69-11.1 - Regulation of Credit Insurance

Current through Register Vol. 48, No. 6, June 28, 2024
This regulation replaces Regulation Regulation 69-11 and provides
			 one comprehensive regulation for all insurance sold in connection with the
			 Consumer Finance Act or the Consumer Protection Code, as amended.
A. Background and Purpose. 1976 Code Sections
		  34-29-10
		  et seq. is known as the Consumer Finance Act and provides that accident and
		  health or property insurance sold in conjunction with consumer loans, as
		  defined in Act 988, shall be subject to rules and regulations adopted by the
		  South Carolina Insurance Commission. Such rules and regulations are contained
		  in Regulation Regulation 69-11 issued October 13, 1967. 1976 Code Title 37 is
		  known as the South Carolina Consumer Protection Code. Act 686 of 1976 amended
		  Act 1241 in many particulars, but neither Act 1241 nor Act 686 amended any of
		  the insurance or provisions of 1976 Code Sections
		  34-29-10
		  et seq., except to provide that such sections shall apply only to restricted
		  loans and restricted lenders, as defined in Act 686. It is the purpose of this
		  Regulation to replace Regulation Regulation 69-11 and provide one comprehensive
		  regulation for all insurance sold in connection with the Consumer Finance Act
		  (1976 Code Sections
		  34-29-10
		  et seq) or the Consumer Protection Code (1976 Code Title 37 as amended by Act
		  686 of 1976).
B. Definitions. For
		  the purpose of this Regulation definitions of words or phrases herein relating
		  to types of loans and other financial transactions on which insurance is
		  permitted and relating to all types of lenders and financial organizations that
		  are subject to the types of supervision or regulation as defined in the
		  Consumer Finance Act or the Consumer Protection Code, shall be those
		  definitions set forth in said Act and said Code, respectively.
C. Provisions Applicable to Restricted Loans
		  and Restricted Lenders.
(1) Forms.
(a) General: All forms of policies,
		  certificates, or other evidence of insurance used in South Carolina or covering
		  South Carolina lives, property or interests must be filed with and approved by
		  the Chief Insurance Commissioner before use in this State. Forms offered for
		  filing and approval must be submitted in duplicate and, if approved for use in
		  the State, one counterpart of each form will be marked as approved and returned
		  to the insurer affected to serve as evidence of compliance with the Act and
		  Section
		  38-61-20
		  of the 1976 Code. Filing and approval of forms as required hereunder shall be
		  deemed prima facie evidence of compliance with the provisions of the South
		  Carolina Consumer Finance Act by the insurer and the agent.
The Chief Insurance Commissioner shall disapprove any form if it
			 contains provisions which are unjust, unfair, inequitable, misleading,
			 deceptive or which encourages misrepresentation of coverage or is contrary to
			 any provision of the South Carolina Code of Laws or any rule or regulation
			 issued thereunder.
(b) Life
		  Insurance: Where the borrower pays for the cost of credit life insurance
		  written individually or under a group contract, no form will be approved unless
		  the insurer can demonstrate that the coverage provided in such form bears a
		  reasonable and bona fide relation to the hazard or risk of loss to be assumed
		  by the insurer proposing to issue such form of contract.
No form providing level term life insurance will be approved
			 unless the insurer offering such form can demonstrate to the satisfaction of
			 the Commission that the coverage provided thereunder is a lawful requirement of
			 the Act.
If individual life insurance policies do not state the reserve
			 method used by the insurer, the insurer must notify the Insurance Department of
			 its reserve method pursuant to Sections
			 38-5-60,
			 38-9-170,
			 and
			 38-9-180
			 of the 1976 Code.
(c)
		  Accident and Health Insurance: All coverages must be written on forms providing
		  for a maximum three (3) day waiting period for a covered disability with
		  benefits to be retroactive to the first day of disability.
(d) Property Insurance: Property insurance
		  must cover the property of a borrower used to secure a loan, and the amount of
		  insurance must not exceed the reasonable value of the property insured.
Single interest coverage and dual interest coverage may be
			 offered pursuant to the Act, but the borrower must have the option to purchase
			 either single interest or dual interest. If the lender does not represent an
			 insurer writing dual interest property insurance, a reasonable effort must be
			 made by the lender to obtain dual interest property insurance for the account
			 of the borrower if he requests such coverage. When a borrower specifically
			 requests dual interest coverage, he may also request a term of coverage to
			 exceed the term of the secured loan.
No insurer or agent may lawfully issue a policy or charge an
			 insurance premium to cover property securing a loan if such a property is not
			 eligible for coverage under the forms approved for use by such insurer in this
			 State.
(e) Non-Filing
		  Insurance: Non-filing insurance is authorized under the provisions of the South
		  Carolina Consumer Protection Code, and such coverage may be written on forms
		  and rates as approved by the Chief Insurance Commissioner, provided that the
		  premiums payable for such insurance in lieu of perfecting a security interest
		  do not exceed the fees and charges authorized by law.