South Carolina Code of Regulations › Chapter 69 - DEPARTMENT OF INSURANCE › Section 69-24 - Workmen's Compensation-Dividends to Policyholders

Current through Register Vol. 48, No. 6, June 28, 2024
Section 1. Background and Purpose. It has
		  come to the attention of the South Carolina Insurance Commission that some
		  Workmen's Compensation insurers and agents may be using unfairly discriminatory
		  and other misleading practices in connection with policyholder dividend plans.
		  In order to aid the South Carolina Insurance Commission in its efforts to
		  prevent such practices and enforce the insurance laws of this state pertaining
		  to such unlawful practices, the following regulation is deemed
		  necessary.
Section 2. Rules for
		  Filing of Dividend Plans. Each insurer which intends to issue Workmen's
		  Compensation policies on a participating basis in South Carolina shall file
		  with the Chief Insurance Commissioner of South Carolina any dividend plan or
		  plans already implemented or intended to be implemented by such insurer
		  including any amendments thereto. Each such insurer shall also attach to every
		  workmen's compensation policy an endorsement thereto reading as follows:
The insured shall participate in the earnings of the company,
			 only in accordance with law and with a plan applicable to this policy which has
			 been filed with the Chief Insurance Commissioner of South Carolina, provided
			 the insured has complied with all the terms of this policy with respect to the
			 payment of premium.
Neither dividends nor any factor in their calculation may be
			 guaranteed. By purchasing this policy, the insured obtains no contractual right
			 to a dividend. Dividends are declared in the sole discretion of the governing
			 body of the insurer, in accordance with law. Any representations to the
			 contrary are false.
In lieu of an endorsement, the same or substantially similar
			 wording may be incorporated as condition 18 of the standard Workmen's
			 Compensation policy.
Section
		  3. Compliance with Insurance Laws and Regulations. Any dividend
		  plan or plans filed pursuant to this regulation may provide for a reasonable
		  classification of risks for purposes of determining dividends, but may not
		  provide for rebates of premium or unfair discrimination in favor of individuals
		  between insureds of the same class and hazard, as described in Section
		  38-55-50.
		  Specifically, any dividend plan which provides for higher rates of dividend and
		  lower rates of commission, to risks with other characteristics affecting losses
		  and expenses remaining the same, shall be deemed to be in violation of Section
		  38-55-50.
		  Any dividend plan which provides that dividends may not be paid under a policy
		  unless the policy is renewed in the same company shall be deemed to be in
		  violation of Section
		  38-57-130.
This regulation in no way modifies or extends any of the sections
			 dealing with unfair trade practices, Sections
			 38-57-20,
			 et seq., and violations shall be treated pursuant to the procedures set forth
			 in Sections
			 38-57-200
			 through
			 38-57-320
			 of the South Carolina Code of Laws of
			 1976, as amended.
Section 4. Effective Date. This regulation
		  shall take effect 120 days after it is filed with the Secretary of State except
		  that insurers may immediately upon the filing of the Regulation with the
		  Secretary of State submit such dividend plans to the Chief Insurance
		  Commissioner in accordance with this Regulation. (Based on Insurance Commission
		  designation R11-76.)