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South CarolinaS 0220126th General Assembly (2025-2026)Senate

AN ACT TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY AMENDING SECTION 38-21-10, RELATING TO DEFINITIONS, SO AS TO DEFINE TERMS; BY AMENDING SECTION 38-21-30, RELATING TO THE AUTHORITY OF INSURERS TO INVEST IN SECURITIES OF SUBSIDIARIES, SO AS TO INCLUDE HEALTH MAINTENANCE ORGANIZATIONS; BY AMENDING SECTION 38-21-70, RELATING TO CONTENTS OF STATEMENTS, SO AS TO FURTHER EXPLAIN THE REQUIREMENTS OF REPORTING THE DESCRIPTION OF TRANSACTIONS; BY AMENDING SECTION 38-21-90, RELATING TO APPROVAL BY COMMISSIONERS OF ACQUISITION OF CONTROL, SO AS TO REQUIRE THE PERSON ACQUIRING CONTROL OF A DOMESTIC INSURER TO MAINTAIN OR RESTORE CAPITAL; BY AMENDING SECTION 38-21-160, RELATING TO INFORMATION WHICH NEED NOT BE DISCLOSED IN REGISTRATION STATEMENTS, SO AS TO DESIGNATE THAT THE DEFINITION DOES NOT APPLY FOR OTHER PURPOSES; BY AMENDING SECTION 38-21-225, RELATING TO THE ANNUAL ENTERPRISE RISK REPORT, SO AS TO IDENTIFY EXEMPTIONS FOR FILING THE GROUP CAPITAL CALCULATION AND TO REQUIRE FILING RESULTS OF THE LIQUIDITY STRESS TEST FOR SOME INSURERS; BY AMENDING SECTION 38-21-250, RELATING TO STANDARDS FOR TRANSACTIONS WITHIN INSURANCE SYSTEMS, SO AS TO OUTLINE RESPONSIBILITIES OF THE DIRECTOR, AMONG OTHER THINGS; BY AMENDING SECTION 38-21-290, RELATING TO CONFIDENTIAL INFORMATION, SO AS TO REQUIRE THE DIRECTOR TO KEEP GROUP CAPITAL CALCULATIONS, GROUP CAPITAL RATIO AND LIQUIDITY STRESS TEST RESULTS, AND SUPPORTING DISCLOSURES CONFIDENTIAL, AND TO ADD REFERENCES TO THIRD-PARTY CONSULTANTS; BY AMENDING SECTION 38-12-30, RELATING TO DEFINITIONS, SO AS TO ADD AFFILIATES AND SUBSIDIARIES TO THE DEFINITION OF "PERSON"; TO AMEND SECTION 38-12-220, RELATING TO RESTRICTIONS ON INVESTMENTS, SO AS TO INCLUDE AFFILIATES AND SUBSIDIARIES; AND BY AMENDING SECTION 38-12-430, RELATING TO ASSET LIMITATIONS FOR INSURER HOLDINGS, SO AS TO INCLUDE AFFILIATES AND SUBSIDIARIES.

Sponsored By: Ronnie W. Cromer (Republican)

Signed by Governor

Summary

Insurance Holding Company Regulatory Act

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Bill Overview

Analyzed Economic Effects

4 provisions identified: 1 benefits, 0 costs, 3 mixed.

Stricter rules for affiliate deals

Beginning May 8, 2025, a domestic insurer must give the department 30 days’ notice before large transactions with affiliates, and the director can disapprove them. For nonlife insurers, large means the lesser of 3% of admitted assets or 25% of surplus; for life insurers, 3% of assets; reinsurance is 5% of surplus; some acquisitions start at 2.5% of surplus; management, service, tax, and cost‑sharing agreements always need notice. Deals must be fair and reasonable, and records and premiums held by affiliates are the insurer’s property. The law bans splitting or sequencing deals to avoid these thresholds and can treat a 12‑month series as one plan. Affiliates that provide key services are subject to the insurer’s receivership to enforce duties, and the director may require a deposit or bond when the insurer is hazardous.

Stronger group capital and liquidity checks

The ultimate controlling person must file a yearly Group Capital Calculation, unless an exemption applies. Groups that meet liquidity test scope must file that data year’s results using the official templates. The director keeps group capital calculations, group capital ratios, liquidity stress test results, and related disclosures confidential starting May 8, 2025. The director may share them with other regulators or hired experts only under strict written confidentiality agreements. Any changes to liquidity test scope take effect on January 1 after they are adopted.

Tighter insurer investment limits and notices

Beginning May 8, 2025, insurers must count an entity together with its affiliates and subsidiaries when checking the 5% of admitted assets limit for a single counterparty. The cap looks at amounts held directly or indirectly by the insurer and its affiliates; a narrow exception for some highly rated financial guaranty insurers remains. The law adds affiliates and subsidiaries to the legal meaning of “person” for these investment rules. Insurers must tell the department within 30 days when their holding company system owns more than 10% of a company’s voting stock. It also changes how caps on subsidiary investments are measured by excluding insurance subsidiaries and HMOs from the calculation and by counting all money used to form or buy subsidiaries.

Clearer insurer deal filings and reviews

Registration statements do not treat a deal as material if it is 0.5% or less of the insurer’s admitted assets on the prior December 31. This materiality rule does not apply to group capital or liquidity filings. When a loan is the source of payment, the filer can ask to keep the lender’s name confidential. After a change of control, the director has 60 days from the notice to decide if the new controller must maintain or restore capital.

Sponsors & Cosponsors

Sponsor

  • Ronnie W. Cromer

    Republican • Senate

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 130 • No: 13

House vote • 5/1/2025

(Insurance Holding Company Regulatory Act)Passage of Bill

Yes: 87 • No: 13

Senate vote • 4/1/2025

(Insurance Holding Company Regulatory Act)2nd Reading

Yes: 43 • No: 0

Actions Timeline

  1. Act No. 17

    5/16/2025legislature

  2. Effective date 05/08/25

    5/16/2025legislature

  3. Signed By Governor

    5/8/2025Governor

  4. Ratified R 33

    5/6/2025legislature

  5. Read third time and enrolled

    5/2/2025House

  6. Unanimous consent for third reading on next legislative day

    5/1/2025House

  7. Roll call Yeas-87 Nays-13

    5/1/2025House

  8. Read second time

    5/1/2025House

  9. Committee report: Favorable Labor, Commerce and Industry

    4/30/2025House

  10. Referred to Committee on Labor, Commerce and Industry

    4/3/2025House

  11. Introduced and read first time

    4/3/2025House

  12. Scrivener's error corrected

    4/3/2025legislature

  13. Read third time and sent to House

    4/2/2025Senate

  14. Roll call Ayes-43 Nays-0

    4/1/2025Senate

  15. Read second time

    4/1/2025Senate

  16. Amended

    4/1/2025Senate

  17. Scrivener's error corrected

    3/5/2025legislature

  18. Committee report: Favorable Banking and Insurance

    3/4/2025Senate

  19. Scrivener's error corrected

    1/29/2025legislature

  20. Referred to Committee on Banking and Insurance

    1/15/2025Senate

  21. Introduced and read first time

    1/15/2025Senate

Bill Text

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