Title 38, Insurance

(A) No provisions of Title 38, other than those specifically referenced in this article and regulations applicable to them, apply to a SPFC, and those provisions apply only as modified by this article. If a conflict occurs between a provision of Title 38 and a provision of this a…

(A) A SPFC, when permitted by its organizational documents, may apply to the director for a license to transact insurance or reinsurance business as authorized by this article. A SPFC only may insure or reinsure the risks of its counterparty. Notwithstanding another provision of …

(A) A SPFC may be established as a stock corporation, limited liability company, mutual, partnership, or other form of organization approved by the director. (B) The SPFC's organizational documents must limit the SPFC's authority to transact the business of insurance or reinsuran…

(A) A SPFC initially shall possess and after that maintain minimum capitalization of not less than two hundred and fifty thousand dollars. All of the minimum initial capitalization must be in cash. All other funds of the SPFC in excess of its minimum initial capitalization must b…

(A) A SPFC may insure only the risks of a counterparty. (B) A SPFC may not issue a contract for assumption of risk or indemnification of loss other than a SPFC contract. However, the SPFC may cede risks assumed through a SPFC contract to third party reinsurers through the purchas…

(A) This section and Section 38-90-485 provide a basis for the creation and use of protected cells by a SPFC as a means of accessing alternative sources of capital, lowering formation and administrative expenses, and generally making insurance securitizations more efficient. If a…

(A)(1) The creation of a protected cell does not create, with respect to that protected cell, a legal person separate from the SPFC. (2) Notwithstanding the provision of item (1), a protected cell must have its own distinct name or designation that includes the words "protected c…

(A) A SPFC may issue securities, including surplus notes and other forms of financial instruments, subject to and in accordance with applicable law, its approved plan of operation, and its organizational documents. (B) A SPFC, in connection with the issuance of securities, may en…

A SPFC may enter into swap agreements, or other forms of asset management agreements, including guaranteed investment contracts, or other transactions that have the objective of leveling timing differences in funding of up-front or ongoing transaction expenses or managing asset, …

(A) A SPFC, at any given time, may enter into and effectuate a SPFC contract with a counterparty, provided that the SPFC contract obligates the SPFC to indemnify the counterparty for losses and that contingent obligations of the SPFC under the SPFC contract are securitized throug…

Securities issued by a SPFC pursuant to an insurance securitization may not be considered to be insurance or reinsurance contracts. An investor in these securities or a holder of these securities, by sole means of this investment or holding, may not be considered to be transactin…

In fulfilling its function, the SPFC shall adhere to the following requirements and, to the extent of its powers, shall ensure that contracts obligating other parties to perform certain functions incident to its operations are substantively and materially consistent with the foll…

(A) Assets of the SPFC held in trust to secure obligations under the SPFC contract must at all times be held in: (1) cash and cash equivalents; (2) securities listed by the securities Valuation Office of the NAIC and qualifying as admitted assets under statutory accounting conven…

(A) A SPFC may not declare or pay dividends in any form to its owners other than in accordance with the insurance securitization transaction agreements, and in no extent shall the dividends decrease the capital of the SPFC below two hundred fifty thousand dollars, and, after givi…

(A) Any material change of the SPFC's plan of operation pursuant to the provisions of Section 38-90-440(E)(5), whether or not through a SPFC protected cell, shall require prior approval of the director, provided however: (1) if initially approved in the plan of operation, securit…

(A) At least once every five years, and whenever the director determines it to be prudent, the director or his designee shall visit each SPFC and thoroughly inspect and examine its affairs to ascertain its financial condition, its ability to fulfill its obligations, and whether i…

(A) At the cessation of business of a SPFC following termination or cancellation of a SPFC contract and the redemption of any related securities issued in connection with them, the authority granted by the director expires or, in the case of retiring and surviving protected cells…

(A) A SPFC shall pay to the department by March first of each year, a tax at the rate of four-tenths of one percent on the first twenty million dollars and three-tenths of one percent on each dollar after that, subject to a minimum annual tax of five thousand dollars and a maximu…

A SPFC contract meeting the provisions of this article must be granted credit for reinsurance treatment or otherwise qualifies as an asset or a reduction from liability for reinsurance ceded by a domestic insurer to a SPFC as an assuming insurer pursuant to the provisions of Sect…

(A) A captive insurance company may be: (1) incorporated as a stock insurer; (2) incorporated as a nonprofit corporation; (3) organized as a limited liability company; (4) incorporated as a mutual insurer without capital stock, the governing body of which is elected by the member…

(A) Except as otherwise modified in this section, the terms and conditions set forth in Chapters 26 and 27 of this title pertaining to administrative supervision of insurers and the rehabilitation, receiverships, and liquidation of insurers apply in full to SPFCs or each of the S…

Information submitted pursuant to the provisions of this article is confidential and may not be made public by the director or an agent or employee of the director without the prior written consent of the SPFC, except that: (1) information submitted pursuant to the provisions of …

(A) A contested case brought by a third party based on a decision of the director pursuant to this article is governed by applicable law of the State of South Carolina except that, the third party shall: (1) prove its case by a clear and convincing evidence standard; (2) demonstr…

The director may promulgate regulations necessary to effectuate the purposes of this article. Regulations promulgated pursuant to this section do not affect a SPFC insurance securitization in effect at the time of the promulgation.

(A) A captive insurance company may not be required to make an annual report except as provided in this chapter. The director has the authority to waive or grant an extension to the requirements of this section. (B)(1) A captive insurance company shall submit annually to the dire…

(A) A captive insurance company shall file annually an actuarial opinion on loss and loss adjustment expense reserves provided by an independent actuary. The actuary may not be an employee of the captive company or its affiliates. (B) A captive insurance company may discount its …

(A)(1) At least once every five years, and whenever the director determines it to be prudent, the director personally, or by a competent person appointed by the director, shall thoroughly inspect and examine each risk retention group or industrial insured insurance company to asc…

(A) The license of a captive insurance company to conduct an insurance business in this State may be suspended or revoked by the director for: (1) insolvency or impairment of capital or surplus; (2) failure to meet the requirements of Section 38-90-40; (3) refusal or failure to s…

As used in this chapter, unless the context requires otherwise: (1) "Adjuster" means an individual, other than a public adjuster, or business entity who undertakes on behalf of insurers or self-insurers to investigate, evaluate, and negotiate the resolution of the amount of a pro…

(A) An adjuster license continues on a biennial basis unless revoked, terminated, suspended, or denied renewal or reinstatement provided the fee set forth in Section 38-91-20 has been paid and the requirements for license renewal are met by August thirty-first of each odd-numbere…

(A) A licensed adjuster is subject to the provisions of the chapters that prohibit unfair trade and unfair claims practices of this title. (B) An adjuster may not permit an unlicensed employee or representative of the adjuster to conduct business for which a license is required u…

(A) The director may place on probation, revoke, suspend, or refuse to issue, renew, or reinstate an adjuster's license or may levy a fine as set forth in Section 38-2-10 for any one or more of the following causes: (1) providing incorrect, misleading, incomplete, or materially f…

Adjusters are declared to be acting as the agents for the insurer or self-insurer represented by them in the adjustment of any loss.

(A) This chapter may not be construed to prevent an executive officer of an insurer, an employee of an insurer handling claims, the duly designated attorney, or producer authorized and acting for subscribers to reciprocal insurers with respect to residential property insurance fr…

(A) An insurer or self-insurer may not knowingly refer a claim or loss for adjustment to a person purporting to be or acting as an adjuster in this State unless the person holds a license or is otherwise exempt from the licensing requirements under this chapter. (B) Before referr…

No insurer may pay to any adjuster or adjusters or to any person engaged in the adjustment of losses any fee or compensation in excess of a regular fixed salary or stipend, nor may such insurer contract to pay to any insurance adjuster or any person engaged in the business of adj…

(A) The adjuster must report to the director any administrative action taken against the adjuster in any jurisdiction or by another governmental agency within thirty days of the final disposition of the matter. This report must include a copy of the order, consent order, or other…

It is unlawful for a person to: (A) act as adjuster on a contract made other than as authorized by the laws of this State or made by an insurer who is not regularly licensed to do business in this State; or (B) adjust or aid in the adjustment, either directly or indirectly, of a …

When the director determines after investigation that there has been a violation of this title by an adjuster, upon ten days' notice, he may impose the penalties provided in Section 38-2-10.

(A) No individual may act or hold himself out as an adjuster in this State unless the individual is licensed as an adjuster or qualifies for one of the license exemptions set forth in this chapter. The director must satisfy himself that each applicant for an adjuster license is a…

The director may issue bulletins or orders or promulgate regulations as necessary or proper to carry out the purposes of this chapter.

When an individual or business entity applies for an adjuster license, he must supply the department his legal name, email address, and business mailing address and residential mailing address. The adjuster must notify the department within thirty days of any change in the inform…

(A) The following individuals are exempt from licensure as an adjuster: (1) an individual who, for portable electronics insurance, collects claim information from, or furnishes claim information to, insureds or claimants and who conducts data entry, including entering data into a…

(A) Unless denied licensure pursuant to Section 38-91-120, a nonresident person may receive a nonresident adjuster license with the same lines of authority held in the home state upon complying with the following requirements: (1) The person is currently licensed as a resident ad…

(A) Before issuing an adjuster license to an applicant pursuant to this chapter the director must find that the applicant: (1) is eligible to designate this State as his home state; (2) has not committed any act that is grounds for denial, suspension, or revocation of a license p…

(A) An individual applying for an adjuster license under this chapter must pass a written examination unless exempt pursuant to Section 38-91-80. The examination must test the knowledge of the individual concerning the duties and responsibilities of an adjuster and the insurance …