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.
