South Carolina Code of Regulations
Chapter 69 - DEPARTMENT OF INSURANCE
Section 69-25 - Prohibition Against Decreases in Income Benefits From Group Disability Policies Due to Increases in Social Security Benefits

Section 1. Purpose. The purpose of this Regulation is to prohibit insurers from including an offset of increased social security benefits in group disability income policies. While there may be justification from a rate standpoint for permitting integration of disability income benefits and social security benefits in determining the initial disability income payment to a disabled person, there is no justification for offsetting increases in social security benefits that occur after the disability commences. When Congress increases social security benefits to disabled persons it is to provide the disabled persons with additional income regardless of any other income or insurance benefits payable to such persons. Accordingly, to permit such an offset would nullify the purpose of the social security legislation and would result in an inequity which is contrary to the expectations of the disabled insured.

Section 2. Applicability. This Regulation shall apply to all group disability income policies delivered or issued for delivery in this State after the effective date hereof; and to existing group policies on the renewal anniversary date.

Section 3. Prohibition. No group disability income policy which integrates benefits with social security benefits shall provide that the amount of any disability benefit actually being paid to the disabled person shall be reduced by changes in the level of social security benefits resulting either from changes in the social security law or due to cost of living adjustments which become effective after the first day for which disability benefits become payable.

Section 4. Effective Date. This Regulation shall take effect 120 days after it has been filed with the Secretary of State.