South Carolina Code of Regulations
Chapter 69 - DEPARTMENT OF INSURANCE
69-64 - Exempt Commercial Policies.
69-64. Exempt Commercial Policies.
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.
HISTORY: Added by State Register Volume 27, Issue No. 6, Part 2, eff June 27, 2003.