South Carolina § 38-31-170 - Termination of Association by director.

§ 38-31-170. Termination of Association by director.

(1) The director or his designee shall by order terminate the operation of the association as to any kind of insurance covered by this chapter with respect to which he has found, after hearing, that there is in effect a statutory or voluntary plan which:

(a) is a permanent plan which is adequately funded or for which adequate funding is provided; and

(b) extends, or will extend, to the South Carolina policyholders and residents protection and benefits with respect to insolvent insurers not substantially less favorable and effective to such policyholders and residents than the protection and benefits provided with respect to such kinds of insurance under this chapter.

(2) The director or his designee shall by the same order authorize discontinuance of future payments by insurers to the association with respect to the same kinds of insurance. However, the assessments and payments must continue, as necessary, to liquidate covered claims of insurers adjudged insolvent prior to the order and the related expenses not covered by such other plan.

(3) In the event the operation of the association is terminated as to all kinds of insurance within its scope, the association shall as soon as possible thereafter distribute the balance of remaining money and assets, after first discharging the association's duties with respect to prior insurer insolvencies and related expenses not covered by such other plan. The distribution must be to the insurers which are then writing in this State policies of the kinds of insurance covered by this chapter and which had made payments to this association, pro rata upon the basis of the aggregate of the payments made by the respective insurers during the period of five years next preceding the date of the order. Upon completion of the distribution with respect to all of the kinds of insurance covered by this chapter, this chapter is considered to have expired.

HISTORY: Former 1976 Code SECTION 38-19-170 [1962 Code SECTION 37-836; 1971 (57) 1001] recodified as SECTION 38-31-170 by 1987 Act No. 155, SECTION 1; 1993 Act No. 181, SECTION 632.