South Carolina § 38-73-260 - Approval process for rate level changes; Consumer Advocate review of certain filings.

§ 38-73-260. Approval process for rate level changes; Consumer Advocate review of certain filings.

(A) Except as provided in subsection (B), overall average rate-level increases or decreases, for all coverages combined, of seven percent above or below the insurer's rates then in effect may take effect without prior approval on a file and use basis with respect to rates for fire, allied lines, and homeowner's insurance policies. The seven percent cap does not apply on an individual insured basis.

(B) Notwithstanding another provision of this chapter, for any policies governed by this section, filings that produce rate-level changes within the limitation specified in subsection (A) become effective without prior approval. No more than two rate increases within the limitation specified in subsection (A) may be implemented during a twelve-month period and the second rate increase filing in the twelve-month period is subject to prior approval.

(C) A rate increase or decrease falling within the limitation in subsection (B) may become effective not less than thirty days after the date of the filing with the director. The filing is considered to meet the requirements of this chapter. If the director finds that this filing is not in compliance with this chapter, he shall issue a written order specifying in detail the provisions with which the insurer has not complied and state a reasonable period in which the filing is considered no longer effective. An order by the director pursuant to this section that is issued more than thirty days from the date on which the director received the rate filing is on a prospective basis only and does not affect a contract issued or made before the effective date of the order.

(D) Rate filings falling outside the limitation specified in subsection (B) are subject to the prior approval of the director or his designee. The director or his designee shall approve or disapprove these filings pursuant to the provisions of Sections 38-73-960 and 38-73-990.

(E) With respect to applications for rate increases for fire, allied lines, and homeowner's insurance that exceed the seven percent cap as provided in subsection (A) and if an applicant insurer had earned premiums in this State in the previous calendar year of more than ten million dollars for the line or type of insurance for which the rate increase is sought, the director or his designee shall provide a copy of the filing to the Consumer Advocate or, in the alternative, shall direct the insurer to provide a copy simultaneously to the Consumer Advocate. Within ten business days of the receipt of the filing, the Consumer Advocate may request from the insurer additional information. A copy of the request must be served on the director or his designee. Within ten business days of the receipt of the information sought, the Consumer Advocate shall inform the insurer and the director if, in his opinion, the filing is not in compliance with this chapter and specify in detail the reason for his opinion. If the filing is accepted by the director and becomes effective, the Consumer Advocate, upon good cause shown, may request a hearing before the Administrative Law Court. An order of the administrative law judge issued pursuant to the provisions of this section is on a prospective basis only and does not affect any contract issued or made before the effective date of the order.

(F)(1) Nothing in this section prevents the director or his designee from considering the impact on individual territories or individual insureds when determining whether the rate is excessive, inadequate, or unfairly discriminatory. Rate level increases or decreases falling within the limitation specified in this subsection must comply with the requirements of this chapter prohibiting rate increases from being excessive, inadequate, or unfairly discriminatory.

(2) With respect to fire, allied lines, and homeowner's rates, the director or his designee shall specifically review all rate filings made on or after June 1, 2007, to ensure that each insurer's rates for policies that exclude wind coverage reflect a discount commensurate with that insurer's previously filed surcharge for policies that include wind coverage.

(3) This subsection does not apply to private passenger automobile insurance nor to insurance against liability arising out of the ownership, maintenance, or the use of:

(a) an individual private passenger automobile as defined in Section 38-77-30(5.5)(a); or

(b) property having wheels.

HISTORY: 2004 Act No. 290, SECTION 1, eff July 29, 2004; 2006 Act No. 332, SECTION 10, eff June 1, 2006; 2007 Act No. 78, SECTION 8, eff June 11, 2007, applicable to taxable years beginning after December 31, 2006.