S.C. Code § 38-13-10

Current through 2024 Act No. 225.

Section 38-13-10 - Examination of insurers; examination of person or business; acceptance of examination report of insurer prepared by insurance department of another state

(A) The director or his examiners may conduct a financial examination under this chapter of an insurer or health maintenance organization (HMO) or other licensee as authorized by this title as often as the director or his designee consider appropriate but, at a minimum, shall conduct a financial examination of every insurer licensed in this State not less frequently than once every five years. When the director or his designee considers it prudent for the protection of policyholders in this State, he may examine or have examined an insurer applying for admission in this State. In scheduling and determining the nature, scope, and frequency of the examinations, the director or his designee shall consider compliance with relevant South Carolina laws and regulations, the results of financial statement analyses and ratios, changes in management or ownership, actuarial opinions, reports of independent certified public accountants, and other criteria set forth in the Financial Condition Examiners' Handbook adopted by the National Association of Insurance Commissioners and in effect when the director or his designee exercises his authority under this subsection.

(B) The director or his examiners may conduct a market conduct examination whenever the director considers it appropriate based on the market analysis or practices of the insurer or HMO or other licensee as authorized by this title. The director or his designee has the discretion to conduct full scope or targeted, on-site market conduct examinations in accordance with the NAIC Market Regulation Handbook and other market analysis tools. The director is authorized to determine the frequency, depth, and timing of market conduct examinations and may schedule and coordinate multiple examinations simultaneously or participate in multistate examinations.

(C) For purposes of completing an examination of an insurer under this chapter, the director or his designee may examine or investigate a person or his business in a manner considered necessary or material by the director or his designee.

(D) In lieu of an examination under this section of a foreign or an alien insurer licensed in this State, the director or his designee may accept an examination report on the insurer prepared by the insurance department for the insurer's state of domicile or port-of-entry state if one or both of the following apply:

(1) The insurance department at the time of the examination was accredited under the National Association of Insurance Commissioners' Financial Regulation Standards and Accreditation Program;

(2) The examination is performed with the participation of one or more examiners who are employed by the accredited insurance department, and who, after a review of the examination work papers and report, state under oath that the examination was performed in a manner consistent with the standards and procedures required by their department.

S.C. Code § 38-13-10

Amended by 2024 S.C. Acts, Act No. 180 (HB 4869),s 3, eff. 5/20/2024.

1993 Act No. 181, Section 537; 1992 Act No. 394, Section 1; 1988 Act No. 357, Section 1; 1962 Code Section 37-281] recodified as Section 38-13-10 by 1987 Act No. 155, Section 1; 1960 (51) 1646; 1957 (50) 282; 1952 Code Section 37-281; 1948 (45) 1734; Former 1976 Code Section 38-5-1220 [1947 (45) 322; 1962 Code Section 37-601] has no comparable provisions in 1987 Act No. 155; 1952 Code Section 37-601; Former 1976 Code Section 38-13-10 [1947 (45) 322.

2005 Act No. 27, Section 10, provides as follows:

"The Department of Insurance shall review data reported on annual statements by liability insurers including, but not limited to, paid claims, reserves, loss adjustment expenses, and such additional data as the department may require by promulgation of bulletin, to determine savings related to a decrease in litigation and claims paid pursuant to litigation after the effective date of this act. The department may require special reports from insurers to determine if savings are realized as a result of the provisions of this act. The department shall compile a report of savings realized and submit it for General Assembly review upon request. Costs or expenses associated with the compilation of this report of savings shall be paid by the insurers pursuant to the provisions of Chapter 13 of Title 38. The Department of Insurance shall review premium and losses by line of insurance to determine if appropriate adjustments have been made based upon the department estimates of savings realized pursuant to the provisions of this act."

2005 Act No. 32, Section 14, provides as follows:

"The Department of Insurance shall review data reported on annual statements by liability insurers, including, but not limited to, paid claims, reserves, loss adjustment expenses, and such additional data as the department may require by promulgation of bulletin, to determine savings related to a decrease in litigation and claims paid pursuant to litigation after the effective date of this act. The department may require special reports from insurers to determine if savings are realized as a result of the provisions of this act. The department shall compile a report of savings realized and submit it for General Assembly review upon request. Costs or expenses associated with the compilation of this report of savings shall be paid by the insurers pursuant to the provisions of Chapter 13 of Title 38. The Department of Insurance shall review premium and losses by line of insurance to determine if appropriate adjustments have been made based upon the department estimates of savings realized pursuant to the provisions of this act."