2017-2018 Bill 16: Auto Insurance - South Carolina Legislature Online

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2017-2018 Bill 16: Auto Insurance - South Carolina Legislature Online

1 South Carolina General Assembly 2 122nd Session, 2017-2018 3 4 S. 16 5 6 STATUS INFORMATION 7 8 General Bill 9 Sponsors: Senators Rankin and Malloy 10 Document Path: l:\s-jud\bills\rankin\jud0021.kw.docx 11 12 Introduced in the Senate on January 10, 2017 13 Currently residing in the Senate Committee on Banking and Insurance 14 15 Summary: Auto insurance 16 17 18 HISTORY OF LEGISLATIVE ACTIONS 19 20 Date Body Action Description with journal page number 21 12/13/2016 Senate Prefiled 22 12/13/2016 Senate Referred to Committee on Banking and Insurance 23 1/10/2017 Senate Introduced and read first time ( Senate Journalpage 24) 24 1/10/2017 Senate Referred to Committee on Banking and Insurance ( Senate Journalpage 24) 25 26 View the latest legislative information at the website 27 28 29 VERSIONS OF THIS BILL 30 31 12/13/2016 32 1 2 3 4 5 6 7 8 9 A BILL 10 11 TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 12 1976, RELATING TO AUTOMOBILE INSURANCE, SO AS TO 13 AMEND SECTION 387730(1) TO CHANGE THE DEFINITION 14 OF AUTOMOBILE INSURANCE TO INCLUDE 15 UNDERINSURED MOTORIST COVERAGE; TO AMEND 16 SECTION 3877150 TO REQUIRE UNDERINSURED 17 MOTORIST COVERAGE ON ALL AUTOMOBILE 18 INSURANCE POLICIES; TO AMEND SECTION 3877160 TO 19 SPECIFY UNDERINSURED MOTORIST COVERAGE IS 20 AVAILABLE ABOVE THE MANDATORY MINIMUM LIMITS 21 AND TO REMOVE PROVISIONS ALLOWING AN INSURED 22 THE OPTION TO PURCHASE UNDERINSURED MOTORIST 23 COVERAGE; TO AMEND SECTION 3877200 TO INCLUDE 24 UNDERINSURED MOTORIST COVERAGE IN THE 25 PROVISION PREVENTING INSURERS FROM REQUIRING 26 ARBITRATION OF CLAIMS; TO AMEND SECTION 3877210 27 TO PROVIDE PROPERTY COVERAGE IS NOT REQUIRED 28 IN UNDERINSURED MOTORIST COVERAGE; AND TO 29 AMEND SECTION 3877260 SO AS TO DELETE 30 REFERENCES TO NONEXISTENT CODE SECTIONS. 31 32 Be it enacted by the General Assembly of the State of South 33 Carolina: 34 35 SECTION 1. Section 387730(1) of the 1976 Code is amended to 36 read: 37 38 “(1) ‘Automobile insurance’ means automobile bodily injury 39 and property damage liability insurance, including medical 40 payments, and uninsured motorist coverage, underinsured motorist 41 coverage, and automobile physical damage insurance such as 42 automobile comprehensive physical damage, collision, fire, theft,

[16] 2 1 combined additional coverage, and similar automobile physical 2 damage insurance and economic loss benefits as provided by this 3 chapter written or offered by automobile insurers. An automobile 4 insurance policy includes a motor vehicle liability policy as 5 defined in item (7) of Section 56920 and any nonowner automobile 6 insurance policy which covers an individual private passenger 7 automobile not owned by the insured, a family member of the 8 insured, or a resident of the same household as the insured.” 9 10 SECTION 2. Section 3877150 of the 1976 Code is amended to 11 read: 12 13 “Section 3877150. (A) No automobile insurance policy or 14 contract may be issued or delivered unless it contains a provisions 15 by endorsement or otherwise, herein referred to as the uninsured 16 motorist provision and the underinsured motorist provision, 17 undertaking to pay the insured all sums which he is legally entitled 18 to recover as damages from the owner or operator of an uninsured 19 or underinsured motor vehicle, within limits which may be no less 20 than the requirements of Section 3877140. The uninsured motorist 21 provision and underinsured motorist provision also must provide 22 for no less than twentyfive thousand dollars’ coverage for injury to 23 or destruction of the property of the insured in any one accident 24 but may provide an exclusion of the first two hundred dollars of 25 the loss or damage. The director or his designee may prescribe the 26 form to be used in providing uninsured motorist coverage and 27 underinsured motorist coverage and when prescribed and 28 promulgated no other form may be used. 29 (B) No action may be brought under the uninsured motorist 30 provision unless copies of the pleadings in the action establishing 31 liability are served in the manner provided by law upon the insurer 32 writing the uninsured motorist provision. The insurer has the right 33 to appear and defend in the name of the uninsured motorist in any 34 action which may affect its liability and has thirty days after 35 service of process on it in which to appear. The evidence of 36 service upon the insurer may not be made a part of the record. 37 (C) Benefits paid pursuant to this section are subject to 38 subrogation and assignment if an uninsured motorist or 39 underinsured motorist has selected the option to be uninsured by 40 paying the fee pursuant to Section 5610510.” 41 42 SECTION 3. Section 3877160 of the 1976 Code is amended to 43 read:

[16] 3 1 2 “Section 3877160. Automobile insurance carriers shall offer, at 3 the option of the insured, uninsured motorist coverage and 4 underinsured motorist coverage up to the limits of the insured’s 5 liability coverage in addition to the mandatory coverage prescribed 6 by Section 3877150. Such carriers shall also offer, at the option of 7 the insured, underinsured motorist coverage up to the limits of the 8 insured liability coverage to provide coverage in the event that 9 damages are sustained in excess of the liability limits carried by an 10 atfault insured or underinsured motorist or in excess of any 11 damages cap or limitation imposed by statute. If, however, an 12 insured or named insured is protected by uninsured or 13 underinsured motorist coverage in excess of the basic limits, the 14 policy shall provide that the insured or named insured is protected 15 only to the extent of the coverage he has on the vehicle involved in 16 the accident. If none of the insured’s or named insured’s vehicles 17 is involved in the accident, coverage is available only to the extent 18 of coverage on any one of the vehicles with the excess or 19 underinsured coverage. Benefits paid pursuant to this section are 20 not subject to subrogation and assignment. 21 No action may be brought under the underinsured motorist 22 provision unless copies of the pleadings in the action establishing 23 liability are served in the manner provided by law upon the insurer 24 writing the underinsured motorist provision. The insurer has the 25 right to appear and defend in the name of the underinsured 26 motorist in any action which may affect its liability and has thirty 27 days after service of process on it in which to appear. The 28 evidence of service upon the insurer may not be made a part of the 29 record. In the event the automobile insurance insurer for the 30 putative atfault insured chooses to settle in part the claims against 31 its insured by payment of its applicable liability limits on behalf of 32 its insured, the underinsured motorist insurer may assume control 33 of the defense of action for its own benefit. No underinsured 34 motorist policy may contain a clause requiring the insurer’s 35 consent to settlement with the atfault party.” 36 37 SECTION 4. Section 3877200 of the 1976 Code is amended to 38 read: 39 40 “Section 3877200. The uninsured motorist provision and the 41 underinsured motorist provision may not require arbitration of any 42 claim arising under it, nor may anything not otherwise herein 43 provided for or as may be provided in the form prescribed by the

[16] 4 1 director or his designee be required of the insured except the 2 establishment of legal liability of the uninsured motorist or 3 underinsured motorist, nor may the insured be restricted or 4 prevented in any manner from employing legal counsel or 5 instituting legal proceedings.” 6 7 SECTION 5. Section 3877210 of the 1976 Code is amended to 8 read: 9 10 “Section 3877210. The uninsured motorist provision and the 11 underinsured motorist provision need not insure any liability for 12 property damages for which loss a policyholder has been 13 compensated by insurance or otherwise.” 14 15 SECTION 6. Section 3877260 of the 1976 Code is amended to 16 read: 17 18 “Section 3877260. (a) No person making payment or 19 settlement of benefits for which the person is obligated under 20 Sections 3877240 3877250 to 3877340 and no insurer may in 21 connection with the payment or settlement of a claim for these 22 firstparty benefits or for any firstparty benefits arising under an 23 automobile insurer’s coverage including, but not limited to, 24 medical payments and uninsured motorist coverage, obtain or 25 attempt to obtain from the claimant receiving the benefits any 26 general release, covenant not to sue, assignment, article of 27 subrogation, or any other instrument or document which purports 28 to assign to that person or insurer all or any portion of any claim 29 which the claimant may have against any other party or his insurer 30 arising out of legal liability or which purports to constitute an 31 agreement by the claimant that any amount received as first party 32 benefits must be deducted from any settlement or judgment 33 recoverable from any other party or his insurer arising out of legal 34 liability. Every such purported general release, covenant not to 35 sue, or similar instrument is null and void unless (1) the insurer or 36 other person has delivered to the person entitled to the firstparty 37 benefits, or his legal representative, a disclosure statement, on a 38 form approved by the director or his designee, fully and fairly 39 disclosing the fact that the firstparty benefits payable under 40 Sections 3877240 3877250 to 3877340 are contractual obligations 41 of the insurer or other person and are entirely separate and distinct 42 from any obligation which the insurer or other person may have 43 because of the legal liability of any person and that the person

[16] 5 1 receiving the firstparty benefits is not required and may not be 2 required to release or relinquish any rights which he may have 3 arising out of the legal liability of any person in order to receive 4 payment or settlement of the firstparty benefits arising under 5 Sections 3877240 3877250 to 3877340 and (2) an interval of not 6 less than three days has elapsed between the later of (i) the 7 delivery of the disclosure statement or (ii) the payment or 8 settlement of the firstparty benefits and the execution of the 9 general release, covenant not to sue, or similar instrument.” 10 11 SECTION 7. This act takes effect upon approval by the 12 Governor. 13 XX 14

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