S.C. Code Regs. § § 69-63
Current through Register Vol. 48, No. 10, October 25, 2024
Section 69-63 - South Carolina Reinsurance Facility RecoupmentA. Purpose The purpose of this regulation is provided by South Carolina Code of Laws Section 38-77-530 that states in part:
"Beginning on March 1, 2002 and continuing thereafter, every insured or policyholder who does not have any insurance merit rating points pursuant to the Uniform Merit Rating Plan in effect upon the effective date of this act must not be surcharged for the recoupment of any facility assessments or losses; therefore, a clean or nonpointed risk shall no longer pay any form of recoupment seeking to recoup facility losses. Any surcharge as provided above during the period of March 1, 1999 through February 28, 2002 must be displayed as a part of the applicable premium charge for liability insurance coverage. However, beginning on March 1, 2002 every insured or policyholder who does have insurance merit rating points pursuant to the Uniform Merit Rating Plan in effect upon the effective date of this act shall be surcharged for the recoupment of any facility assessments or losses; therefore, these pointed risks shall be the only persons in the State of South Carolina who shall pay any recoupment fee for facility losses or assessments remaining in the facility on March 1, 2002 or any losses accruing in the facility after March 1, 2002. Furthermore, the director of the Department of Insurance shall promulgate a plan by regulation to recoup any losses remaining in the facility on March 1, 2002 or any losses accruing after March 1, 2002 only from those insureds or policyholders having insurance merit rating points as provided above. This plan shall include, but is not limited to, a schedule of recoupment and method of surcharge method whether a fixed fee, a percentage basis, or otherwise consider appropriate by the director."
B. Basis of Recoupment Beginning on March 1, 2002 and continuing thereafter, a premium surcharge of 10% of liability premium shall be made on all drivers having points on March 1, 1999 on the basis of the merit rating plan in effect on March 1, 1999, as determined by convictions contained in the motor vehicle records.
C. Schedule of Recoupment (1) Beginning on March 1, 2003 and each year thereafter, the director shall evaluate the funds collected by this surcharge and compare this amount with the projected runoff. The director may reduce the percentage surcharge from 10% to a lower amount or eliminate the surcharge completely by issuing a notice 120 days in advance to insurers that the director is considering reducing the percentage surcharge. The notice must include a 30 day period to allow comments from insurers. After the 30 day period has expired, the director may lower the surcharge by order.(2) The director shall not lower the percentage surcharge unless the amount of recoupment projected to be recovered in the next fiscal year of the Reinsurance Facility is greater than the projected total remaining runoff of the South Carolina Reinsurance Facility. The collection of recoupment under this regulation must continue until the runoff obligations of the South Carolina Reinsurance Facility have been funded completely.(3) In the event any recoupment fees are collected in excess of the ultimate Facility debt as determined upon a final Facility settlement and accounting, such excess funds must be forwarded to the South Carolina Department of Motor Vehicles for the enforcement of the uninsured motorist laws of South Carolina.(4) The term "Ultimate Facility Debt" means the balance of all income and expense items for all open South Carolina Reinsurance Facility policy years and includes expenses incurred after the termination of the Facility, a final independent audit of the Facility, final disposition of all records and data as directed by the Board of Governors, and any other administrative and legal expenses that may be necessary to finalize the affairs of the Facility as determined by the Board of Governors or the South Carolina Department of Insurance.Added by State Register Volume 25, Issue No. 6, eff June 22, 2001. Amended by State Register Volume 34, Issue No. 3, eff March 26, 2010.