A society may not transact business in this State without a certificate of authority issued by the director or his designee. A society desiring admission to, or wishing to continue to transact business in this State, shall comply with the requirements and limitations of this chapter. A society may be authorized to transact, or continue to transact, business in this State upon filing with the director or his designee:

(1) a certified copy of its articles of incorporation;

Terms Used In South Carolina Code 38-38-550

  • Affidavit: A written statement of facts confirmed by the oath of the party making it, before a notary or officer having authority to administer oaths.
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Bylaws: means the society's articles of incorporation, constitution, and bylaws, however designated. See South Carolina Code 38-38-40
  • Certificate: means the document issued as written evidence of the benefit contract. See South Carolina Code 38-38-40
  • Contract: A legal written agreement that becomes binding when signed.
  • Director: means the Director of the Department of Insurance of this State. See South Carolina Code 38-38-40
  • Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • Fraud: Intentional deception resulting in injury to another.
  • Home state: means the District of Columbia and a state or territory of the United States in which an insurance producer maintains his principal place of residence or principal place of business and is licensed to act as an insurance producer. See South Carolina Code 38-1-20
  • insurance: includes annuities. See South Carolina Code 38-1-20
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • License: means a document issued by the state's director or his designee authorizing a person to act as an insurance producer for the lines of authority specified in the document. See South Carolina Code 38-1-20
  • Oath: A promise to tell the truth.
  • Power of attorney: A written instrument which authorizes one person to act as another's agent or attorney. The power of attorney may be for a definite, specific act, or it may be general in nature. The terms of the written power of attorney may specify when it will expire. If not, the power of attorney usually expires when the person granting it dies. Source: OCC
  • Society: means fraternal benefit society, unless otherwise indicated. See South Carolina Code 38-38-40
  • Statute: A law passed by a legislature.

(2) a copy of its bylaws, certified by its secretary or corresponding officer;

(3) a power of attorney to the director or his designee as prescribed in § 38-38-710;

(4) a statement of its business under the oath of its president and secretary or corresponding officers in a form prescribed by the director or his designee, verified by an examination made by the supervising insurance official of its home state or other state, territory, province, or country, satisfactory to the director or his designee;

(5) certification from the proper official of this State or its home state, territory, province, or country that the society is legally incorporated, and that, for a foreign or alien society, it is licensed to transact business there and to write the lines of business for which authority is being requested;

(6) copies of its certificate forms;

(7) evidence that its assets are invested in accordance with the provisions of this chapter;

(8) evidence that its name is not substantially similar to another society authorized to do business in this State;

(9) evidence that the society’s surplus complies with the amount required by § 38-9-20. A society, if possessed of surplus on December 31, 1998, that was in compliance with the law at that time but is less than the minimum required to be maintained by § 38-9-20, shall maintain not less than the amount of surplus stated in its 1998 annual statement. If the surplus of the society is reduced to less than eighty percent of the amount shown in its 1998 annual statement, the society is considered delinquent, and the director or his designee may begin delinquency proceedings as provided by Chapter 27 of this title. If the surplus of the society is increased to an amount greater than the amount possessed on December 31, 1998, eighty percent of that greater amount of surplus, or the minimum amount required to be maintained by § 38-9-20, whichever amount is the lesser, must be maintained after the increase, and if it is not maintained, the society is considered delinquent, and the director or his designee may begin delinquency proceedings as provided by Chapter 27 of this title;

(10) evidence that the society’s deposit complies with the amount required by § 38-9-80 and Regulation 69-15, § 38-9-100, or § 38-9-110;

(11) evidence that the society’s reserves are adequate for the protection of certificate holders of this State;

(12) evidence that the society’s directors and officers are competent, trustworthy, and have a good business reputation and that none of the directors and officers has been convicted of a crime in any jurisdiction involving fraud, dishonesty, or like moral turpitude or convicted of violating an insurance statute of any jurisdiction;

(13) evidence that the society has employed one or more persons residing in this State with adequate experience and training to manage properly its business and affairs;

(14) evidence that the society has not entered into any management contract, agency agreement, or other agreement which may materially affect its financial condition so as to render its proceedings hazardous to the public or to its certificate holders;

(15) evidence that the society has made adequate reinsurance arrangements if required;

(16) evidence that the society’s proposed method of operation, when considered in light of its financial condition and the absence of any prior operating experience, will not likely render its proceedings hazardous to the public or to its policyholders;

(17) an affidavit of its president or other chief officer that it has not violated this title in the past year and that it accepts the terms and obligations of this title as part of the consideration for license;

(18) evidence that the society is safe and solvent;

(19) evidence that society’s dealings are fair and equitable;

(20) evidence that the society conducts its business in a manner not contrary to the public interest; and

(21) any other information the director or his designee considers necessary.

The above requirements are subject to retaliatory provisions, if applicable, pursuant to § 38-7-90. If subsequently the director or his designee is of the opinion that a condition exists which would have prohibited him from issuing the original certificate of authority or license to the society, then that condition also constitutes a ground for license revocation under § 38-5-120.

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