South Carolina Code 38-39-80. Premium service companies may not write insurance or sell other services or commodities; service charges
(b) A premium service company may not charge, contract for, receive, or collect a service charge other than as permitted by this chapter.
Terms Used In South Carolina Code 38-39-80
- Contract: A legal written agreement that becomes binding when signed.
- Department: means the Department of Insurance of South Carolina. See South Carolina Code 38-1-20
- Director: means the person who is appointed by the Governor upon the advice and consent of the Senate and who is responsible for the operation and management of the department. See South Carolina Code 38-1-20
- insurance: includes annuities. See South Carolina Code 38-1-20
- Premium: means payment given in consideration of a contract of insurance. See South Carolina Code 38-1-20
- Premium service agreement: means an agreement by which an insured or prospective insured promises to pay to an insurance premium service company the amount advanced or to be advanced under the agreement to an insurer or to an insurance producer or insurance broker in payment of premiums on an insurance contract together with a service charge as authorized by Chapter 39 of this title. See South Carolina Code 38-1-20
- Remainder: An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
- Sell: means to exchange a contract of insurance by any means, for money or its equivalent, on behalf of an insurance company. See South Carolina Code 38-1-20
(c) The service charge must be computed on the balance of the premiums due (after subtracting the down payment made by the insured in accordance with the premium service agreement) from the effective date of the insurance coverage, for which the premiums are being advanced, to and including the date when the final installment of the premium service agreement is payable, unless the service charge is computed as a fixed amount for each installment.
(d) An initial charge up to twenty dollars for each premium service contract, addendum, and revision is permitted, which may not be refunded upon cancellation or prepayment. The amount of the initial charge must be filed with the department.
(e) The service charge is the greater of the rate of one percent for each month computed on the remainder of the outstanding balance or an amount for each installment filed with and approved or promulgated by the department. However, if there is a cancellation by the borrower before maturity of the contract, the unearned service charge must be refunded on a short rate basis as determined by the department. With respect to the service charge for a premium service agreement which is for other than personal, family, or household purposes, the parties may contract for the payment by the debtor of a service charge at any rate, but no rate charged pursuant to the provisions of this subsection may be unconscionable. "Unconscionable" is defined as a rate substantially exceeding the usual and customary charge for financing insurance premiums.
(f) A premium service company may not induce an insured to become obligated under more than one premium service agreement for the purpose of obtaining more than one nonrefundable initial charge, and a premium service company may not intentionally cancel an insurance contract for the purpose of obtaining an additional nonrefundable initial charge on a new premium service agreement accepted within sixty days of the cancellation on the prior agreement.
(g) A premium service agreement may provide for the payment by the insured of a delinquency charge on each installment in default for a period of not less than five days of one dollar to a maximum of five percent of the installment. However, if the loan is primarily for personal family and household purposes, the amount of the delinquency charge must be filed with and approved or promulgated by the department, and may be charged on each installment in default for one or more days. Only one delinquency charge may be collected on an installment regardless of the period during which it remains in default.
(h) A premium service company may charge an amount for payments made by the borrower or on the borrower’s behalf through alternative payment mechanisms. This amount must be filed with and approved or promulgated by the department.