As used in this chapter:

(1) "Admitted insurer" means an insurer licensed to engage in the business of insurance in this State.

Terms Used In South Carolina Code 38-45-10

  • Affiliated group: means any group of entities that are all affiliated. See South Carolina Code 38-45-10
  • Casualty insurance: means each insurance against legal liability of the insured for bodily injury to or death of another person, including workers' compensation insurance, and for damages to or loss or destruction of the property of another person; medical payments insurance when written in conjunction with insurance covering liability for the deaths or bodily injuries of another person; guaranteeing the fidelity of a person holding a position of public or private trust; loss of or damage to property caused by burglary, theft, larceny, robbery, fraud, or unlawful taking or secretion of property owned by or entrusted to the insured; loss of or damage to property of the insured resulting from the explosion of or damage to a fired or unfired boiler or other pressure vessel, engine, turbine, compressor, pump, wheel, or an apparatus generating, transmitting, or using electric power, and machinery or equipment connected with any of them; loss resulting from nonpayment of debts owed to merchants or another person extending credit. See South Carolina Code 38-1-20
  • Contract: A legal written agreement that becomes binding when signed.
  • Control: means :

    (a) the entity directly or indirectly or acting through one or more other persons owns, controls, or has the power to vote twenty-five percent or more of any class of voting securities of the other entity; or

    (b) the entity controls in any manner the election of a majority of the directors or trustees of the other entity. See South Carolina Code 38-45-10
  • 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
  • Eligible surplus lines insurer: means a nonadmitted insurer with which a licensed broker, or a licensed producer as provided in § 38-45-10(8)(b)(ii), may place surplus lines insurance. See South Carolina Code 38-1-20
  • home state: means the home state, as determined pursuant to subitem (a), of the member of the affiliated group that has the largest percentage of premium attributed to it under the insurance contract. See South Carolina Code 38-45-10
  • Independently procured insurance: means insurance procured directly by an insured from a surplus lines insurer. See South Carolina Code 38-45-10
  • insurance: includes annuities. See South Carolina Code 38-1-20
  • Insurance broker: means a property and casualty insurance producer licensed by the director or his designee who:

    (i) sells, solicits, or negotiates insurance on behalf of an insured;

    (ii) takes or transmits other than for himself an application for insurance or a policy of insurance to or from an insured;

    (iii) advertises or otherwise gives notice that he receives or transmits a surplus lines application or policy;

    (iv) receives or delivers a policy of surplus lines insurance for an insured on behalf of a surplus lines insurer;

    (v) receives, collects, or transmits a premium of surplus lines insurance; or

    (vi) performs another act in the making of a surplus lines insurance contract for or with an insured. See South Carolina Code 38-45-10
  • Insurer: includes a corporation, fraternal organization, burial association, other association, partnership, society, order, individual, or aggregation of individuals engaging or proposing or attempting to engage as principals in any kind of insurance or surety business, including the exchanging of reciprocal or interinsurance contracts between individuals, partnerships, and corporations. See South Carolina Code 38-1-20
  • 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
  • Negotiate: means the act of conferring directly with or offering advice directly to a purchaser or prospective purchaser of a particular contract of insurance concerning substantive benefits, terms, or conditions of the contract, provided that the person engaged in that act either sells insurance or obtains insurance from insurers for purchasers. See South Carolina Code 38-1-20
  • Person: means a corporation, agency, partnership, association, voluntary organization, individual, or another entity, organization, or aggregation of individuals. See South Carolina Code 38-1-20
  • Policy: means a contract of insurance. 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 tax: means , with respect to surplus lines or independently procured insurance coverage, any tax, fee, assessment, or other charge imposed by a governmental entity directly or indirectly based on any payment made as consideration for an insurance contract, including premium deposits, assessments, registration fees, and any other compensation given in consideration for a contract of insurance. See South Carolina Code 38-45-10
  • producer: means a person who represents an insurance company and is required to be licensed pursuant to § 38-43-10. See South Carolina Code 38-1-20
  • Qualified risk manager: means , with respect to a policyholder of commercial insurance, a person who meets all of the following requirements:

    (a) the person is an employee of, or third-party consultant retained by, the commercial policyholder;

    (b) the person provides skilled services in loss prevention, loss reduction, or risk and insurance coverage analysis, and purchase of insurance; and

    (c)(i)(A) the person has a bachelor's degree or higher from an accredited college or university in risk management, business administration, finance, economics, or any other field determined by the director or other state regulatory official or entity to demonstrate minimum competence in risk management; and

    (B) has three years of experience in risk financing, claims administration, loss prevention, risk and insurance analysis, or purchasing commercial lines of insurance; or

    (aa) has a designation as a Chartered Property and Casualty Underwriter (CPCU) issued by the American Institute for CPCU/Insurance Institute of America;

    (bb) has a designation as an Associate in Risk Management (ARM) issued by the American Institute for CPCU/Insurance Institute of America;

    (cc) has a designation as Certified Risk Manager (CRM) issued by the National Alliance for Insurance Education & Research;

    (dd) has a designation as a RIMS Fellow (RF) issued by the Global Risk Management Institute; or

    (ee) any other designation, certification, or license determined by the director or other state insurance regulatory official or entity to demonstrate minimum competency in risk management;

    (ii)(A) has at least seven years of experience in risk financing, claims administration, loss prevention, risk and insurance coverage analysis, or purchasing commercial lines of insurance; and

    (B) has any one of the designations specified in subitems (c)(i)(B)(aa) through (c)(i)(B)(ee);

    (iii) has at least ten years of experience in risk financing, claims administration, loss prevention, risk and insurance coverage analysis, or purchasing commercial lines of insurance; or

    (iv) has a graduate degree from an accredited college or university in risk management, business administration, finance, economics, or any other field determined by the director or other state regulatory official or entity to demonstrate minimum competence in risk management. See South Carolina Code 38-45-10
  • State: includes any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the Northern Mariana Islands, the Virgin Islands, and American Samoa. See South Carolina Code 38-45-10
  • Surplus lines insurance: means any property and casualty insurance permitted to be placed directly or through a surplus lines broker, or an insurance producer as provided in subitem (b)(ii), with a surplus lines insurer eligible to accept the insurance as defined in § 38-1-20(56). See South Carolina Code 38-45-10
  • Surplus lines insurer: means an insurer not licensed to engage in the business of insurance in this State, but does not include a risk retention group, as that term is defined in Section 2(a)(4) of the Liability Risk Retention Act of 1986 (15 U. See South Carolina Code 38-45-10

(2) "Affiliate" means, with respect to an insured, any entity that controls, is controlled by, or is under common control with the insured.

(3) "Affiliated group" means any group of entities that are all affiliated.

(4) "Control" means:

(a) the entity directly or indirectly or acting through one or more other persons owns, controls, or has the power to vote twenty-five percent or more of any class of voting securities of the other entity; or

(b) the entity controls in any manner the election of a majority of the directors or trustees of the other entity.

(5) "Exempt commercial purchaser" means any person purchasing commercial insurance that, at the time of placement, meets the following requirements:

(a) the person employs or retains a qualified risk manager to negotiate insurance coverage;

(b) the person has paid aggregate nationwide commercial property and casualty insurance premiums in excess of one hundred thousand dollars in the immediately preceding twelve months; and

(c)(i) the person meets at least one of the following criteria:

(A) the person possesses a net worth in excess of twenty million dollars, as that amount is adjusted pursuant to subsubitem (ii);

(B) the person generates annual revenues in excess of fifty million dollars, as that amount is adjusted pursuant to subsubitem (ii);

(C) the person employs more than five hundred full-time or full-time equivalent employees per individual insured or is a member of an affiliated group employing more than one thousand employees in the aggregate;

(D) the person is a not-for-profit organization or public entity generating annual budgeted expenditures of at least thirty million dollars as that amount is adjusted pursuant to subsubitem (ii); or

(E) the person is a municipality with a population in excess of fifty thousand persons.

(ii) Effective on the January 1, 2017, and each fifth January first thereafter, the amounts in sub-subitems (i)(A), (B), and (D) of subitem (c) shall be adjusted to reflect the percentage change for the five-year period in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the Department of Labor.

(6)(a) "Home state", with respect to an insured, means:

(i) the state in which an insured maintains its principal place of business or, in the case of an individual, the individual’s principal residence; or

(ii) if one hundred percent of the insured risk is located out of the state referred to in subsubitem (i), the state to which the greatest percentage of the insured’s taxable premium for that insurance contract is allocated.

(b) Notwithstanding the provisions of subitem (a), if more than one insured from an affiliated group are named insureds on a single surplus lines insurance contract, the term "home state" means the home state, as determined pursuant to subitem (a), of the member of the affiliated group that has the largest percentage of premium attributed to it under the insurance contract.

(7) "Independently procured insurance" means insurance procured directly by an insured from a surplus lines insurer.

(8)(a) "Insurance broker" means a property and casualty insurance producer licensed by the director or his designee who:

(i) sells, solicits, or negotiates insurance on behalf of an insured;

(ii) takes or transmits other than for himself an application for insurance or a policy of insurance to or from an insured;

(iii) advertises or otherwise gives notice that he receives or transmits a surplus lines application or policy;

(iv) receives or delivers a policy of surplus lines insurance for an insured on behalf of a surplus lines insurer;

(v) receives, collects, or transmits a premium of surplus lines insurance; or

(vi) performs another act in the making of a surplus lines insurance contract for or with an insured.

(b) An insurance broker‘s license is not required of:

(i) a broker’s office employee acting within the confines of the broker’s office, under the direction and supervision of the licensed broker and within the scope of the broker’s license, in the acceptance of request for insurance and payment of premiums and the performance of clerical, stenographic, and similar office duties; or

(ii) a producer licensed for property and casualty insurance who places surplus lines insurance through a licensed insurance broker.

(c) An insurance broker, or an insurance producer as provided in subitem (b)(ii), may place that insurance either with an eligible surplus lines insurer or with a licensed insurance producer appointed by an insurance carrier licensed in this State.

(9) "Municipal agent" means the Municipal Association of South Carolina or other designated agent of the municipality for the purpose set forth in this chapter.

(10) "Surplus lines insurance" means any property and casualty insurance permitted to be placed directly or through a surplus lines broker, or an insurance producer as provided in subitem (b)(ii), with a surplus lines insurer eligible to accept the insurance as defined in § 38-1-20(56).

(11) "Surplus lines insurer" means an insurer not licensed to engage in the business of insurance in this State, but does not include a risk retention group, as that term is defined in Section 2(a)(4) of the Liability Risk Retention Act of 1986 (15 U.S.C. § 3901(a)(4)).

(12) "Premium tax" means, with respect to surplus lines or independently procured insurance coverage, any tax, fee, assessment, or other charge imposed by a governmental entity directly or indirectly based on any payment made as consideration for an insurance contract, including premium deposits, assessments, registration fees, and any other compensation given in consideration for a contract of insurance.

(13) "Broker’s premium tax rate" means a blended tax rate of six percent. The rate is comprised of a four percent state broker’s premium tax and a two percent municipal broker’s premium tax.

(14) "Qualified risk manager" means, with respect to a policyholder of commercial insurance, a person who meets all of the following requirements:

(a) the person is an employee of, or third-party consultant retained by, the commercial policyholder;

(b) the person provides skilled services in loss prevention, loss reduction, or risk and insurance coverage analysis, and purchase of insurance; and

(c)(i)(A) the person has a bachelor’s degree or higher from an accredited college or university in risk management, business administration, finance, economics, or any other field determined by the director or other state regulatory official or entity to demonstrate minimum competence in risk management; and

(B) has three years of experience in risk financing, claims administration, loss prevention, risk and insurance analysis, or purchasing commercial lines of insurance; or

(aa) has a designation as a Chartered Property and Casualty Underwriter (CPCU) issued by the American Institute for CPCU/Insurance Institute of America;

(bb) has a designation as an Associate in Risk Management (ARM) issued by the American Institute for CPCU/Insurance Institute of America;

(cc) has a designation as Certified Risk Manager (CRM) issued by the National Alliance for Insurance Education & Research;

(dd) has a designation as a RIMS Fellow (RF) issued by the Global Risk Management Institute; or

(ee) any other designation, certification, or license determined by the director or other state insurance regulatory official or entity to demonstrate minimum competency in risk management;

(ii)(A) has at least seven years of experience in risk financing, claims administration, loss prevention, risk and insurance coverage analysis, or purchasing commercial lines of insurance; and

(B) has any one of the designations specified in subitems (c)(i)(B)(aa) through (c)(i)(B)(ee);

(iii) has at least ten years of experience in risk financing, claims administration, loss prevention, risk and insurance coverage analysis, or purchasing commercial lines of insurance; or

(iv) has a graduate degree from an accredited college or university in risk management, business administration, finance, economics, or any other field determined by the director or other state regulatory official or entity to demonstrate minimum competence in risk management.

(15) "State" includes any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the Northern Mariana Islands, the Virgin Islands, and American Samoa.

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