South Carolina Insurance Laws and Regulations
Regulator and licensing
The South Carolina Department of Insurance, headed by an elected Commissioner of Insurance, licenses producers and enforces the insurance code. Producers must be licensed for each line, be appointed by the insurer, and complete continuing education each licensing cycle, including a required ethics component. Licenses must be renewed, and appointments are terminated when the producer stops representing the insurer. Producers owe a fiduciary duty; premium funds must be held in a trust account and never commingled with personal or operating funds, and records must be retained for the period the Department requires.
Prohibited practices
Unfair trade practices include misrepresentation, false advertising, twisting (inducing replacement through misrepresentation), rebating (offering inducements not in the policy), unfair discrimination, boycott, coercion, and intimidation, and unfair claim settlement practices such as failing to investigate promptly or offering far less than the claim is worth.
Market conduct and cancellation
Policies must give proper advance written notice of cancellation and nonrenewal, with shorter notice permitted for nonpayment of premium. Cancellation for any reason after the policy has been in force for a set period is restricted.
South Carolina specifics
Minimum auto liability limits are 25/50/25; insurers must offer uninsured/underinsured motorist coverage, and a written rejection is required. Coastal wind coverage is available through the South Carolina Wind and Hail Underwriting Association, the residual market for beach property. The Catastrophe Savings Account and the Safe Home mitigation program encourage wind-damage preparedness.
Traps
Assuming rebating is allowed as a sales tool; confusing the Insurance Department with the Workers' Compensation Commission.
Rule of thumb
Any inducement not stated in the policy is an illegal rebate.