2012 South Carolina Code of Laws
Title 38 - Insurance
Chapter 12 - SOUTH CAROLINA INVESTMENTS LAWS
Section 38-12-420 - Asset and reserve requirements; notice of deficiency; notice to eliminate noncompliance.

(A) Each property and casualty, financial guaranty, mortgage guaranty, or accident and health insurer shall have and maintain investments and engage in investment practices of the classes described in Sections 38-12-430 through 38-12-520 subject to the limitations contained in those sections to the extent of policyholder obligations and minimum capital, or guaranty fund, and surplus less an amount equal to thirty percent of its surplus as regards policyholders. In no event may a property and casualty, financial guaranty, mortgage guaranty, or accident and health insurer have and maintain investments and investment practices of the types described in the immediately preceding sentence in an amount less than seventy percent of policyholder obligations and one hundred percent of the minimum required capital, or guaranty fund, and surplus. A property and casualty, financial guaranty, mortgage guaranty, or accident and health insurer may invest its assets in excess of those required pursuant to the two immediately preceding sentences at the discretion of the insurer without regard to any of the limitations contained in Sections 38-12-430 through 38-12-520.

(B) If a property and casualty, financial guaranty, mortgage guaranty, or accident and health insurer's assets and reserves do not comply with subsection (A), the insurer shall notify the director immediately of the amount by which the reserve requirements exceed the annual statement value of the qualifying assets and explain the reason for the deficiency. Within thirty days of the date of the notice, the insurer shall propose a plan of action to remedy the deficiency.

(C)(1) If the director determines that a property and casualty, financial guaranty, mortgage guaranty, or accident and health insurer is not in compliance with subsection (A), the director shall require the insurer to eliminate the noncompliance within a specified time from the date the notice of the requirement is delivered to the insurer.

(2) If an insurer fails to comply with the director's requirement described in item (1), the insurer is considered to be in hazardous financial condition, the director shall take action as authorized by law as to an insurer in hazardous financial condition.

HISTORY: 2002 Act No. 319, Section 2, eff June 3, 2002.