2012 South Carolina Code of Laws
Title 38 - Insurance
Chapter 95 - INTERSTATE INSURANCE PRODUCT REGULATION COMPACT
Section 38-95-70 - Rulemaking authority; procedures; opting out of uniform standard; stay of uniform standard; judicial review.

(A) Rulemaking Authority. The commission shall adopt reasonable rules, including uniform standards and operating procedures, to effectively and efficiently achieve the purposes of this chapter. Notwithstanding another provision of law, if the commission exercises its rulemaking authority in a manner that is beyond the scope of the purposes of this chapter, or the powers granted pursuant to the provisions of this chapter, the action by the commission is invalid and has no force and effect.

(B) Rulemaking Procedure. Rules and operating procedures must be made pursuant to a rulemaking process that conforms to the Model State Administrative Procedures Act of 1981, as amended, as may be appropriate to the operations of the commission. Before the commission adopts a uniform standard, the commission shall give written notice to the relevant state legislative committee in each compacting state responsible for insurance issues of its intention to adopt the uniform standard. The commission in adopting a uniform standard shall consider fully all submitted materials and issue a concise explanation of its decision.

(C) Effective Date and Opt Out of a Uniform Standard. A uniform standard becomes effective ninety days after its adoption by the commission or at a later date as the commission may determine; except that a compacting state may opt out of a uniform standard as provided in this section. "Opt out" is defined as any action by a compacting state to decline to adopt or participate in a uniform standard. All rules and operating procedures, and amendments to them, becomes effective as of the date specified in each rule, operating procedure, or amendment.

(D) Opt Out Procedure. (1) A compacting state may opt out of a uniform standard, either by legislation or regulation duly promulgated by the state's insurance department under the compacting state's administrative procedures act. If a compacting state elects to opt out of a uniform standard by regulation, it shall:

(a) give written notice to the commission no later than ten business days after the uniform standard is adopted, or at the time the state becomes a compacting state; and

(b) find that the uniform standard does not provide reasonable protections to the citizens of the state, given the conditions in the state. The commissioner shall make specific findings of fact and conclusions of law, based on a preponderance of the evidence, detailing the conditions in the state, which warrant a departure from the uniform standard and determining that the uniform standard would not reasonably protect the citizens of the state. The commissioner shall consider and balance the following factors and find that the conditions in the state and needs of the citizens of the state outweigh the intent of the legislature to participate in, and the benefits of, an interstate agreement to establish national uniform consumer protections for the products subject to this chapter and the presumption that a uniform standard adopted by the commission provides reasonable protections to consumers of the relevant product.

(2) Notwithstanding another provision of law, a compacting state, at the time of the enactment of this chapter, prospectively may opt out of all uniform standards involving long-term care insurance products by expressly providing for the opt out in the enacted chapter, and the opt out must not be treated as a material variance in the offer or acceptance of a state to participate in this compact. An opt out is effective at the time of enactment of this chapter by the compacting state and applies to all existing uniform standards involving long-term care insurance products and those subsequently adopted.

(E) Effect of Opt Out. (1) If a compacting state elects to opt out of a uniform standard, the uniform standard remains applicable in the compacting state electing to opt out until the time the opt-out legislation is enacted into law or the regulation opting out becomes effective.

(2) Once the opt out of a uniform standard by a compacting state becomes effective as provided pursuant to the laws of that state, the uniform standard has no further force and effect in that state unless the legislation or regulation implementing the opt out is repealed or otherwise becomes ineffective pursuant to the laws of the state. If a compacting state opts out of a uniform standard after the uniform standard has been made effective in that state, the opt out has the same prospective effect as provided by Section 38-95-140 for withdrawals.

(F) Stay of Uniform Standard. If a compacting state has formally initiated the process of opting out of a uniform standard by regulation, and while the regulatory opt out is pending, the compacting state may petition the commission, at least fifteen days before the effective date of the uniform standard, to stay the effectiveness of the uniform standard in that state. The commission may grant a stay if it determines the regulatory opt out is being pursued in a reasonable manner and there is a likelihood of success. If a stay is granted or extended by the commission, the stay or extension may postpone the effective date by up to ninety days, unless affirmatively extended by the commission. A stay may not be permitted to remain in effect for more than one year unless the compacting state shows extraordinary circumstances that warrant a continuance of the stay including, but not limited to, the existence of a legal challenge that prevents the compacting state from opting out. A stay may be terminated by the commission upon notice that the rulemaking process has been terminated.

(G) Not later than thirty days after a rule or operating procedure is adopted, a person may file a petition for judicial review of the rule or operating procedure. The filing of a petition does not stay or otherwise prevent the rule or operating procedure from becoming effective unless the court finds that the petitioner has a substantial likelihood of success. The court shall give deference to the actions of the commission consistent with applicable law and may not find the rule or operating procedure to be unlawful if the rule or operating procedure represents a reasonable exercise of the commission's authority.

HISTORY: 2008 Act No. 339, Section 2, eff January 1, 2009.