2013 South Carolina Code of Laws
Title 38 - Insurance
CHAPTER 21 - INSURANCE HOLDING COMPANY REGULATORY ACT
SECTION 38-21-260. Determining adequacy of insurer's surplus.

For purposes of this chapter, in determining whether an insurer's surplus as regards policyholders is reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs, the following factors, among others, are considered:

(1) the size of the insurer as measured by its assets, capital and surplus, reserves, premium writings, insurance in force, and other appropriate criteria;

(2) the extent to which the insurer's business is diversified among the several lines of insurance;

(3) the number and size of risks insured in each line of business;

(4) the extent of the geographical dispersion of the insured risks;

(5) the nature and extent of the reinsurance program;

(6) the quality, diversification, and liquidity of the investment portfolio;

(7) the recent past and projected future trend in the size of the insurer's investment portfolio;

(8) the surplus as regards policyholders maintained by other comparable insurers;

(9) the adequacy of the reserves;

(10) the source of the insurer's earnings and the extent to which the reported earnings include extraordinary items, such as surplus relief reinsurance transactions and reserve destrengthening; and

(11) The quality and liquidity of investments in affiliates.

The director or his designee may treat any such investment as a disallowed asset for purposes of determining the adequacy of surplus as regards policyholders whenever in his judgment the investment so warrants.

HISTORY: Former 1976 Code Section 38-21-260 [1947 (45) 322; 1952 Code Section 37-876; 1962 Code Section 37-876] recodified as Section 38-37-260 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-29-250 [1962 Code Section 37-1423; 1971 (57) 351; 1986 Act No. 426, Section 16] recodified as Section 38-21-260 by 1987 Act No. 155, Section 1; 1993 Act No. 70, Section 5; 1993 Act No. 181, Section 582.