2013 South Carolina Code of Laws
Title 38 - Insurance
CHAPTER 21 - INSURANCE HOLDING COMPANY REGULATORY ACT
SECTION 38-21-340. Criminal prosecutions; penalties.

(a) Any insurer failing, without just cause, to file any registration statement or summary thereof as required in this chapter is required, after notice and hearing, to pay a penalty of one thousand dollars for each day's delay, to be recovered by the director or his designee, and the penalty so recovered must be paid into the general fund of the state. The maximum penalty under this section is thirty thousand dollars. The director or his designee may reduce the penalty if the insurer demonstrates to the director or his designee that the imposition of the penalty would constitute a financial hardship to the insurer.

(b) Every director or officer of an insurance holding company system who knowingly violates, participates in, or assents to, or who knowingly permits any of the officers or agents of the insurer to engage in transactions or make investments which have not been properly reported or submitted pursuant to this chapter or which violate this chapter, shall pay, in their individual capacity, a civil forfeiture of not more than ten thousand dollars per violation, after notice and hearing before the director or his designee. In determining the amount of the civil forfeiture, the director or his designee shall take into account the appropriateness of the forfeiture with respect to the gravity of the violation, the history of previous violations, and other matters as justice may require.

(c) Whenever it appears to the director or his designee that any insurer subject to this chapter or any director, officer, employee, or agent thereof has engaged in any transaction or entered into a contract which is subject to Sections 38-21-250 through 38-21-270 and which would not have been approved had such approval been requested, the director or his designee may order the insurer to cease and desist immediately any further activity under that transaction or contract. After notice and hearing the director or his designee may also order the insurer to void any such contracts and restore the status quo if such action is in the best interest of the policyholders, creditors, or the public.

(d) Whenever it appears to the director or his designee that an insurer or a director, officer, employee, or agent of it has committed a willful violation of this chapter, the director or his designee may, in addition to other powers prescribed in this section, cause criminal proceedings to be instituted in the Circuit Court for the county in which the principal office of the insurer is located or, if the insurer has no such office in the state, then in the Circuit Court for Richland County against the insurer or the responsible director, officer, employee, or agent of it. An insurer which willfully violates this chapter may be fined not more than fifty thousand dollars. An individual who willfully violates this chapter is guilty of a misdemeanor and, upon conviction, must be fined an amount not to exceed ten thousand dollars or be imprisoned for a term not to exceed two years, or both.

(e) Any officer, director, or employee of an insurance holding company system who willfully and knowingly subscribes to or makes or causes to be made any false statements or false reports or false filings with the intent to deceive the director or his designee in the performance of his duties under this chapter is guilty of a misdemeanor and, upon conviction, must be imprisoned for not more than two years or fined ten thousand dollars, or both. Any fines imposed must be paid by the officer, director, or employee in his individual capacity.

(f) Whenever it appears to the director or his designee that any insurer has committed a violation of this chapter, or that any person has committed a violation of this chapter which makes continued operation of the insurer contrary to the interests of policyholders or the public, the director or his designee may, after giving notice and an opportunity to be heard, determine to suspend, revoke, or refuse to renew such insurer's license or authority to do business in this State for such period as he finds is required for the protection of policyholders or the public. Any such determination must be accompanied by specific findings of fact and conclusions of law.

HISTORY: Former 1976 Code Section 38-29-330 [1962 Code Section 37-1431; 1971 (57) 351; 1986 Act No. 426, Section 20] recodified as Section 38-21-340 by 1987 Act No. 155, Section 1; 1993 Act No. 181, Section 590.