South Carolina Life and Accident and Health Insurance Guaranty Association

Covered Contracts

§38-29.40(2)(a). Policies or contracts of direct, nongroup life insurance, health insurance including health maintenance organization subscriber contracts and certificates, or annuities, for certificates under direct group policies and contracts, and for supplemental contracts to any of these, in each case issued by member insurers.

Non-Covered Contracts

§38-29.40(2)(b). (i) a portion of a policy or contract or part thereof not guaranteed by the member insurer, or under which the risk is borne by the policy or contract owner; (ii) a policy or contract of reinsurance, unless assumption certificates have been issued pursuant to the reinsurance policy or contract; (iii) a portion of a policy or contract, other than a portion, including a rider, that provides long-term care or any other health insurance benefits, to the extent the rate of interest on which it is based, or the interest rate, crediting rate, or similar factor determined by use of an index or other external reference stated in the policy or contract employed in calculating returns or changes in value: (A) averaged over the period of four years prior to the date on which the member insurer becomes an impaired or insolvent insurer under this chapter, whichever is earlier, exceeds the rate of interest determined by subtracting two percentage points from Moody's Corporate Bond Yield Average averaged for that same four-year period or for such lesser period if the policy or contract was issued less than four years before the member insurer becomes an impaired or insolvent insurer under this chapter, whichever is earlier; and (B) on and after the date on which the member insurer becomes an impaired or insolvent insurer, whichever is earlier, exceeds the rate of interest determined by subtracting three percentage points from Moody's Corporate Bond Yield Average as most recently available; (iv) any policy or contract issued by assessment mutuals, fraternals, and nonprofit hospital and medical service plans; (v) a portion of a policy or contract issued to a plan or program of an employer, association, or other person to provide life, health, or annuity benefits to its employees, members, or others, to the extent that the plan or program is self-funded or uninsured; (vi) a portion of a policy or contract to the extent that it provides for: (A) dividends or experience rating credits; (B) voting rights; or (C) payment of any fees or allowances to any person, including the policy or contract owner, in connection with the service to or administration of the policy or contract; (vii) a portion of a policy or contract to the extent that the assessments required by Section 38-29-80 with respect to the policy or contract are preempted by federal or state law; (viii) an obligation that does not arise under the express written terms of the policy or contract issued by the member insurer to the enrollee, certificate holder, contract owner, or policy owner; (ix) a contractual agreement that establishes the member insurer's obligations to provide a book value accounting guaranty for defined contribution benefit plan participants by reference to a portfolio of assets that is owned by the benefit plan or its trustee, which in each case is not an affiliate of the member insurer; (x) an unallocated annuity contract; (xi) a portion of a policy or contract to the extent it provides for interest or other changes in value to be determined by the use of an index or other external reference stated in the policy or contract, but which have not been credited to the policy or contract, or as to which the policy or contract owner's rights are subject to forfeiture, as of the date the member insurer becomes an impaired or insolvent insurer under this chapter, whichever is earlier. If a policy's or contract's interest or changes in value are credited less frequently than annually, then for purposes of determining the values that have been credited and are not subject to forfeiture, the interest or change in value determined by using the procedures defined in the policy or contract will be credited as if the contractual date of crediting interest or changing values was the date of impairment or insolvency, whichever is earlier, and will not be subject to forfeiture; (xii) a policy or contract providing any hospital, medical, prescription drug, or other health care benefits pursuant to 42 U.S.C. Chapter 7, Subchapter XVIII, Part C or Part D; 42 U.S.C. Chapter 7, Subchapter XIX; or 42 U.S.C. Chapter 7; or any regulations issued pursuant thereto; or (xiii) structured settlement annuity benefits to which a payee or beneficiary has transferred his rights in a structured settlement factoring transaction as defined in 26 U.S.C. 5891(c)(3)(A), regardless of when the transaction occurred before or after such section became effective.

Non-Resident Coverage

§38-29.70(7). The association has no liability for any covered policy of a foreign or alien insurer whose domiciliary jurisdiction or state of entry provides by statute or regulation for residents of this State protection substantially similar to that provided by this chapter for residents of other states. In addition, the association has no liability under this chapter for covered policies of a domestic insurer for residents of another state unless the other state has a guaranty association that provides protection to South Carolina residents substantially similar to that provided by this chapter for residents of other states.

§38-29.40(3)(b)(i). (A) $300,000 in life insurance death benefits, but not more than $300,000 in net cash surrender and net cash withdrawal values for life insurance; (B) for health insurance benefits: (1) $300,000 for coverages not defined as disability income insurance or health benefit plans or long-term care insurance, including any net cash surrender and net cash withdrawal values; (2) $300,000 for disability income insurance and $300,000 for long-term care insurance; (3) $500,000 for health benefit plans; (C) $300,000 in the present value of annuity benefits, including net cash surrender and net cash withdrawal values; or (ii) with respect to each payee of a structured settlement annuity or beneficiary if the payee is deceased, $300,000 in present value annuity benefits, in the aggregate, including net cash surrender and net cash withdrawal values, if any; (iii) the association is not obligated to cover more than an aggregate of $300,000 in benefits with respect to any one life except with respect to benefits for health benefit plans, in which case the aggregate liability of the association shall not exceed $500,000 with respect to any one individual or with respect to one owner of multiple nongroup policies of life insurance, whether the policy or contract owner is an individual, firm, corporation, or other person, and whether the persons insured are officers, managers, employees, or other persons, more than $5,000,000 in benefits, regardless of the number of policies and contracts held by the owner.

Discretionary Triggers

§38-29.70(1). When a member insurer is impaired

Mandatory Triggers

§38-29.70(2). When a member insurer is insolvent.

Foreign Triggers

No provision.

"Impaired Insurer"

§38-29.20(11). A member insurer which, after the effective date of this chapter, is not an insolvent insurer but has been placed under an order of rehabilitation or conservation by a court of competent jurisdiction.

"Insolvent Insurer"

§38-29.20(12) A member insurer which, after the effective date of this chapter, is placed under an order of liquidation by a court of competent jurisdiction with a finding of insolvency.

"Member Insurer"

§ 38-29-20(13) "Member insurer" means an insurer or health maintenance organization authorized to transact in this State any kind of insurance to which this chapter applies under Section 38-29-40.This includes an insurer or health maintenance organization whose authority to transact business in this State may have been suspended, revoked, not renewed, or voluntarily withdrawn but does not include: (a) a hospital or medical service organization, whether profit or nonprofit; (b) a fraternal benefit society; (c) a mandatory state pooling plan; (d) a mutual assessment company or other person that operates on an assessment basis; (e) an insurance exchange; (f) an organization that has a certificate or license limited to the issuance of charitable gift annuities under Section 38-5-20; or (g) an entity similar to any of the above.

§38-29.50(1). Three accounts: accident and health insurance; life insurance; and annuity.

Assessment Limits

§38-29.80(5). Four percent (4%) of premiums in state for policies covered by the account.

Assessment Classes

§38-29.80(2). Two classes of assessments: Class A for administrative costs, general expenses and examinations; and Class B to carry out the powers and duties of the association with regard to an insolvent or impaired insurer;

§38-29.40(b)(iii). Except as otherwise provided, this chapter does not provide coverage for a portion of a policy or contract, other than a portion, including a rider, that provides long-term care or any other health insurance benefits, to the extent the rate of interest on which it is based, or the interest rate, crediting rate, or similar factor determined by use of an index or other external reference stated in the policy or contract employed in calculating returns or changes in value: (A) averaged over the period of four years prior to the date on which the member insurer becomes an impaired or insolvent insurer under this chapter, whichever is earlier, exceeds the rate of interest determined by subtracting two percentage points from Moody's Corporate Bond Yield Average averaged for that same four-year period or for such lesser period if the policy or contract was issued less than four years before the member insurer becomes an impaired or insolvent insurer under this chapter, whichever is earlier; and (B) on and after the date on which the member insurer becomes an impaired or insolvent insurer, whichever is earlier, exceeds the rate of interest determined by subtracting three percentage points from Moody's Corporate Bond Yield Average as most recently available. (c) The exclusion from coverage referenced in subitem (iii) of this subsection does not apply to any portion of a policy or contract, including a rider that provides long-term care or any other health insurance benefits.

§38-29.160. Yes. Member insurers may offset up to 20% of amount for 5 years, beginning with the year after a certificate of contribution is issued.

§ 38-29-20 (7) “Premiums” means amounts or considerations received on covered policies or contracts less returned premiums, considerations and deposits and less dividends and experience credits. 'Premiums' does not include amounts or considerations received for policies or contracts or for the portions of policies or contracts for which coverage is not provided pursuant to Section 38-29-40 except that assessable premiums may not be reduced on account of the provisions of Sections 38-29-40 relating to interest limitations and limitations with respect to one individual, one participant, and one policy or contract owner. 'Premiums' do not include premiums on an unallocated annuity contract or, with respect to multiple nongroup policies of life insurance owned by one owner, whether the policy or contract owner is an individual, firm, corporation or other person, and whether the persons insured are officers, managers, employees or other persons, premiums in excess of $5,000,000 with respect to these policies or contracts, regardless of the number of policies or contracts held by the owner.

§ 38-29-200(1) No person, including a member insurer, agent, or affiliate of a member insurer shall make, publish, disseminate, circulate, or place before the public, or cause directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in any newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio station or television station, or social media, or in any other way, an advertisement, announcement, or statement, written or oral, which uses the existence of the South Carolina Life and Accident and Health Insurance Guaranty Association for the purpose of sales, solicitation, or inducement to purchase any form of insurance or other coverage covered by this chapter. However, this section shall not apply to the South Carolina Life and Accident and Health Insurance Guaranty Association or any other entity which does not sell or solicit insurance or coverage by a health maintenance organization.