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2018 Legislative Recap

Second regular session of the 122nd South Carolina General Assembly

The 2nd Regular Session of the 122nd South Carolina General Assembly adjourned Sine Die on May 10, but lawmakers will return to Columbia for special sessions to address unfinished business—including finalizing the state's $8 billion budget proposal, dealing with gubernatorial vetoes and bills relating to the failed V.C. Summer nuclear project.

All insurance-related legislation is done for the year—either passing or dying in place. Anything that did not pass in 2018 will have to be re-introduced in 2019 when the 123rd General Assembly convenes.


Notable Legislation that Passed, Affecting Agents the Most

Agent Fingerprinting
(H 4654)
This issue was the number one priority for the Big “I”. This bill clarifies that once agents have submitted fingerprint records—they do not have to repeat the fingerprint submission on subsequent license renewals. For most agents, that means submitting fingerprint records during their license renewal in 2017 or 2018 or when they first apply as new licensee.

This bill also updated the language and definitions for some of the requirements to become a licensed producer. The updated statute deletes the language “crime involving moral turpitude” and now says a license applicant must be “a person of good moral character and has not been convicted of a felony or any act within the last ten years that is a ground for denial, suspension, or revocation as provided for in Section 38-43-130 or been convicted of a misdemeanor involving dishonesty, breach of trust, or other financial- or insurance-related crime within five years”.


Insurance Data Security Act (Cyber Security)
(H 4655)
South Carolina is the first state to pass this comprehensive data security legislation that was championed by the National Association of Insurance Commissioners (NAIC). SC Director of Insurance Ray Farmer chaired the NAIC sub-committee that drafted the model bill.

This new data security law applies to all insurance licensees (insurance companies, agencies, MGAs) that have 10 or more employees.

Agencies with nine or fewer staff are exempt, and if your agency is already compliant with HIPAA regulations then your agency is exempt from any new requirements in this statute.

Licensees will be required to develop a security plan, train staff, understand data security exposures and risk, and be prepared to respond to a data breach in their organization. The basic requirements of this statute must be implemented by July 1, 2019.

IIABSC, with our national association and the Agents Council on Technology (ACT), has already begun working on identifying and developing resources that agencies can use to satisfy the requirements of this new law. The DOI is also expected to issue more guidance and direction regarding this legislation. Stay tuned—more to come!


Administrative procedures
(H 4657)
This bill primarily updates and amends the statute regarding DOI investigations and some of the penalties and requirements tied to DOI regulation.

The biggest change affecting agents is when the DOI initiates an inquiry or requests information for an investigation. Agents/agencies must respond to the DOI request within seven calendar days. It is ok to request additional time to gather records or otherwise comply with the DOI request, but agents should be in touch with the DOI representative within that seven-day window. It is up to the DOI whether to grant an extension on providing the requested information.


Reinsurance Accreditation
(H 4656)
Authorizes the DOI to adopt requirements and standards for reinsurance credits and require a reinsurer to demonstrate it has adequate financial capacity to meet its reinsurance obligations. This legislation was important for the DOI to maintain is accredited status.


Vision screening for Driver Licenses
(H 4672)
This legislation reinstates the previously eliminated requirement of a vision test when renewing a South Carolina driver’s license.


Legislation that did not pass

Continuing Education requirements and NAIFA
(H 4523)
This legislation would have made the National Association of Insurance and Financial Advisors (and their South Carolina chapter) the exclusive provider for the Ethics CE requirement in South Carolina. ALL insurance agents would have had to take their three-hour ethics CE requirement through NAIFA.

IIABSC opposed this legislation.


Flood mitigation program
(S 11)
This proposed an expansion of the SC Safe Home program—adding more funding to the program and expanding the mitigation efforts to flood exposures.

IIABSC supported this legislation.


Primary Liability for rental cars
(H 4070)
This was a proposal to make individual auto policies primary coverage when renting a vehicle in South Carolina.

IIABSC opposed this legislation.


Driving While Under the Influence of an Electronic Device (DUI-E)
(H 4480)
Expanded the scope and penalties of using an electronic device while driving.

IIABSC supported this legislation.


IIABSC President G. Frank Sheppard, AAI, CAE

By G. Frank Sheppard, AAI, CAE, IIABSC President

Please contact Frank If you have questions or concerns about any legislative issues. Call 803-760-1239 or email him. ​​​