A bill

TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY REPEALING CHAPTER 47 OF TITLE 38 RELATING TO INSURANCE ADJUSTERS; BY REPEALING CHAPTER 48 OF TITLE 38 ENTITLED "INSURANCE ADJUSTERS" RELATING TO PUBLIC INSURANCE ADJUSTERS; BY ADDING CHAPTER 91 TO TITLE 38 ENTITLED "INSURANCE ADJUSTERS" SO AS TO DEFINE TERMS, OUTLINE LICENSURE REQUIREMENTS, ALLOW FOR NONRESIDENT LICENSES, REQUIRE AN EXAMINATION AND CONTINUING EDUCATION FOR LICENSURE, STATE STANDARDS OF CONDUCT, AND PROVIDE FOR THE DENIAL, PROBATION, REVOCATION, AND SUSPENSION OF A LICENSE, AMONG OTHER THINGS; BY ADDING CHAPTER 92 TO TITLE 38 entitled "public insurance adjusters" SO AS TO DEFINE TERMS, OUTLINE LICENSURE REQUIREMENTS, REQUIRE EXAMINATION, PROVIDE FOR RECIPROCITY, ADDRESS LICENSE RENEWAL, REINSTATEMENT, DENIAL, NONRENEWAL, AND REVOCATION, AND TO REQUIRE A BOND, CONTINUING EDUCATION, AND FEES, AMONG OTHER THINGS; AND BY AMENDING SECTION 38-1-20, RELATING TO DEFINITIONS, SO AS TO MAKE A CONFORMING CHANGE.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 1.  Chapter 47, Title 38 of the S.C. Code is repealed.

SECTION 2.  Chapter 48, Title 38 of the S.C. Code is repealed.

SECTION 3.  Title 38 of the S.C. Code is amended by adding:

CHAPTER 91

Insurance Adjusters

    Section 38-91-10. As used in this chapter, unless the context requires otherwise:

    (1) "Adjuster" means an individual, other than a public adjuster, or business entity who undertakes on behalf of insurers or self-insurers to investigate, evaluate, and negotiate the resolution of the amount of a property, casualty, crop, or workers' compensation claim or loss on behalf of an insurance policy or insurer or as a third-party on behalf of a self-insurer. Such term includes an independent contractor or an employee of:

       (a) an association;

       (b) a property and casualty producer;

       (c) an independent contractor;

       (d) an insurer; or

       (e) a managing general agent.

    (2) "Business entity" means a corporation, association, partnership, limited liability company, limited liability partnership or other legal entity.

    (3) "Director" means the Director of Insurance or his designee as defined in Section 38-1-20.

    (4) "Home state" means the District of Columbia and any state or territory of the United States in which the adjuster's principal place of residence or principal place of business is located. If neither the state in which the adjuster maintains the principal place of residence nor the state in which the adjuster maintains the principal place of business has a substantially similar law governing adjusters, the adjuster may designate another state in which he becomes licensed and acts as an adjuster to be the "home state."

    (5) "Individual" means a natural person.

    (6) "Insurer" means any type of insurer conducting business in this State and authorized in accordance with Section 38-5-180.

    (7) "Person" includes an individual or business entity as defined in Section 38-1-20.

    (8) "Self-insurer" means an individual or business entity that insures itself or risks by setting aside an amount of money to provide for any losses that occur rather than insuring such risks through an insurance company.

    (9) "Uniform individual application" means the current version of the National Association of Insurance Commissioners (NAIC) Uniform Individual Application for resident and nonresident individuals.

    (10) "Uniform business entity application" means the current version of the National Association of Insurance Commissioners (NAIC) Uniform Business Entity Application for resident and nonresident business entities.

    Section 38-91-20. (A) No individual may act or hold himself out as an adjuster in this State unless the individual is licensed as an adjuster or qualifies for one of the license exemptions set forth in this chapter. The director must satisfy himself that each applicant for an adjuster license is an individual of good moral character, has sufficient knowledge of the insurance business and his duties as an adjuster, has not violated the insurance laws of this State, and is a fit and proper individual for the position. No license may be issued to a nonresident adjuster who resides in a state refusing to license South Carolina adjusters. Individuals must apply for a license on a uniform individual application or as prescribed by the director.

    (B) No business entity may adjust losses or otherwise act as an adjuster unless the entity and the adjusters it employs are licensed by the director or qualify for one of the license exemptions set forth in this chapter. Business entities must apply for a license on a uniform business entity application or as prescribed by the director.

    (C) A person applying for an adjuster license must make application on the uniform individual application or uniform business entity application and declare under penalty of refusal, denial, suspension or revocation that the statements made in the application are true, correct, and complete to the best of the applicant's knowledge and belief.

    (D) The license must contain the adjuster's name, business address, license number, date of issuance, expiration date, and any other relevant information the director deems necessary.  An adjuster may receive qualification for a license in one or more of the following lines of authority:

       (1) property and casualty;

       (2) workers' compensation;

       (3) crop; or

       (4) such other lines as prescribed by the director.

    (E) The fee for an individual adjuster license is eighty dollars and the fee for a business entity adjuster license is forty dollars. These fees are payable in advance and fully earned when received, not refundable, transferable, nor proratable. All fees collected by the director must be paid into the state general fund in the same manner as other funds collected by him.

    (F) An adjuster license is for a biennial term and remains in effect unless revoked, terminated, suspended, or denied renewal or reinstatement.

    (G) The director may contract with nongovernmental entities, including the National Association of Insurance Commissioners (NAIC), or any affiliates or subsidiaries that the NAIC oversees, to perform any ministerial functions, including the collection of fees and data related to licensing that the director may deem appropriate.

    Section 38-91-30. When an individual or business entity applies for an adjuster license, he must supply the department his legal name, email address, and business and residential addresses. The adjuster must notify the department within thirty days of any change in the information required by this section.

    Section 38-91-40. (A) The following individuals are exempt from licensure as an adjuster:

       (1) an individual who, for portable electronics insurance, collects claim information from, or furnishes claim information to, insureds or claimants and who conducts data entry, including entering data into an automated claims adjudication system, provided that no more than twenty-five such persons are under the supervision of a licensed adjuster or a licensed producer who is otherwise exempt from licensure pursuant to item (1);

       (2) an attorney at law admitted to practice in this State, when acting in his professional capacity as an attorney;

       (3) an employee of an insurer who is not regularly engaged in the adjustment or investigation of insurance claims;

       (4) a person employed only to furnish technical assistance to a licensed adjuster including, but not limited, to an investigator, an attorney, an engineer, an estimator, a handwriting expert, a photographer, and a private detective;

       (5) a producer of an authorized insurer or a licensed employee of a producer who processes an undisputed or uncontested loss for the insurer under a policy issued by the producer;

       (6) a person who performs solely clerical duties and does not negotiate with parties on disputed or contested claims or otherwise perform the duties of an adjuster;

       (7) a person who handles claims arising under life, accident and health or sickness insurance policies;

       (8) an individual who is employed to investigate suspected fraudulent insurance claims but who does not adjust losses or determine claims payments;

       (9) a person who handles claims arising under service contracts;

       (10) a person handling commercial claims for excess coverages;

       (11) a person who settles only reinsurance or subrogation claims;

       (12) a full-time salaried employee of a self-insurer; and

       (13) a person authorized to adjust worker's compensation or disability claims under the authority of a third-party administrator (TPA) license pursuant to Chapter 51.

    (B) For purposes of this section, "automated claims adjudication system" means a preprogrammed computer system designed for the collection, data entry, calculation, and final resolution of portable electronics insurance claims that:

       (1) only may be used by a licensed adjuster, licensed producer, or supervised individuals operating pursuant to this section;

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