Premium Service Company
Who is exempted from applying for an insurance premium service company license in this State?
- An insurer authorized to transact insurance business in this state.
- A banking institution, savings and loan association, cooperative credit union, consumer finance company authorized to do business in this State, or a supervised lender provided for in Title 37 of the SC Code of Laws authorized to do business in this State.
- The inclusion of a charge for insurance in connection with an installment sale of goods or services.
- The advancing of premiums by insurance agents and producers of record under Article 3 of Chapter 43 of this title. Section 38-39-10
What is the license fee for an insurance premium service company?
The annual license fee is $500 payable to the Department by March 1st.
Section 38-39-20(b)
How long does a premium service company have to keep its records?
Every licensed insurance premium service company must keep and maintain its records for at least three years after making the final entry on any premium service agreement. The records must be open to examination and investigation at any time by the Department. Section 38-39-50
What items must be included on an insurance premium service agreement?
The premium service agreement must:
- Be printed in at least an eight point font.
- Be dated and signed by the insured.
- Contain the name and place of business of the insurance agent or insurance broker negotiating the related insurance contract.
- Contain the name and residence or the place of business of the insured as specified.
- Contain the name and place of business of the premium service company to which payments are to be made.
- Contain a description of the insurance contracts involved, the amount of the premium and shall set forth the following, where applicable:
a. The total amount of the premiums.
b. The amount of the down payment.
c. The principal balance.
d. The amount of the service charge.
e. The balance payable by the insured.
f. The number of installments required, the amount of each installment
expressed in dollars and the due date. Section 38-39-70
What are the cancellation procedures for an insurance premium service company?
The premium service company must deliver to the insured a ten-day notice of its intent to cancel the insurance contract. Not less than five days after the expiration of the notice, the insurance premium service company may request in the name of the insured cancellation of the insurance contract by delivering the notice of cancellation to the insurer. Section 38-39-90
What is the maximum fee an insurance premium service company can charge on a delinquent account?
The maximum fee of a delinquent account may not exceed 5% of the installment.
Section 38-39-80(g)
How much is the initial charge for an insurance premium contract?
The initial charge for an insurance premium contract can be up to $20, which may not be refunded. Section 38-39-80(d)
Can an insurance premium service company charge the non-refundable fee twice?
An insurance premium service company cannot induce an insured to become obligated under more than one premium service agreement for the purpose of obtaining more than one non-refundable charge. And also, an insurance premium service company cannot intentionally cancel an insurance contract for the purpose of obtaining an additional non-refundable charge on a new premium service agreement accepted within sixty days of the cancellation of the prior agreement. Section 38-39-80(f)
What happens if a policy is cancelled and there is a premium credit?
If the crediting of return premiums to the insured’s account results in a surplus over the amount due from the insured, the insurance premium service company must refund the excess to the insured or the agent of record. A refund is not required if it amounts to less that $5. Section 38-39-90(f)
What are the procedures if the owner or partner of an insurance premium service company dies; withdraws from the company; is arrested, indicted or convicted by State or Federal law enforcement; has their license suspended; or files for bankruptcy?
The Department must be notified by registered or certified mail no later than 10 days after the event occurs. Regulation 69-10-12