Terms Used In South Carolina Code > Title 38 > Chapter 87 - Regulation and Taxation of Risk Retention Groups and Purchasing Groups

• Admitted insurer: means an insurer licensed to do business in this State. See South Carolina Code 38-1-20
• Advice and consent: Under the Constitution, presidential nominations for executive and judicial posts take effect only when confirmed by the Senate, and international treaties become effective only when the Senate approves them by a two-thirds vote.
• Appropriation: The provision of funds, through an annual appropriations act or a permanent law, for federal agencies to make payments out of the Treasury for specified purposes. The formal federal spending process consists of two sequential steps: authorization
• Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
• Attorney-in-fact: A person who, acting as an agent, is given written authorization by another person to transact business for him (her) out of court.
• Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
• Casualty insurance: means each insurance against legal liability of the insured for bodily injury to or death of another person, including workers' compensation insurance, and for damages to or loss or destruction of the property of another person; medical payments insurance when written in conjunction with insurance covering liability for the deaths or bodily injuries of another person; guaranteeing the fidelity of a person holding a position of public or private trust; loss of or damage to property caused by burglary, theft, larceny, robbery, fraud, or unlawful taking or secretion of property owned by or entrusted to the insured; loss of or damage to property of the insured resulting from the explosion of or damage to a fired or unfired boiler or other pressure vessel, engine, turbine, compressor, pump, wheel, or an apparatus generating, transmitting, or using electric power, and machinery or equipment connected with any of them; loss resulting from nonpayment of debts owed to merchants or another person extending credit. See South Carolina Code 38-1-20
• Commissioner: means the commissioner, director, or superintendent of insurance in a state. See South Carolina Code 38-87-20
• Complaint: A written statement by the plaintiff stating the wrongs allegedly committed by the defendant.
• Completed operations liability: means liability arising out of the installation, maintenance, or repair of any product at a site which is not owned or controlled by:
  
  (a) any person who performs that work; or
  
  (b) any person who hires an independent contractor to perform that work; but includes liability for activities which are completed or abandoned before the date of the occurrence giving rise to the liability;
  
  (3) "Domicile" for purposes of determining the state in which a purchasing group is domiciled, means:
  
  (a) for a corporation, the state in which the purchasing group is incorporated; and
  
  (b) for an unincorporated entity, the state of its principal place of business;
  
  (4) "Hazardous financial condition" means that, based on its present or reasonably anticipated financial condition, a risk retention group, although not yet financially impaired or insolvent, is unlikely to be able:
  
  (a) to meet obligations to policyholders with respect to known claims and reasonably anticipated claims; or
  
  (b) to pay other obligations in the normal course of business;
  
  (5) "Insurance" means primary insurance, excess insurance, reinsurance, surplus lines insurance, and any other arrangement for shifting and distributing risk which is determined to be insurance under the laws of this State;
  
  (6) "Liability":
  
  (a) means legal liability for damages (including costs of defense, legal costs and fees, and other claims expenses) because of injuries to other persons, damage to their property, or other damage or loss to such other persons resulting from or arising out of:
  
  (i) any business (whether profit or nonprofit), trade, product, services (including professional services), premises, or operations; or
  
  (ii) any activity of any state or local government, or any agency or political subdivision thereof; and
  
  (b) does not include personal risk liability and an employer's liability with respect to its employees other than legal liability under the Federal Employers' Liability Act (45 U. See South Carolina Code 38-87-20
• Contract: A legal written agreement that becomes binding when signed.
• Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
• Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
• Department: means the Department of Insurance of South Carolina. See South Carolina Code 38-1-20
• Designee or deputy director: means the person or persons appointed by the director, serving at the will and pleasure of the director as his designee, to supervise and carry out the functions and duties of the department as provided by law. See South Carolina Code 38-1-20
• Director: means the person who is appointed by the Governor upon the advice and consent of the Senate and who is responsible for the operation and management of the South Carolina Department of Insurance, including all of its divisions. See South Carolina Code 38-87-20
• Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. ^{Source: U.S. Courts}
• Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
• Fiduciary: A trustee, executor, or administrator.
• Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. ^{Source: OCC}
• Guardian: A person legally empowered and charged with the duty of taking care of and managing the property of another person who because of age, intellect, or health, is incapable of managing his (her) own affairs.
• insurance: includes annuities. See South Carolina Code 38-1-20
• Insurance company: means an "insurer". See South Carolina Code 38-1-20
• Insurer: includes a corporation, fraternal organization, burial association, other association, partnership, society, order, individual, or aggregation of individuals engaging or proposing or attempting to engage as principals in any kind of insurance or surety business, including the exchanging of reciprocal or interinsurance contracts between individuals, partnerships, and corporations. See South Carolina Code 38-1-20
• Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
• Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). ^{Source: OCC}
• Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
• License: means a document issued by the state's director or his designee authorizing a person to act as an insurance producer for the lines of authority specified in the document. See South Carolina Code 38-1-20
• Lien: A claim against real or personal property in satisfaction of a debt.
• Litigation: A case, controversy, or lawsuit. Participants (plaintiffs and defendants) in lawsuits are called litigants.
• Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
• Oversight: Committee review of the activities of a Federal agency or program.
• Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
• Person: means a corporation, agency, partnership, association, voluntary organization, individual, or another entity, organization, or aggregation of individuals. See South Carolina Code 38-1-20
• Personal property: All property that is not real property.
• Personal risk liability: means liability for damages because of injury to any person, damage to property, or other loss or damage resulting from any personal, familial, or household responsibilities or activities, rather than from responsibilities or activities referred to in item (6);
  
  (8) "Plan of operation or a feasibility study" means an analysis which presents the expected activities and results of a risk retention group including, at a minimum:
  
  (a) information sufficient to verify that its members are engaged in businesses or activities similar or related with respect to the liability to which such members are exposed by virtue of any related, similar, or common business, trade, product, services, premises, or operations;
  
  (b) for each state in which it intends to operate, the coverages, deductibles, coverage limits, rates, and rating classification systems for each line of insurance the group intends to offer;
  
  (c) historical and expected loss experience of the proposed members and national experience of similar exposures to the extent that this experience is reasonably available;
  
  (d) pro forma financial statements and projections;
  
  (e) appropriate opinions by a qualified, independent casualty actuary, including a determination of minimum premium or participation levels required to commence operations and to prevent a hazardous financial condition;
  
  (f) identification of management, underwriting and claims procedures, marketing methods, managerial oversight methods, investment policies, and reinsurance agreements;
  
  (g) identification of each state in which the risk retention group has obtained, or sought to obtain, a charter and license, and a description of its status in each such state; and
  
  (h) such other matters as may be prescribed by the commissioner of the state in which the risk retention group is chartered for liability insurance companies authorized by the insurance laws of that state;
  
  (9) "Product liability" means liability for damages because of any personal injury, death, emotional harm, consequential economic damage, or property damage (including damages resulting from the loss of use of property) arising out of the manufacture, design, importation, distribution, packaging, labeling, lease, or sale of a product, but does not include the liability of any person for those damages if the product involved was in the possession of such a person when the incident giving rise to the claim occurred;
  
  (10) "Purchasing group" means any group which:
  
  (a) has as one of its purposes the purchase of liability insurance on a group basis;
  
  (b) purchases such insurance only for its group members and only to cover their similar or related liability exposure, as described in item (10)(c);
  
  (c) is composed of members whose businesses or activities are similar or related with respect to the liability to which members are exposed by virtue of any related, similar, or common business, trade, product, services, premises, or operations; and
  
  (d) is domiciled in any state;
  
  (11) "Risk retention group" means any corporation or other limited liability association:
  
  (a) whose primary activity consists of assuming and spreading all, or any portion, of the liability exposure of its group members;
  
  (b) which is organized for the primary purpose of conducting the activity described under item (11)(a);
  
  (c) which:
  
  (i) is chartered and licensed as a liability insurance company and authorized to engage in the business of insurance under the laws of any state; or
  
  (ii) before January 1, 1985, was chartered or licensed and authorized to engage in the business of insurance under the laws of Bermuda or the Cayman Islands and, before such date, had certified to the insurance commissioner of at least one state that it satisfied the capitalization requirements of such state, except that any such group must be considered to be a risk retention group only if it has been engaged in business continuously since such date and only for the purpose of continuing to provide insurance to cover product liability or completed operations liability (as such terms were defined in the Product Liability Risk Retention Act of 1981 before the date of the enactment of the Liability Risk Retention Act of 1986);
  
  (d) which does not exclude any person from membership in the group solely to provide for members of such a group a competitive advantage over such a person;
  
  (e) which:
  
  (i) has as its owners only persons who comprise the membership of the risk retention group and who are provided insurance by such group; or
  
  (ii) has as its sole owner an organization which has as
  
  (A) its members only persons who comprise the membership of the risk retention; and
  
  (B) its owners only persons who comprise the membership of the risk retention group and who are provided insurance by such group;
  
  (f) whose members are engaged in businesses or activities similar or related with respect to the liability of which such members are exposed by virtue of any related, similar, or common business, trade, product, services, premises, or operations;
  
  (g) whose activities do not include the provision of insurance other than:
  
  (i) liability insurance for assuming and spreading all or any portion of the liability of its group members; and
  
  (ii) reinsurance with respect to the liability of any other risk retention group (or any members of such other group) which is engaged in businesses or activities so that such group or member meets the requirement described in item (f) of this section for membership in the risk retention group which provides such reinsurance; and
  
  (h) the name of which includes the phrase "Risk Retention Group";
  
  (12) "State" means any state of the United States or the District of Columbia. See South Carolina Code 38-87-20
• Pleadings: Written statements of the parties in a civil case of their positions. In the federal courts, the principal pleadings are the complaint and the answer.
• Policy: means a contract of insurance. See South Carolina Code 38-1-20
• Premium: means payment given in consideration of a contract of insurance. See South Carolina Code 38-1-20
• Service of process: The service of writs or summonses to the appropriate party.
• Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
• Statute: A law passed by a legislature.
• Surplus lines insurance: means insurance in this State of risks located or to be performed in this State, permitted to be placed through a licensed broker, or a licensed broker as provided in § 38-45-10(8)(b)(ii), with a nonadmitted insurer eligible to accept the insurance, other than reinsurance, wet marine and transportation insurance, insurance independently procured, and life and health insurance and annuities. See South Carolina Code 38-1-20
• Terminate: means the cancellation of the relationship between an insurance producer and the insurer or the termination of a producer's authority to transact insurance. See South Carolina Code 38-1-20
• Trustee: A person or institution holding and administering property in trust.