South Carolina Department of Insurance (SCDOI)

The South Carolina Department of Insurance (SCDOI) is the state agency responsible for regulating the Property & Casualty insurance industry in South Carolina. The Department operates under the executive branch of state government.

The Director of Insurance

The Director of Insurance is:

• Appointed by the Governor
• Serves at the pleasure of the Governor (no fixed term)
• Responsible for enforcing South Carolina Code of Laws Title 38 (Insurance)
• Authorized to adopt regulations, review rate filings, investigate violations, and discipline licensees
• Supported by Department staff and division directors

Director Powers for P&C Insurance

Exam Tip: The Director is APPOINTED by the Governor, not elected. This is a common exam question. The Director serves at the Governor's pleasure with no fixed term.

Rate Regulation System

South Carolina uses a file-and-use rating system for most P&C insurance:

Key Provisions

• File-and-Use: Insurers file rates with the Department and can use them immediately (no prior approval required for most lines)
• Post-Use Review: Department can review rates after implementation
• Rate Standards: Rates must not be excessive, inadequate, or unfairly discriminatory
• Rate Filing Requirements: Insurers must file rates and supporting actuarial data
• Disapproval Authority: Director can disapprove rates that violate standards

File-and-Use Process

1. Insurer Files Rates: Submits rate filing with actuarial support to SCDOI
2. Immediate Use: Can implement rates without waiting for approval (most lines)
3. Department Review: SCDOI reviews filing for compliance with statutory standards
4. Objection Period: Department may disapprove if rates violate standards
5. Rate Adjustment: Insurer must adjust rates if Department objects

Exceptions to File-and-Use:

• Workers' compensation rates require prior approval
• Certain high-risk categories may require prior approval
• Director can require prior approval for specific circumstances

Exam Tip: South Carolina's file-and-use system allows insurers to implement rates immediately for most P&C lines, but workers' compensation requires prior approval.

South Carolina Insurance Law Structure

South Carolina Code of Laws Title 38 - Insurance

South Carolina insurance regulation is codified in Title 38, which covers:

Chapter 1 - General Provisions

• Definitions and general provisions
• Department of Insurance organization
• Director authority and responsibilities
• Administrative procedures

Chapter 2 - Taxation of Insurance Companies

• Premium tax requirements
• Tax exemptions and credits
• Filing and payment procedures

Chapter 3 - Domestic, Foreign, and Alien Insurers

• Insurer licensing and authorization
• Capital and surplus requirements
• Annual reporting and examinations

Chapter 5 - Regulation of Insurance Companies

• Policy form approval requirements
• Rate filing procedures
• Financial requirements
• Market conduct standards

Chapter 7 - Regulation of Particular Kinds of Insurance

• Property insurance provisions
• Casualty insurance requirements
• Liability insurance standards
• Specialized coverage regulations

Chapter 41 - Casualty and Surety Insurance

• Auto insurance requirements
• Liability insurance provisions
• Uninsured/underinsured motorist coverage

Chapter 43 - Insurance Producers

• Producer licensing requirements
• Continuing education mandates
• Prohibited practices
• License renewal procedures

Chapter 57 - Insurance Fraud

• Criminal penalties for fraud
• Reporting requirements
• Investigation procedures
• Civil remedies

Chapter 73 - Unfair Trade Practices

• Prohibited practices (rebating, twisting, etc.)
• Unfair claim settlement practices
• Penalties and enforcement

Exam Tip: Title 38 is the primary source of South Carolina insurance law. Chapter 43 covers producer licensing, and Chapter 73 covers unfair trade practices—both heavily tested areas.

Department Organization

The South Carolina Department of Insurance is organized into several divisions:

Key Divisions

Consumer Services Division

• Handles consumer complaints
• Provides consumer education
• Assists with insurance questions
• Mediates disputes between consumers and insurers

Licensing Division

• Issues producer licenses
• Processes license applications
• Monitors continuing education compliance
• Handles license renewals and reinstatements

Company Licensing Division

• Reviews insurer applications
• Monitors insurer financial condition
• Conducts financial examinations
• Reviews annual statements

Legal Division

• Prosecutes violations of insurance law
• Represents Department in administrative hearings
• Provides legal advice to Director
• Drafts regulations and bulletins

Actuarial Division

• Reviews rate filings
• Analyzes insurer financial data
• Ensures rate adequacy and compliance
• Monitors loss reserves

Market Conduct Division

• Conducts market conduct examinations
• Investigates business practices
• Ensures compliance with laws and regulations
• Takes enforcement action when necessary

Consumer Protection Functions

South Carolina's Department emphasizes protecting insurance consumers:

Key Consumer Protections

Complaint Handling

• Toll-free hotline: (800) 768-3467
• Online complaint filing available
• Investigation of consumer complaints
• Mediation services between consumers and insurers
• Annual report of complaint statistics

Market Conduct Oversight

• Regular examinations of insurer practices
• Review of claim handling procedures
• Monitoring of policy cancellations
• Enforcement of fair treatment standards

Rate Regulation

• Review of rate filings for fairness
• Prevention of excessive rates
• Ensuring rate adequacy for insurer solvency
• Prohibition of unfairly discriminatory rates

Policy Form Approval

• Review of policy forms for compliance
• Ensuring policy language clarity
• Protection against unfair policy terms
• Standardization where appropriate

Exam Tip: Consumer protection is a primary function of the South Carolina Department of Insurance. Know the toll-free consumer hotline: (800) 768-3467.