Free South Carolina Property & Casualty practice questions

Answer: B. Thirty days

Sec. 38-75-750(b) requires that, for a policy written for a term of one year or less, the renewal terms and the premium statement reach the insured at least thirty days before the original policy expires. Forty-five days is the lead time Sec. 38-75-750(d)(2) sets only when the insurer sends the materials through the agent of record instead of to the insured directly, so it does not govern this direct mailing. Sixty days is the advance notice Sec. 38-75-740 requires when an insurer nonrenews, not when it renews. Fifteen days falls short of the thirty-day minimum.

Answer: C. Up to the $20,000 the carrier actually paid

Under Section 38-77-190, an insurer that pays a claim under the uninsured motorist provision takes over the insured's rights against anyone who caused the injury, death, or damage, but only up to the amount it paid. The carrier paid $20,000, so its subrogation right reaches $20,000. The insured's total damages, the unpaid $15,000, and the policy limit are not the measure, because the statute ties the right to the amount paid. The same section requires the insurer to pay its proportionate part of reasonable recovery costs, including reasonable attorneys' fees.

Answer: A. A misdemeanor offense under state law

South Carolina makes it a misdemeanor for any person to unlawfully solicit, negotiate, sell, collect or transmit premium for insurance with an insurer that is not licensed to do business in the State, or to take part in any other way in such a transaction. The statute grades the offense as a misdemeanor, not a felony. Because it is a criminal offense, it is neither a purely civil infraction nor a matter handled only by an administrative fine.

Answer: A. Through its regularly authorized producers who are licensed in this State

Sec. 38-43-60 requires insurers' business in South Carolina to be handled by their regularly authorized producers licensed in this State, or through applications those producers submit. A license held only in another state does not meet the requirement that the producer be licensed here, and the insurer's written designation does not stand in for that license. Salaried staff are not a substitute either: the section makes it unlawful for a salaried officer, manager or other representative to transact business on which a licensed producer earned a commission unless that person is a bona fide licensed producer.

Answer: C. Within 30 days

A South Carolina producer must tell the department within thirty days of a change in legal name. The same deadline applies to a change in the business, email, mailing or residential street address the producer supplied when applying for the license. Periods of ten, fifteen or sixty days all misstate that thirty-day requirement.

Answer: D. The company is barred from paying that person a commission for this solicitation

South Carolina bars an insurer or producer from paying a commission to someone for soliciting, selling, or negotiating insurance in the state if that person is required to hold a license and does not. A pending application is not a license. The subsection makes no exception for written disclosure to the applicant, and it makes none for a policy that has already been issued with its premium collected.

Answer: A. It is unlawful, because he is doing business for the insurer without its authority

South Carolina makes it unlawful for a producer, collector, or other person to pretend to represent a licensed insurer, or to collect or do business for it, without that insurer's authority. The rule is not limited to licensed producers, because collectors and other persons are named in it. Forwarding the money afterward does not supply the missing authority, and the section makes the conduct itself unlawful without requiring that a policyholder suffer a loss.

Answer: C. $15,000

For each violation by an insurer, pharmacy benefits manager or HMO licensed in the state, the administrative penalty statute caps the fine at $15,000, and the director may also suspend or revoke the violator's authority to do business, or both. The $30,000 ceiling applies only when the insurer's violation is willful. The $2,500 and $5,000 figures are the non-willful and willful ceilings for a licensed person other than an insurer, pharmacy benefits manager or HMO.

Answer: D. A fine of not more than $10,000, imprisonment for two years, or both

Section 38-2-30 makes performing an act without a license that Title 38 requires a misdemeanor, punishable on conviction by a fine of not more than $10,000, imprisonment for two years, or both. The $2,500 figure is the general fine for a Title 38 misdemeanor where no other penalty is specifically provided by law, and this offense carries its own specific penalty. The $5,000 and $15,000 figures are caps on administrative fines the director may impose, not the criminal penalty for acting without a required license.

Answer: A. A fine of up to $2,500, imprisonment of up to two years, or both

Unless another penalty is specifically provided by law, a person convicted of a misdemeanor defined in Title 38 may be fined not more than $2,500, imprisoned for not more than two years, or both. A $10,000 fine, a six-month term, and a $5,000 fine with a one-year term are not the default this general misdemeanor section sets.