South Carolina Code of Laws
Chapter 39 - Insurance Premium Service Companies
Section 38-39-80. Premium service companies may not write insurance or sell other services or commodities; service charges.

(a) A premium service company may not write any insurance or sell any other service or commodity in connection with a premium service contract, except as approved by the director or his designee for mitigation purposes.
(b) A premium service company may not charge, contract for, receive, or collect a service charge other than as permitted by this chapter.
(c) The service charge must be computed on the balance of the premiums due (after subtracting the down payment made by the insured in accordance with the premium service agreement) from the effective date of the insurance coverage, for which the premiums are being advanced, to and including the date when the final installment of the premium service agreement is payable, unless the service charge is computed as a fixed amount for each installment.
(d) An initial charge up to twenty dollars for each premium service contract, addendum, and revision is permitted, which may not be refunded upon cancellation or prepayment. The amount of the initial charge must be filed with the department.
(e) The service charge is the greater of the rate of one percent for each month computed on the remainder of the outstanding balance or an amount for each installment filed with and approved or promulgated by the department. However, if there is a cancellation by the borrower before maturity of the contract, the unearned service charge must be refunded on a short rate basis as determined by the department. With respect to the service charge for a premium service agreement which is for other than personal, family, or household purposes, the parties may contract for the payment by the debtor of a service charge at any rate, but no rate charged pursuant to the provisions of this subsection may be unconscionable. "Unconscionable" is defined as a rate substantially exceeding the usual and customary charge for financing insurance premiums.
(f) A premium service company may not induce an insured to become obligated under more than one premium service agreement for the purpose of obtaining more than one nonrefundable initial charge, and a premium service company may not intentionally cancel an insurance contract for the purpose of obtaining an additional nonrefundable initial charge on a new premium service agreement accepted within sixty days of the cancellation on the prior agreement.
(g) A premium service agreement may provide for the payment by the insured of a delinquency charge on each installment in default for a period of not less than five days of one dollar to a maximum of five percent of the installment. However, if the loan is primarily for personal family and household purposes, the amount of the delinquency charge must be filed with and approved or promulgated by the department, and may be charged on each installment in default for one or more days. Only one delinquency charge may be collected on an installment regardless of the period during which it remains in default.
(h) A premium service company may charge an amount for payments made by the borrower or on the borrower's behalf through alternative payment mechanisms. This amount must be filed with and approved or promulgated by the department.
HISTORY: Former 1976 Code Section 38-39-80 [1962 Code Section 37-782; 1971 (57) 744] recodified as Section 38-75-380 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-27-90 [1962 Code Section 37-1309; 1967 (55) 273; 1971 (57) 709, 937; 1980 Act No. 455; 1982 Act No. 378; 1983 Act No. 34; 1985 Act No. 37] recodified as Section 38-39-80 by 1987 Act No. 155, Section 1; 1988 Act No. 426; 1993 Act No. 181, Section 653; 2004 Act No. 268, Section 2, eff July 6, 2004; 2015 Act No. 47 (S.666), Section 2, eff June 3, 2015.
Effect of Amendment
2015 Act No. 47, Section 2, in (a), inserted ", except as approved by the director or his designee for mitigation purposes".

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