South Carolina Code of Laws
Chapter 39 - Insurance Premium Service Companies
Section 38-39-90. Cancellation of insurance contracts by premium service company.

(a) If a premium service agreement contains a power of attorney enabling the company to cancel an insurance contract listed in the agreement, the insurance contract may not be canceled by the premium service company unless the cancellation is effectuated in accordance with this section.
(b) The premium service company shall deliver to the insured at least ten days' written notice of its intent to cancel the insurance contract if there is a default. This notice must be mailed or delivered not more than ten days before the due date.
(c) Not less than five days after the expiration of the notice required pursuant to the provisions of subsection (b), the premium service company may after that time request in the name of the insured cancellation of the insurance contract by delivering to the insurer a notice of cancellation. The insurance contract must be canceled as if the notice of cancellation had been submitted by the insured himself, but without requiring the return of the insurance contract. The premium service company also shall deliver a notice of cancellation to the insured at his last address as provided for in its records by the date the notice of cancellation is delivered to the insurer. It is sufficient to give notice either by delivering it to the person or by depositing it in the United States mail, postage prepaid, addressed to the last address of the person. Notice delivered in accordance with the provisions of this section is sufficient proof of delivery. If a notice of cancellation effected in accordance with this chapter is issued, a nonrefundable cancellation charge is permitted. The amount of the cancellation charge must be filed with and promulgated by the department.
(d) All statutory, regulatory, and contractual restrictions providing that the insurance contract may not be canceled unless notice is given to a governmental agency, mortgagee, or to holders of certificates of insurance apply where cancellation is effected pursuant to the provisions of this section; otherwise, provided the provisions of subsections (a), (b), and (c) have been met, upon receipt of the notice by the insurer, the insurance contract must be canceled effective the date of cancellation on the notice of cancellation issued by the premium service company. The insurer shall give the prescribed notice in behalf of itself or the insured to any governmental agency, mortgagee, or holders of certificates of insurance by the second business day after the day it receives the notice of cancellation from the premium service company and shall determine the effective date of cancellation taking into consideration the number of days' notice required to complete the cancellation.
(e) If an insurance contract is canceled, the insurer shall return whatever gross unearned premiums are due under the insurance contract to the premium service company which financed the premium for the account of the insured. The gross unearned premiums due on personal lines insurance contracts financed by premium service companies must be computed on a pro rata basis.
(f) If the crediting of return premiums to the account of the insured results in a surplus over the amount due from the insured, the premium service company promptly shall refund the excess to the insured or the agent of record. A refund is not required if it amounts to less than five dollars.
(g) A cancellation of an insurance contract by a premium service company must be effected exclusively by the forms, method, and timing provided for in this chapter.
(h) A payment made by an insured, or on the insured's behalf, to the agent of the insurer in an amount required by the premium service company to extend or renew financing for a renewal policy period which is made on or before the policy renewal date causes the policy to be renewed without a lapse in coverage upon receipt of the policy premium from the agent or premium service company by the insurer.
(i) The gross unearned premiums due on cancellations of personal lines insurance contracts effected pursuant to the provisions of this chapter may not be reduced by any amounts due the insurer from a prior policy term or other policies.
HISTORY: Former 1976 Code Section 38-39-90 [1962 Code Section 37-778; 1971 (57) 744] recodified as Section 38-75-390 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-27-100 [1962 Code Section 37-1310; 1967 (55) 273; 1984 Act No. 490, Section 1, 2] recodified as Section 38-39-90 by 1987 Act No. 155, Section 1; 1988 Act No. 622, Section 1; 1993 Act No. 181, Section 653; 1998 Act No. 411, Section 3; 2000 Act No. 263, Section 1; 2001 Act No. 82, Section 16, eff July 20, 2001; 2004 Act No. 268, Section 3, eff July 6, 2004.

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