The American Insurance Association reported that South Carolina Gov. Mark Sanford signed into law SB 686, a flex-rating bill that could eventually eliminate prior approval for homeowners’ insurance rates.
“Today South Carolina is a more attractive market for insurers due to the free market approach to regulation taken by the state’s policymakers,” said Raymond G. Farmer, AIA assistant vice president, Southeast Region. “SB 686 is just the latest example of regulatory modernization to be implemented in the state, and should ultimately benefit policyholders as they shop for homeowners’ coverage.”
SB 686, effective upon the governor’s signature, allows insurers, within 30 days of a filing, to increase or decrease rates within a 7 percent plus or minus band without prior approval. Rate filings falling outside the 7 percent band still would require prior approval. Filings will move to a “file and use” basis only after the insurance director completes an evaluation process and certifies that a particular line of insurance (e.g. fire, allied, homeowners) is competitive.
As with all regulatory modernization proposals, AIA has measured SB 686 against its core national regulatory reform principles. It is clear that this bill will move the regulatory system in South Carolina toward a more market-based approach, which should increase competition and ultimately result in the best products for consumers at the best prices, the AIA said.
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