South Carolina Property, Casualty, Surety and Marine Adjuster Practice Test: South Carolina law, Part 2

Correct answer: C. She may not act as a public adjuster while licensed as an adjuster under Chapter 47

Section 38-48-90(B) says no independent adjuster or adjuster licensed under Chapter 47 may act as a public insurance adjuster, and no public adjuster may represent an insurer. NIPR's South Carolina rules add that an applicant may not hold adjuster and public adjuster licenses at the same time, so Rachel would need to give up her adjuster license and obtain a public adjuster license to represent insureds.

Reference: S.C. Code 38-48-90(B); NIPR South Carolina resident licensing rules

Correct answer: B. $50,000

South Carolina's minimum limits are $25,000 per person and $50,000 per accident for bodily injury, plus $25,000 for property damage. The first claimant is capped at $25,000, and the other two are paid in full: $25,000 + $15,000 + $10,000 = $50,000, which also equals the per-accident limit. The remaining $5,000 is Ellis's personal responsibility.

Reference: S.C. Code 38-77-140(A)

Correct answer: B. $4,400

Section 38-77-150 requires the uninsured motorist provision to provide at least $25,000 for damage to the insured's property in one accident and allows an exclusion of the first $200 of the loss. With the exclusion, UM pays $4,600 - $200 = $4,400. Because she has no collision coverage, nothing else has compensated her, so Section 38-77-210 does not reduce the payment.

Reference: S.C. Code 38-77-150(A); S.C. Code 38-77-210

Correct answer: D. The consent clause is unenforceable, because UIM policies may not require consent to settle

Section 38-77-160 states that no underinsured motorist policy may contain a clause requiring the insurer's consent to settlement with the at-fault party. When the liability insurer settles by paying its limits, the UIM insurer may assume control of the defense for its own benefit, but it cannot deny coverage under a prohibited consent clause. Insurers must offer UIM up to the insured's liability limits.

Reference: S.C. Code 38-77-160

Correct answer: A. Yes, a prompt police report plus a recording showing the unknown car caused the crash can qualify

When the at-fault vehicle is unknown, Section 38-77-170 requires a report to police within a reasonable time, that the insured was not negligent in failing to identify the other vehicle, and one of three proofs: physical contact, a witness other than the owner or operator of the insured vehicle who signs an affidavit, or a recording showing the unknown vehicle caused the injury or damage. Mei's video supplies the third proof.

Reference: S.C. Code 38-77-170(A)

Correct answer: B. It is null and void without the approved disclosure and a three-day waiting interval

Section 38-77-260 bars insurers paying first-party auto benefits, including medical payments and uninsured motorist coverage, from obtaining a release, covenant not to sue or assignment of the claimant's claims against other parties, unless the insurer first delivers a disclosure statement on an approved form and at least three days pass between the later of that delivery or the payment and the signing. Without both, the document is null and void.

Reference: S.C. Code 38-77-260(a)

Correct answer: D. Two of three attorney arbitrators decide; a party may appeal within 20 days for a trial de novo

The court appoints a panel of attorney arbitrators; three hear each case and the decision of two controls, unless the parties agree to a single arbitrator. The claimant pays a $10 filing fee, and the defendant has 30 days to respond. A dissatisfied party may appeal within twenty days by serving a notice of appeal stating it is taken in good faith, and the appeal is tried de novo.

Reference: S.C. Code 38-77-720, 38-77-730, 38-77-770

Correct answer: C. $47,750

The association's obligation covers only the amount of each covered claim in excess of $250 and less than $300,000; workers compensation claims are paid in full. Corinne receives $48,000 - $250 = $47,750. A separate $100 deductible applies only to unearned premium refunds. Under Section 38-31-100, any other available insurance must be exhausted first, but Corinne has none.

Reference: S.C. Code 38-31-60(a); S.C. Code 38-31-100

Correct answer: A. It is not a covered claim, because it was filed more than 18 months after the declaration

A covered claim does not include one filed with the association after the court's final date for claims against the liquidator, or more than eighteen months after the declaration of insolvency, whichever occurs first. Here the 18-month limit came first, so the association owes nothing, although Hiroshi may still file with the liquidator. The court's later deadline does not extend the association's limit.

Reference: S.C. Code 38-31-60(a)

Correct answer: C. A manufacturing plant

The association is a residual market mechanism for residential and commercial owners who cannot buy wind and hail coverage in the coastal area. Insurable property means real property at fixed coastal locations, or personal property in it, in insurable condition, but excludes farm and manufacturing property and highway-licensed motor vehicles. Applications must be made through a licensed agent or broker under Section 38-75-350.

Reference: S.C. Code 38-75-310(4), 38-75-330, 38-75-350

Correct answer: B. 10 days for nonpayment of premium; 30 days for other permitted reasons

After the first 120 days, a policy may be canceled only for listed reasons such as nonpayment, material misrepresentation or a substantial change in the risk. Notice must be at least 10 days for nonpayment and 30 days for the other reasons, and it must state the precise reason. Nonrenewal requires 60 days' notice under Section 38-75-740, and Section 38-75-790 bars nonrenewing homeowners policies over act-of-God claims.

Reference: S.C. Code 38-75-730, 38-75-740, 38-75-790

Correct answer: C. The Insurance Fraud Division of the Office of the Attorney General

Section 38-55-570 requires any person or insurer with reason to believe a false statement or misrepresentation was made to notify the Insurance Fraud Division of the Office of the Attorney General, which refers cases to SLED for investigation. Reporters acting without malice or in good faith are immune from liability under Section 38-55-580. The Department of Insurance reports suspected fraud to the division but does not adjudicate it.

Reference: S.C. Code 38-55-560, 38-55-570, 38-55-580

Correct answer: D. A plumbing contractor that regularly employs three workers

Section 42-1-360 excludes an employer that regularly employs fewer than four employees in the same business in South Carolina, or whose total payroll in the previous calendar year was under $3,000. The plumbing contractor has only three workers, so it is exempt unless it files an election with the Commission under Section 42-1-380. Four regular employees is enough for coverage, and counties are covered under Section 42-1-150.

Reference: S.C. Code 42-1-360(2), 42-1-150, 42-1-380

Correct answer: C. $1,680

Total disability benefits are 66 2/3% of the average weekly wage: $840 x 2/3 = $560 a week. No compensation is paid for the first seven days unless the disability lasts more than fourteen days, in which case it is paid from the date of disability. Andre's 21 days exceed 14, so all three weeks are paid: 3 x $560 = $1,680. Deducting the waiting week gives the wrong $1,120.

Reference: S.C. Code 42-9-10(A); S.C. Code 42-9-200

Correct answer: A. $5 million

The Secretary of the Treasury, in consultation with the Secretary of Homeland Security and the Attorney General, certifies acts of terrorism, but no act may be certified if property and casualty losses do not exceed $5 million in aggregate. The $200 million figure is the separate program trigger that industry losses from certified acts must exceed before federal payments begin. The program runs through December 31, 2027.

Reference: Terrorism Risk Insurance Act of 2002, sections 102(1) and 103(e), as amended (15 U.S.C. 6701 note)