(A) The association shall operate pursuant to a plan of operation which provides for the following:

(1) the number, qualifications, terms of office, and manner of election of the members of the board of directors, provided that four members of the board of directors must be consumers who are representative of business policyholders, residential single-family dwelling policyholders, and apartment, condominium, or multiple-family dwelling policyholders, and who are selected from recommendations from the members of the legislative delegations from the seacoast area;

(2) the efficient, economical, fair, and nondiscriminatory administration of the association;

(3) the prompt and efficient provision of essential property insurance in the coastal areas of the State;

(4) the manner of election of officers;

(5) the establishment of necessary facilities;

(6) the management of the association;

(7) the assessment of members to defray losses and expenses;

(8) reasonable underwriting standards, rating subdivisions, and rates including, but not limited to, developing multiple-tiered rates within the coastal area territory that reflect the relative risks of the properties located within a particular tier;

(9) commissions to be paid to agents or brokers;

(10) procedures for an open, competitive process for the acceptance and cession of reinsurance, provided that the association is not required to follow the provisions of the South Carolina Consolidated Procurement Code, and for determining the amounts of insurance to be provided to specific risks;

(11) time limits and procedures for processing applications for insurance; and

(12) other provisions considered necessary by the director or his designee to carry out the purposes of this article.

(B) Insurance effected pursuant to this article must have limits of liability provided in the plan of operation. The director or his designee shall approve the limits. Excess insurance is not permitted until the maximum available under the plan has been purchased. After that, excess insurance may be purchased and must be included for the purpose of meeting any coinsurance requirement.

(C) The board of the association, subject to the approval of the director or his designee, may amend the plan of operation at any time. The director or his designee shall review the plan of operation annually. The director or his designee shall review the rate structure and loss experience semi-annually in accordance with Section 38-75-400. After review of the plan, the director or his designee may amend the plan and the amendment takes effect immediately upon ratification by the board.

HISTORY: Former 1976 Code Section 38-39-50 [1962 Code Section 37-777; 1971 (57) 744; 1972 (57) 2736; 1976 Act No. 460; 1978 Act No. 562] recodified as Section 38-75-340 by 1987 Act No. 155, Section 1; 1993 Act No. 181, Section 793; 2007 Act No. 78, Section 10, eff June 11, 2007, applicable to taxable years beginning after December 31, 2006.