SC| The South Carolina Department of Insurance issued Bulletin 2025-04 to notify all insurers licensed in the state of significant amendments to Chapters 12 and 21 of Title 38, effective May 8, 2025, which impact regulatory oversight, investment limitations, and risk assessment requirements. The amendments to the Insurance Holding Company Regulatory Act introduce enhanced enterprise risk assessment tools, including a group capital calculation and a liquidity stress test, expand disclosure and reporting standards for transactions within holding company systems, and clarify confidentiality provisions. Changes to the Investments of Insurers Act redefine “person” for investment limits to include affiliates and subsidiaries, impose stricter five percent single issuer limitations on insurer investments, and reinforce the Director’s authority to intervene in insurer investment practices to protect policyholders and the public. Amendments were effective May 8, 2025.
Key Points:
- Enhanced risk oversight: Insurers in holding company systems must now comply with group capital calculations and, in some cases, liquidity stress tests, providing regulators with more comprehensive tools to assess systemic risks and capital adequacy.
- Stricter investment limits: The definition of “person” for investment limitations now includes affiliates and subsidiaries, and life, health, property, and casualty insurers face a five percent cap on investments with a single issuer group, with limited exceptions.
- Expanded regulatory authority and reporting: New standards require advance notification for certain intra-group transactions, clarify disclosure and confidentiality rules, and grant the Director broader authority to limit or require divestment from risky investments to protect policyholders.