Contingent Deferred Annuities

2025-2026 Bill 5094: Contingent Deferred Annuities - South Carolina Legislature Online

South Carolina General Assembly
126th Session, 2025-2026
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H. 5094
STATUS INFORMATION
General Bill
Sponsors: Rep. Ligon
Companion/Similar bill(s): 857
Document Path: LC-0620WAB26.docx
Introduced in the House on February 4, 2026
Currently residing in the House Committee on
Labor, Commerce and Industry
Summary: Contingent Deferred Annuities
HISTORY OF LEGISLATIVE ACTIONS

Date

Body

Action Description with journal page number

2/4/2026

House

Introduced and read first time (
House Journal-page 11
)

2/4/2026

House

Referred to Committee on
Labor, Commerce and Industry
(
House Journal-page 11
)

View the latest
legislative information
at the website
VERSIONS OF THIS BILL
02/04/2026

A bill

TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY AMENDING
SECTION
38-1-20
, RELATING TO INSURANCE LAW DEFINITIONS, SO AS TO DEFINE THE
TERM "CONTINGENT DEFERRED ANNUITY"; BY AMENDING SECTION
38-69-220
, RELATING TO
EXCEPTIONS FROM OPERATION OF THE STANDARD NONFORFEITURE LAW FOR INDIVIDUAL
DEFERRED ANNUITIES, SO AS TO ADD AN EXCEPTION FOR CERTAIN PROVISIONS OF THE
STANDARD NONFORFEITURE LAW FOR INDIVIDUAL DEFERRED ANNUITIES, AND TO PROVIDE
THE DEPARTMENT OF INSURANCE MAY PROMULGATE REGULATIONS FOR NONFORFEITURE BENEFITS
FOR CONTINGENT DEFERRED ANNUITIES IN THE DISCRETION OF THE DIRECTOR OF THE
DEPARTMENT IN CERTAIN CIRCUMSTANCES; AND BY AMENDING SECTION
38-44-20
, RELATING
TO DEFINITIONS IN THE MANAGING GENERAL AGENTS ACT, SO AS TO MAKE A CONFORMING
CHANGE.

B
e it enacted by the
General Assembly of the State of South Carolina:

S
ECTION 1.
S
ection
38-1-20
of the S.C. Code is amended to read:

S
ection
38-1-20
.
A
s used in this title, unless the context
otherwise requires:

(
1)
"Accident and health insurance" means insurance of human beings against death
or personal injury by accident, and each insurance of human beings against
sickness, ailment, and any type of physical disability resulting from accident
or disease, and prepaid dental service, but not including coverages required by
the Workers' Compensation Law of this State.

(
2)
"Accommodation bondsman" means as defined in Section
38-53-10
.

(
3)
"Adjuster" means an individual who determines the extent of insured losses and
assists in settling or attempts to settle claims.

(
4)
"Admitted assets" means assets of an insurer considered admitted on the most
recent statutory financial statement of the insurer filed with the department
pursuant to Section
38-13-80
.

(
5)
"Admitted insurer" means an insurer licensed to do business in this State.

(
6)
"Alien insurer" means an insurer incorporated or organized under the laws of a
country other than the United States of America, its states, commonwealths,
territories, or insular possessions.

(
7)
"Annuity" means each contract or agreement to make periodic payments, whether
in fixed or variable dollar amounts, or both, at specified intervals.

(
8)
(
a) "Appointment" means an individual
designated by an official or authorized representative of an authorized insurer
to act on its behalf as a producer.

(
b)
"General appointment" means an appointment of a person who, as a representative
of an insurer or insurers, is vested with authority to supervise producers and
to exercise this management authority as is delegated to him by the principal.
A producer appointed as a general also may perform the duties of a producer who
holds a local or special appointment.

(
c)
"Local appointment" means an appointment of a producer who has been authorized
by an insurer to sell, solicit, or negotiate policies on an insurer's behalf.

(
d)
"Special appointment" means an individual designated by an insurer to supervise
and assist other producers in the proper discharge of their duties under an
insurer's policy contract. A special appointment grants no authority to sell,
solicit, or negotiate policies of insurance on behalf of an insurer.

(
9)
"Bail bondsman" means as defined in Section
38-53-10
.

(
10)
"By" means on or before.

(
11)
"Casualty insurance" means each insurance against legal liability of the
insured for bodily injury to or death of another person, including workers'
compensation insurance, and for damages to or loss or destruction of the
property of another person; medical payments insurance when written in
conjunction with insurance covering liability for the deaths or bodily injuries
of another person; guaranteeing the fidelity of a person holding a position of
public or private trust; loss of or damage to property caused by burglary,
theft, larceny, robbery, fraud, or unlawful taking or secretion of property
owned by or entrusted to the insured; loss of or damage to property of the
insured resulting from the explosion of or damage to a fired or unfired boiler or
other pressure vessel, engine, turbine, compressor, pump, wheel, or an
apparatus generating, transmitting, or using electric power, and machinery or
equipment connected with any of them; loss resulting from nonpayment of debts
owed to merchants or another person extending credit.

(
12)
"Certificate of insurance" means a memorandum copy, complete or abbreviated, of
an insurance contract.

(
13)
"Coinsurance" means a stipulation or requirement that the insured undertakes to
be his own insurer to the extent that he fails to maintain insurance of a given
percentage of the value of the property against loss or damage.

(
14)
"Commission" means the part of the premium paid to the producer as compensation
for his services.

(
15)
"Company" includes a corporation, fraternal organization, burial association,
other association, partnership, society, order, individual, or aggregation of
individuals engaging or proposing or attempting to engage as principals in any
kind of insurance or surety business, including the exchanging of reciprocal or
interinsurance contracts between individuals, partnerships, and corporations.

(
16) "Contingent deferred annuity"
means an annuity contract that establishes a life insurer's obligation to make
periodic payments for the annuitant's lifetime at the time-designated
investments, which are not owned or held by the insurer, are depleted to a
contractually defined amount due to contractually permitted withdrawals, market
performance, fees, or other charges.

(16)
(
17)
"Crop insurance" includes insurance providing
protection against damage to crops from unfavorable weather conditions, fire,
lightning, flood, hail, insect infestation, disease, or other yield-reducing
conditions or perils provided by the private insurance market, or that is
subsidized by the Federal Crop Insurance Corporation, including Multi-Peril
Crop Insurance.

(17)
(
18)
"Department" means the Department of Insurance of
South Carolina.

(18)
(
19)
"Designee or deputy director" means the person or
persons appointed by the director, serving at the will and pleasure of the
director as his designee, to supervise and carry out the functions and duties
of the department as provided by law. A duty or function of the director to
manage and supervise the department may be conferred by the director's
authority upon his designee or deputy director.

(19)
(
20)
"Director" means the person who is appointed by the
Governor upon the advice and consent of the Senate and who is responsible for
the operation and management of the department. The director has the authority
to appoint or designate the person or persons who shall serve at the pleasure
of the director to carry out the objectives or duties of the department as
provided by law. Furthermore, the director may bestow upon his designee or
deputy director a duty or function required of him by law to manage and supervise
the department.

(20)
(
21)
"Domestic insurer" means an insurer incorporated or
organized under the laws of this State.

(21)
(
22)
"Eligible surplus lines insurer" means a nonadmitted
insurer with which a licensed broker, or a licensed producer as provided in
Section
38-45-10
(8)(b)(ii), may place surplus lines insurance.

(22)
(
23)
"Exempt commercial policies" means policies for
commercial insureds as may be provided for in regulation issued by the
director. Exempt commercial policies include all property and casualty
coverages except for insurance related to credit transactions written through
financial institutions.

(23)
(
24)
"Foreign insurer" means an insurer incorporated or
organized under the laws of the United States or of any jurisdiction within the
United States other than this State.

(24)
(
25)
"Home state" means the District of Columbia and a
state or territory of the United States in which an insurance producer
maintains his principal place of residence or principal place of business and
is licensed to act as an insurance producer.

(25)
(
26)
"Insurance" means a contract where one undertakes to
indemnify another or pay a specified amount upon determinable contingencies.
The term "insurance" includes annuities.

(26)
(
27)
"Insurance agency" means a corporation, association,
partnership, limited liability company, limited liability partnership, or other
legal entity in which more than one person has a financial interest.

(27)
(
28)
"Insurance broker" means an individual licensed by
the department to represent citizens of this State in placing their insurance.
An insurance broker may place that insurance either with an eligible surplus
lines insurer or with a licensed insurance producer in an insurance carrier
licensed in this State.

(28)
(
29)
"Insurance company" means an "insurer."

(29)
(
30)
"Insurance premium service company" means a person
engaged in the business of entering into insurance premium service agreements.

(30)
(
31)
"Insurance producer" or "producer" means a person who
represents an insurance company and is required to be licensed pursuant to
Section
38-43-10
.

(31)
(
32)
"Insurance rate" means the price of insurance for
each unit of exposure.

(32)
(
33)
"Insurance-support organization" means a person who
regularly engages, in whole or in part, in the practice of assembling or
collecting information about natural persons for the primary purpose of
providing the information to an insurer or agent for insurance transactions,
including:

(
i)
the furnishing of consumer reports or investigative consumer reports to an
insurer or agent for use in connection with an insurance transaction; or

(
ii)
the collection of personal information from insurers, agents, or other
insurance-support organizations for the purpose of detecting or preventing
fraud, material misrepresentation, or material nondisclosure in connection with
insurance underwriting or insurance claim activity. However, the following are
not considered insurance-support organizations for purposes of this chapter:
agents, governmental institutions, insurers, modeling organizations, consumer
reporting agencies, medical care institutions, and medical professionals.

(33)
(
34)
"Insurer" includes a corporation, fraternal
organization, burial association, other association, partnership, society,
order, individual, or aggregation of individuals engaging or proposing or
attempting to engage as principals in any kind of insurance or surety business,
including the exchanging of reciprocal or interinsurance contracts between
individuals, partnerships, and corporations.

(34)
(
35)
"License" means a document issued by the state's
director or his designee authorizing a person to act as an insurance producer
for the lines of authority specified in the document. The license itself does
not create any authority, actual, apparent or inherent, in the holder to
represent or commit an insurance carrier.

(35)
(
36)
"Life insurance" means a contract of insurance upon
the lives of human beings. The following contracts are considered to be
contracts of life insurance within the meaning of this definition:

(
a)
a contract providing acceleration of life benefits, beginning on the contract's
original effective date, in advance of the time they otherwise would be payable
for long-term care as defined in Section
38-72-40
;

(
b)
a contract providing acceleration of life benefits, beginning on the contract's
original effective date, in advance of the time they otherwise would be payable
for a life-threatening illness or a terminal illness as specified in the
contract.

(36)
(
37)
"Limited line credit insurance" includes credit life,
credit disability, credit property, credit unemployment, involuntary
unemployment, mortgage life, mortgage guaranty, mortgage disability, guaranteed
automobile protection insurance, and another form of insurance offered in
connection with an extension of credit that is limited to partially or wholly
extinguishing that credit obligation that the director or his designee
determines should be designated a form of limited line credit insurance.

(37)
(
38)
"Limited line credit insurance producer" means a
person who sells, solicits, or negotiates one or more forms of limited line
credit insurance coverage to individuals through a master, corporate, group, or
individual policy.

(38)
(
39)
"Limited line insurance" includes crop, travel
surety, Federal Crop Insurance Program, and any other form of insurance that
the director considers necessary in order to ensure compliance with the
reciprocal provisions of this chapter.

(39)
(
40)
"Limited line insurance producer" means a person
authorized by the director or his designee to sell, solicit, or negotiate
limited line insurance.

(40)
(
41)
"Marine insurance" means each insurance against loss
or destruction of or damage to aircraft, vessels, or watercraft and their
cargoes; insurance covering the risks or perils of navigation, transit, or
transportation of all forms of property, including the liability of a carrier
for hire for the loss of property of shippers delivered for transporting;
marine builder's risks; bridges, tunnels, piers, wharves, docks and slips, dry
docks, marine railways, and other aids to navigation and transportation,
precious stones, precious metals, and jewelry, whether in the course of
transportation or otherwise; coverage of personal property by all risk forms
known as the "Personal Property Floater"; and coverage of mobile machinery and
equipment. Inland marine insurance includes "travel insurance" as defined in
Section
38-43-720
(14).

(41)
(
42)
"Modeling organization" means a corporation,
unincorporated association, partnership, or individual, whether located within
or outside this State, that prepares a catastrophe model that is used by an
insurer in a rate filing. A catastrophe model is a computer program that
estimates losses from a potential upcoming disaster. Catastrophe modeling
combines data on property exposures with information on hazards, such as storms
or earthquakes, to generate estimates of potential losses.

(42)
(
43)
"Negotiate" means the act of conferring directly with
or offering advice directly to a purchaser or prospective purchaser of a
particular contract of insurance concerning substantive benefits, terms, or
conditions of the contract, provided that the person engaged in that act either
sells insurance or obtains insurance from insurers for purchasers.

(43)
(
44)
"Nonadmitted insurer" means an insurer not licensed
to do an insurance business in this State.

(44)
(
45)
"Person" means a corporation, agency, partnership,
association, voluntary organization, individual, or another entity,
organization, or aggregation of individuals.

(45)
(
46)
"Policy" means a contract of insurance.

(46)
(
47)
"Premium" means payment given in consideration of a
contract of insurance.

(47)
(
48)
"Premium service agreement" means an agreement by
which an insured or prospective insured promises to pay to an insurance premium
service company the amount advanced or to be advanced under the agreement to an
insurer or to an insurance producer or insurance broker in payment of premiums
on an insurance contract together with a service charge as authorized by
Chapter 39 of this title.

(48)
(
49)
"Probation" means allowing a licensed person the
director has found to have violated South Carolina, any United States
territory, or another state's laws to continue selling, soliciting, or
negotiating insurance on behalf of an insurer. A person convicted of a felony
or those crimes listed in 18 U.S.C. 1033 or 1034 does not qualify for
probation.

(49)
(
50)
"Professional bondsman" means as defined in Section
38-53-10
.

(50)
(
51)
"Property insurance" means each insurance against
direct or indirect loss of or damage to a property resulting from fire, smoke,
weather disturbances, climatic conditions, earthquake, volcanic eruption,
rising waters, insects, blight, animals, war damage, riot, civil commotion,
destruction by order of civil authority to prevent spread of conflagration or
for other reason, water damage, vandalism, glass breakage, explosion of a water
system, collision, theft of automobiles, and personal effects in them (but no
other forms of theft insurance), loss of or damage to domestic or wild animals,
and any other perils to property which in the discretion of the director or his
designee form proper subjects of property insurance, if not specified in items
(1), (7), (11),
(35)
(36)
,

(40)
(41)
,
(54)
(55)
, or
(59)
(60)
of this section.

(51)
(
52)
"Runner" means as defined in Section
38-53-10
.

(52)
(
53)
"Sell" means to exchange a contract of insurance by
any means, for money or its equivalent, on behalf of an insurance company.

(53)
(
54)
"Solicit" means attempting to sell insurance or
asking or urging a person to apply for a particular kind of insurance from a
particular company.

(54)
(
55)
"Surety" includes insurance or a bond that covers
obligations to pay the debts, or answer for the default, of another, including
faithlessness in a position of public or private trust.

(55)
(
56)
"Surety bondsman" means as defined in Section
38-53-10
.

(56)
(
57)
"Surplus lines insurance" means insurance in this
State of risks located or to be performed in this State, permitted to be placed
through a licensed broker, or a licensed broker as provided in Section
38-45-10
(8)(b)(ii), with a nonadmitted insurer eligible to accept the
insurance, other than reinsurance, wet marine and transportation insurance,
insurance independently procured, and life and health insurance and annuities.
Excess and stop-loss insurance coverage upon group life, accident, and health
insurance or upon a self-insured's life, accident, and health benefits program,
disability insurance in excess of any benefit limit available from an admitted
insurer, commercial motor vehicle liability, and international major medical
insurance may be approved as surplus lines insurance.

(57)
(
58)
"Surplus to policyholders" is the excess of total
admitted assets over the liabilities of an insurer which is the sum of all
capital and surplus accounts minus any impairment of them.

(58)
(
59)
"Terminate" means the cancellation of the
relationship between an insurance producer and the insurer or the termination
of a producer's authority to transact insurance.

(59)
(
60)
"Title insurance" means insurance of the owners of
real property and other persons lawfully interested in the title insurance
against loss by reason of defective titles and undisclosed liens and
encumbrances affecting the property.

(
60) Reserved.

(
61)
"Uniform agency application" means the current version of the National
Association of Insurance Commissioners Uniform Business Entity Application for
resident and nonresident business entities.

(
62)
"Uniform application" means the current version of the National Association of
Insurance Commissioners Uniform Application for resident and nonresident
producer licensing.

(
63)
"International major medical insurance" means a temporary health insurance
policy that covers the expenses associated with illnesses or accidents that
occur while traveling or when temporarily residing outside of a person's home
country.

S
ECTION 2.
S
ection
38-69-220
of the S.C. Code is amended to read:

S
ection
38-69-220
.
(
A)
This article does not apply to any reinsurance, group
annuity purchased under a retirement plan or plan of deferred compensation
established or maintained by an employer including a partnership or sole
proprietorship or by an employee organization, or by both, other than a plan
providing individual retirement accounts or individual retirement annuities
under Section 408 of the Internal Revenue Code, premium deposit fund, variable
annuity, investment annuity, immediate annuity, any deferred annuity contract
after annuity payments have commenced, or reversionary annuity, or to any
contract which is delivered outside this State through an agent or other
representative of the company issuing the contract.

(
B) Sections
38-69-230
through
38-69-280
do not apply to contingent deferred annuities. Notwithstanding this
exemption, the department may promulgate regulations for nonforfeiture benefits
for contingent deferred annuities that are, in the opinion of the director, equitable
to the contract holder, appropriate given the risks insured, and to the extent
possible, consistent with general intent of this article.

S
ECTION 3.
S
ection
38-44-20
(2) of the S.C. Code is amended to
read:

(
2) "Insurer" means a domestic insurer
as defined in Section
38-1-20
(17)
(34)
.

S
ECTION 4. This act takes effect 90 days after
approval by the Governor.

----XX----

This web page was last updated on February 4, 2026 at 10:53 AM