§ 1.15 Cancellation - by the Insurer

• Library: Guide to South Carolina Liability and Property Insurance Law (SCBar) (2019 Ed.)

§ 1.15 Cancellation - By the Insurer

Under South Carolina law, the party asserting that the policy has been cancelled bears the burden of proving the cancellation was valid.¹⁴⁰ Section 38-75-730 of the South Carolina Code of Laws, entitled "Restrictions on cancellation of polices and renewals; notice of cancellation; exceptions," governs the procedure whereby insurers and insureds are able to cancel liability insurance policies. Section 38-75-730 provides:

(a) No insurance policy or renewal thereof may be canceled by the insurer prior to the expiration of the term stated in the policy, except for one of the following reasons:

(1) nonpayment of premium;
(2) material misrepresentation of fact which, if known to the company would have caused the company not to issue the policy;
(3) substantial change in the risk assumed, except to the extent that the insurer should reasonably have foreseen the change or contemplated the risk in writing the policy;
(4) substantial breaches of contractual duties, conditions, or warranties;
(5) loss of the insurer's reinsurance covering all or a significant portion of the particular policy insured, or where continuation of the policy would imperil the insurer's solvency or place that insurer in violation of the insurance laws of this State. Prior to cancellation for reasons permitted in this item, the insurer shall notify the director or his designee, in writing, at least sixty days prior to such cancellation and the director or his designee shall, within thirty day of such notification, approve or disapprove such action.

(b) Cancellation under subsection (a)(1) of this section is not effective unless written notice of cancellation has been delivered or mailed to the insured and the agent of record, if any, not less than ten days prior to the proposed effective date of cancellation. Cancellation under subsection (a)(2) through (5) is not effective unless written notice of cancellation has been delivered or mailed to the insured and the agent of record, if any, not less than thirty days prior to the proposed effective date of cancellation. The notice must be given or mailed to the insured and the agent at their addresses shown in the policy or, if not reflected therein, at their last known addresses. Any notice of cancellation shall state the precise reason for cancellation. Proof of mailing is sufficient proof of notice.
(c) Subsections (a) and (b) do not apply to any insurance policy which has been in effect for less than one

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