S.C. Code Ann. § 37-4-201 – Term of insurance; medical evidence of insurability disclosure requirements

(1) Consumer credit insurance provided by a creditor may be subject to the furnishing of evidence of insurability satisfactory to the insurer. Whether or not such evidence is required, the term of the insurance shall commence no later than when the debtor becomes obligated to the creditor or when the debtor applies for the insurance, whichever is later, except as follows:
1. (a) if any required evidence of insurability is not furnished until more than thirty days after the term would otherwise commence, the term may commence on the date when the insurer determines the evidence to be satisfactory; or
2. (b) if the creditor provides insurance not previously provided covering debts previously created, the term may commence on the effective date of the policy.
(2) If evidence of insurability is required, and the insured's eligibility is to be determined by inquiries about existing or past medical conditions, the medical conditions inquired about shall be clearly and conspicuously disclosed in plain language on forms promulgated or approved by the Department of Insurance which achieve a grade level score of no higher than seventh grade on the Flesch-Kincaid readability test. The disclosure shall be made in a clear and conspicuous manner in bold type, with space for the insured to personally acknowledge the disclosure by a dated signature or initial immediately adjacent to the disclosure. Insurance coverage shall not be denied on the basis of any medical condition not so disclosed. Coverage shall not be denied if the insured's dated acknowledgment does not appear on the form.
(3) The originally scheduled term of the insurance shall extend at least until the due date of the last scheduled payment of the debt, except as follows:
1. (a) if the insurance relates to a revolving charge account or revolving loan account, the term need extend only until the payment of the debt under the account and may be sooner terminated after at least thirty days' notice to the debtor; or
2. (b) if the consumer chooses to purchase insurance for less than the term of the consumer credit transaction and if the debtor is advised in writing that the insurance will be written for a specified shorter time as described in subitems (ii) and (iii) below, the term need extend only until the end of the specified time:
  1. (i) For all closed-end credit transactions in which the debtor's age at loan maturity would not exceed any applicable age limit, the debtor shall be given a disclosure that the insurance is for the length of the loan.
  2. (ii) The disclosure may allow the consumer to affirmatively sign a statement that the term of the insurance is less than the length of the loan, in which event, the coverage shall be for the duration so agreed to and the disclosure must clearly and conspicuously indicate the length of the insurance coverage and that the length of the insurance coverage is less than the term of the loan.
  3. (iii) All insurance may be subject to a provision by which the insurance terminates when the insured debtor attains a specified age, which shall not be less than sixty-six years; provided, that any premium paid by or charged to a debtor for a period of coverage beyond such termination age shall result in coverage being continued until the end of the period for which the premium payment or charge is made.
  4. (iv) The disclosures must achieve a grade level score of no higher than seventh grade on the Flesch-Kincaid readability test.
(4) The term of the insurance shall not extend more than fifteen days after the originally scheduled due date of the last scheduled payment of the debt unless it is extended without additional cost to the debtor or as an incident to a deferral, refinancing, or consolidation.