Regulation — South Carolina
SC Code §38-59-20 — Unfair Claims Settlement Practices Act
The prompt-investigation, prompt-settlement standard for every SC-authorized insurer. When AI-driven claims triage silently over-routes a group of claims into an SIU-flag lane, "prompt" is the exact word that breaks.
What the statute actually says
"Any of the following acts by an insurer, if committed in violation of Section 38-59-30, constitutes an improper claim practice: … (2) Failing to acknowledge with reasonable promptness pertinent communications arising under its policies. (3) Failing to adopt and implement reasonable standards for the prompt investigation and settlement of claims arising under its policies. (4) Not attempting in good faith to effect prompt, fair, and equitable settlement of claims submitted in which liability has become reasonably clear."
SC Code Ann. §38-59-20 -- Improper claim practices defined (South Carolina Unfair Claims Settlement Practices Act)
What this means in plain English
Three duties every SC-authorized carrier owes on every claim it touches:
- Prompt acknowledgment. Communications from insureds get answered on a reasonable clock.
- Prompt investigation. The claim moves through investigation without unreasonable delay.
- Prompt, fair, equitable settlement when liability is reasonably clear.
The statute does not care whether the delay came from a human adjuster or an AI routing engine. It cares whether the insured was delayed and whether the carrier can show the delay was reasonable.
What triggers the exposure in the sample
C3 coastal-county SIU-flag rate rose from ~5% to ~19% over ~45 days silently. SIU-lane claims are, by design, held pending investigation. When the flag rate on a specific county group jumps 14 percentage points on the AI's decision and the underlying claim quality has not changed, the average investigation clock for that group stretches. Claims that would have closed under the Fast-Close or Standard Adjust lane sit in SIU review. Each one is an individual "prompt investigation" question under §38-59-20 if a complaint lands.
The exposure does not require intent. It requires the carrier to be able to show, per claim, that the SIU flag was reasonable and that the resulting delay was not systemic.
What the $499 Snapshot shows against this rule
- Per-county-group SIU-flag-rate baseline vs recent, with the C3 delta quantified
- Dated drift-event log — when the divergence began, when each threshold fired, when high-severity events landed
- Independent-verifier declaration — the record a market-conduct examiner or plaintiff's counsel is going to ask for
- 3 fix-first items scoped to the routing engine + the county-group input chain
See the lane-shift chart that produces the finding →
$499 Snapshot. 3 business days.
Independent-verifier determination scoped to your carrier's actual claims-triage AI + 3 fix-first items + signed declaration.
Buy $499
Snapshot credit applies to Baseline ($2,500) or Enterprise Attestation ($35-55K) upgrade within 30 days.