A BILL TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY ENACTING THE "FAIR CLAIMS ACCOUNTABILITY ACT" BY ADDING SECTION 37-4-305 SO AS TO ESTABLISH THE HEALTHCARE CLAIMS CONSUMER ASSISTANCE PROGRAM ("H-CAP") AND TO PROVIDE THAT A HEALTH PLAN OR INSURER IN THIS STATE MAY NOT WRONGFULLY DENY OR INSUFFICIENTLY COVER A VALID CONSUMER INSURANCE CLAIM.
H3566, the “Fair Claims Accountability Act,” would create a new Healthcare Claims Consumer Assistance Program (H-CAP) within the South Carolina Department of Consumer Affairs to help consumers navigate health insurance issues. The program would assist with complaints, appeals, grievances, claim denials, coverage questions, premium tax credits, and outreach, and it would require health plans and insurers to include a prominent notice about H-CAP on explanation-of-benefits and denial communications. The department could also contract with an independent nonprofit to operate the program.
The bill also establishes a new enforcement framework for health insurance claim denials. It makes it unlawful for a health plan or insurer to wrongfully deny or insufficiently cover a valid consumer insurance claim, and it authorizes the department to investigate, impose civil penalties, suspend or revoke licenses, and refer matters to the Attorney General. If a wrongful denial is found, the insurer would be liable for double the amount wrongfully denied plus attorney’s fees, and in severe cases additional damages could be awarded to the policyholder. The bill further requires annual inflation- or premium-based adjustments to penalty amounts beginning in 2026.
H3566 would significantly expand reporting and data disclosure requirements for private health plans and insurers. Insurers would have to provide machine-readable data on denied and wrongfully denied claims, and the department would track complaints, investigations, and denial patterns. The department would then publish annual reports to state leaders and on its website, including denial rates, appeal outcomes, and enforcement activity. The bill also includes privacy protections limiting the collection, retention, and disclosure of personal information, generally requiring deidentification and aggregation except where disclosure is otherwise legally authorized.
The overall sentiment reflected in the bill text is strongly consumer-protective and enforcement-oriented, with a clear emphasis on accountability for insurers and access to assistance for policyholders. Because there are no committee transcripts or recorded votes provided, there is no direct evidence of support or opposition from lawmakers in the available context. The structure of the bill suggests its sponsors view claim denials as a significant consumer protection issue that warrants both public assistance and stronger penalties.
The main point of contention likely concerns the scope of regulatory authority and the financial exposure imposed on insurers. The bill gives the Department of Consumer Affairs broad powers to investigate, penalize, and potentially revoke licenses, while also creating automatic double-damages liability and attorney’s fees for wrongful denials. Insurers and health plan interests may object to the bill’s penalty structure, reporting burdens, and the possibility that it could increase premiums or encourage litigation, while consumer advocates would likely support the added remedies and transparency.
The bill would add Section 37-4-305 to the South Carolina Code, creating a new consumer assistance and enforcement program for health insurance claims within the Department of Consumer Affairs. It would impose new duties on health plans and insurers, including notice requirements, data reporting, and compliance with claim-denial standards, while also authorizing administrative penalties, license actions, and referrals for civil enforcement. It would also create a private and administrative remedy structure that includes double damages, attorney’s fees, and possible additional damages for severe harm.
The bill’s tone and structure indicate strong support for consumer protection and skepticism toward insurer claim-denial practices. In the absence of committee debate or votes, the available record does not show formal opposition or support, but the legislation itself is clearly designed to favor policyholders by expanding assistance, transparency, and penalties. The likely public sentiment is that the bill responds to concerns about unfair claim denials and inadequate coverage.
The most likely areas of contention are the bill’s mandatory penalties, including double damages and attorney’s fees, the department’s authority to suspend or revoke licenses, and the extensive reporting requirements imposed on insurers. Health plans and insurers may argue that the bill is overly punitive, administratively burdensome, and could raise costs, while consumer advocates would likely argue that strong enforcement is necessary to deter wrongful denials and ensure meaningful coverage. Privacy provisions may also draw scrutiny because the bill requires significant data collection, even though it includes deidentification and disclosure limits.