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2013 South Carolina Code of Laws Title 38 - Insurance CHAPTER 65 - GROUP LIFE INSURANCE SECTION 38-65-30. Assignment of rights and benefits under policies.

(1) Notwithstanding any other provision of law, any person insured under a group insurance policy, pursuant to an arrangement among the insured, the group policyholder, and the insurer, may assign his rights and benefits under the policy, including, but not limited to, the right to have issued to him an individual policy as set forth in items (8), (9), and (10) of Section 38-65-210 and the right to name a beneficiary. The assignment entitles the insurer to deal with the assignee as the owner of all rights and benefits conferred on the insured under the policy in accordance with the terms of the assignment.

(2) Subsection (1) of this section acknowledges, declares, and codifies the existing right of assignment of interest under group life insurance policies by persons insured under those policies.

HISTORY: Former 1976 Code Section 38-65-30 [1985 Act No. 137, Section 3] recodified as Sections 38-41-30, 38-41-40, and 38-41-50 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-31-20 [1962 Code Section 37-307.1; 1970 (56) 2505] recodified as Section 38-65-30 by 1987 Act No. 155, Section 1.

Disclaimer: These codes may not be the most recent version. South Carolina may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.

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South Carolina Code 38-65-30. Assignment of rights and benefits under policies

Terms used in south carolina code 38-65-30.

  • Beneficiary : A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
  • insurance : includes annuities. See South Carolina Code 38-1-20
  • 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. See South Carolina Code 38-1-20
  • Life insurance : means a contract of insurance upon the lives of human beings. See South Carolina Code 38-1-20
  • Person : means a corporation, agency, partnership, association, voluntary organization, individual, or another entity, organization, or aggregation of individuals. See South Carolina Code 38-1-20
  • Policy : means a contract of insurance. See South Carolina Code 38-1-20

assignment of benefits south carolina

SC Supreme Court Adopts “Post-Loss” Exception to Enforcement of Consent-to-Assignment Clauses in Liability Policies

White and Williams LLP

On April 13, 2022, the South Carolina Supreme Court held that an insured’s assignment of its rights under a liability policy, without the insurer’s consent, is valid once “loss” has taken place, even if the insured’s liability for third-party damage has not been determined. Aligning South Carolina with what it called “the majority of jurisdictions,” the court concluded that “loss” is synonymous with the “occurrence” giving rise to the insured’s liability. See PCS Nitrogen, Inc. v. Continental Cas. Co. , No. 28093, 2022 S.C. LEXIS 54 (Apr. 13, 2022).

In PCS Nitrogen , the appellant, PCS Nitrogen, Inc. (PCS), sought coverage under liability policies issued to Columbia Nitrogen Corp. (referred to as “Old CNC”) from 1966 to 1985 for PCS’s liability arising out of pollution at a manufacturing site operated by Old CNC in Charleston, South Carolina. PCS claimed it had standing to seek coverage on several grounds, including that, in 1986, Old CNC had assigned its rights under the policies to PCS’s predecessor. The trial court and South Carolina Court of Appeals disagreed with that theory, finding the purported assignment invalid because, contrary to express provisions in the policies, Old CNC had not sought or obtained the insurers’ consent to the assignment.

PCS was granted certiorari to the South Carolina Supreme Court, which reversed the Court of Appeals and remanded to the trial court. The Supreme Court reasoned that, though an insurer is not obligated to disburse policy proceeds until there is a judgment or settlement, the “overwhelming majority of jurisdictions” have adopted the “exception” that “an assignment of insurance benefits made after the occurrence or underlying injury but before the insured’s liability [is] fixed by judgment [is] enforceable as a post-loss assignment.” The Supreme Court determined that, because the polluting activities at the Charleston site had ceased at the time of the assignment, it was a valid “post-loss” assignment, despite that PCS was not found liable for the pollution until decades later. The court also concluded that PCS’s attempts to pin liability for the pollution on Old CNC’s corporate successor – which itself had asserted it was a true insured under the policies – did not increase the risk to the insurers because the risk had become “fixed” at the time of the “loss.” Finally, the court said it was “persuaded” by PCS’s “public policy” argument that upholding the assignment would prevent the insurers from receiving a “windfall.”

PCS Nitrogen is the latest in a series of decisions in which courts have disregarded express policy terms and excused insureds from obtaining their insurers’ consent to assignments of coverage rights before the insureds were found liable for third-party damage. In states where courts have not adopted this approach, insurers should still be able to rely on their policies' consent-to-assignment clauses in determining rights to coverage.

[ View source .]

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Handling Assignment of Benefit (“AOB”) Claims in the Wake of Hurricanes Irma and Harvey

Overview | Blog Posts | First-Party Coverage | Timothy Engelbrecht , T. Nicholas Goanos , L. Andrew Watson | Related | Print | Share

Timothy Engelbrecht

Partner | First-Party Coverage , Extra-Contractual 813-281-1900 [email protected]

T. Nicholas Goanos

Partner | Extra-Contractual , Arson & Fraud , Casualty Defense Litigation , Third-Party Coverage , First-Party Coverage 704-940-9811  [email protected]

L. Andrew Watson

Partner | Extra-Contractual , Casualty Defense Litigation , Arson & Fraud , Construction , First-Party Coverage , Third-Party Coverage 704-543-2321 [email protected]

September 12, 2017

Hurricanes Irma and Harvey have damaged large areas of Florida, Texas, and Louisiana, as well as brought heavy rain and wind to Georgia, North Carolina, and South Carolina. As insurers handle thousands of property damage claims in these areas, they will undoubtedly be presented with claims that have been assigned from insureds to damage-repair contractors. These are often referred to as assignments of benefits or “AOB” claims. This article explains briefly what an AOB claim is, how Florida, Texas, Louisiana, Georgia, North Carolina, and South Carolina address AOB claims, and the best practices for handling AOB claims.


The classic example of an AOB claim is the following: an insured suffers property damage and hires a repair contractor to repair that damage. The repair contractor requires the insured to execute a written document, usually entitled “Assignment of Insurance Benefits”, which says something to the effect of “for and in consideration of the contractor’s agreement to protect the property from further damage and/or make repairs, the insured assigns his/her/its insurance benefits to the contractor.” The contractor thereafter makes a claim directly to the insurer using the AOB.


Florida  has allowed AOB claims for over 100 years. Sec. First Ins. Co. v. State, Office of Ins. Regulation , 177 So. 3d 627, 628 (Fla. 1st DCA 2015). Post-loss property damage claims are freely assignable in Florida regardless of whether the insurer consents or not.   Start to Finish Restoration, LLC v. Homeowners Choice Prop. & Cas. Ins. Co. , 192 So. 3d 1275, 1276 (Fla. 2d DCA 2016). An insurance policy that has a “non-assignment” clause only bars the assignment of the entire insurance policy, not an assignment of a post-loss insurance claim. Bioscience West, Inc. v. Gulfstream Prop. & Cas. Ins. Co. , 185 So. 3d 638, 640-41 (Fla. 2d DCA 2016). 

Texas  has adopted the opposite approach to AOBs. The general rule in Texas is that an insured cannot assign an insurance claim if the insurance policy has a non-assignment clause. ARM Props. Mgmt. Group v. RSUI Indem . Co., 642 F.Supp.2d 592, 609-10 (W.D. Tex. 2009) relying on  Tex. Farmers Ins. Co. v. Gerdes , 880 S.W. 2d 215, 218 (Tex. App. 1994). This is true even if the non-assignment clause is general and broadly worded.

Louisiana  takes a hybrid approach to AOBs. Louisiana allows an insurer to place a clause in an insurance policy that prohibits post-loss assignments.   In re Katrina Canal Breaches Litig ., 63 So. 3d 955, 962-63 (La. 2011). However, in order for such a clause to be enforceable, the clause must clearly and unambiguously express that it applies to post-loss assignments.   Id . The general and a broadly worded non-assignment clause that has traditionally appeared in most insurance policies is not sufficient. Id. 

Georgia , much like many of the States above and across the Country, permits AOBs.  See Santiago v. Safeway Ins. Co. , 196 Ga. App. 480, 481, 396 S.E.2d 506, 608 (App. Ct. 1990). Unlike North Carolina and South Carolina, which are discussed below, an assignee in Georgia may pursue his own extra-contractual claim only after first establishing a breach of the insurance policy.  Southern Gen. Ins. Co. v. Holt , 262 Ga. 267, 416 S.E.2d 274, 276-77 (1992). Further, before pursuing an extra-contractual claim, an assignee (or insured) in Georgia must provide the insurer an opportunity to “cure” the alleged “bad faith”. See  Ga. Code Ann. § 33-4-6.

Lastly,  North Carolina  and  South Carolina  also allow AOBs. In upholding the validity of an assignment, courts in these States have ruled not only that assignments of benefits are indeed valid, but also, that they are governed by each State’s general contract law. See e.g., Alaimo Family Chiropractic v. Allstate Ins. Co. , 155 N.C. App. 194, 197, 574 S.E.2d 496, 498 (App. Ct. 2002);  Gray v. State Farm Auto. Ins. Co. , 327 S.C. 646, 491 S.E.2d 272 (App. Ct. 1997). The “rubber” meets the proverbial “road”, though, when an extra-contractual claim is alleged. In North Carolina and South Carolina, a plaintiff may assert an extra-contractual claim, even if the insurer has not breached the insurance policy. See  Tadlock Painting Co. v. Maryland Cas. Co. , 322 S.C. 498, 473 S.E.2d 52 (1996);  Kielbania v. Indian Harbor Ins. Co., 2012 WL 3957926 (M.D.N.C. 2012). However, an assignee is limited in the sense that it may pursue only his own extra-contractual claim, and not the assignors.  Horton v. New S. Ins. Co. , 122 N.C. App. 265, 268, 468 S.E.2d 856, 858 (1996);  Davis v. Liberty Mut. Ins. Co. , 2015 WL 6163243, at *4 (D.S.C. 2015).


First, as noted above, an adjuster needs to know if the state law where the AOB claim is being made allows for AOB claims. 

Second, assuming the state allows for AOB claims, the adjuster needs to carefully read what the actual AOB document says. They are not all the same. Some AOBs assign the entire claim. Other AOBs only assign part of the claim. For example, imagine an insured’s property is damaged by water. The insured needs the water extracted and the structure rebuilt. An AOB might assign both the water extraction and the rebuild claim to a single contractor. Or, the insured might execute one AOB to a water extraction contractor and a separate AOB to a different rebuild contractor. Or, an insured might execute an AOB to a water extraction contractor and the insured will retain the remaining rights to make the rebuild claim. If the AOB is unclear what – exactly – is being assigned, it is important for the adjuster to speak with the insured and the contractor to ensure everyone is on the same page.

Third, the adjuster should speak to the insured to gather information necessary to understand and adjust the assigned claim. In Florida, an adjuster likely cannot require a contractor to perform the insurance policy’s post-loss conditions of giving documents, executing a sworn statement in proof of loss, or appearing for an examination under oath. Shaw v. State Farm Fire & Cas. Co.,  37 So. 3d 329, 332-33 (Fla. 5th DCA 2010) disapproved on other grounds in  Nunez v. Geico Gen. Ins. Co. , 117 So. 3d 388 (Fla. 2013). However, the insured is still responsible for fulfilling those conditions even with regard to the assigned claim. Id. The insured’s failure to do so may bar the assigned claim. Id. 

Fourth, assuming payment will be made on the assigned claim, the adjuster should determine who will be listed on the settlement check. If there is a valid AOB, it may be improper to list the insured on the settlement check since the insured’s rights have been assigned to the contractor. Many AOBs will state that only the contractor be listed on the settlement check. However, it is good for an adjuster to confirm with the insured that the insured understands that he/she/it will not be listed on the settlement check. It is also important for the adjuster to correctly determine if a mortgagee needs to be listed on the settlement check. Situations vary depending on the nature of the work that the contractor is doing (damage prevention versus repair) and whether the work has been completed or is still to be done. The adjuster should discuss the situation with the insured, the contractor, and the mortgagee if the adjuster is at all unsure if the mortgagee needs to be on the settlement check.

Fifth, an adjuster should know whether an assigned claim can be resolved using the insurance policy’s appraisal provision. Appraisal can be an inexpensive and expedient way to resolve a claim. In Florida, an insurer usually can require a contractor with an assigned claim to go to appraisal if the insurance policy provides for the mandatory appraisal upon request.  Certified Priority Restoration v. State Farm Florida Ins. Co ., 191 So. 3d 961, 962 (Fla. 4th DCA 2016).

Insurers will continue to be presented with AOB claims in the wake of Hurricanes Irma and Harvey. We have been helping insurers and adjusters navigate the unique issues associated with AOB claims for many years. Please contact us if you have any questions or need assistance.

For any further questions, please contact Timothy Engelbrecht, T. Nicholas Goanos, or L. Andrew Watson.

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Assignment of Benefits

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You are being asked to sign an Assignment of Benefits (AOB). What is it and what should you know?

An Assignment of Benefits (AOB) is a contract between you and another party, typically a  contractor, roofer, or even a mitigation company, giving them the right to deal directly with your insurance company and receive payment for your claim.

The “pitch” is, “I will handle everything for you Mr. Homeowner so you don’t have to interact with the insurance company at all”. Unfortunately, signing this document gives all of your rights to claim and payment thereof, away. The insurance company is no longer obligated to answer questions from you or hear your concerns because they are now obligated, by your signed authority, to deal directly with the contractor.

While most assignment of benefits are not fraudulent, fraudulent activity using this contract is on the rise. An example of fraudulent activity could be that someone knocks on your door and states there is damage to your roof and it happened from a recent storm. He further explains that he can get you a NEW roof for free – just sign this AOB agreement and it will be all taken care of!

Should the roofer or contracted third party claim more damage than there actually is, it is much easier for them to commit that fraudulent activity when dealing directly with the insurance company.

These fraudulent types of activities affect homeowners in two ways:

  • The Carrier may choose to fight the assessment in the courts which substantially prolongs a resolution to the Insured’s damages.
  • In the long-term, these inflated loss assessments cause carriers to increase their rates to ensure there’s enough premium to remain solvent.

Per the South Carolina Department of insurance, in the “Assignment of Benefits and What Can I Do to Avoid Insurance Fraud sections”  use caution and seek advice when considering assignment of benefits, particularly after a storm or disaster.

AOB Reform Laws

Some states, like Florida, have now passed AOB Reform Laws which require AOBs to provide in the agreement, that you have the right to cancel without penalty, however, you may be obligated to pay for any contracted work he performed before the agreement is canceled.

Seek Third Party Advice

The bottom line is, signer, beware!  Before you sign this type of document, seek advice from your agent or an attorney to understand exactly what’s being presented and more importantly what policyholder rights you’ll lose relative to your claim.

If you have any questions about your current policy or looking for the best homeowners insurance from Orion180,  give us a call today.

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The Supreme Court of South Carolina Adopts the Post-Loss Exception


Ryan D. Ellard

Ryan D. Ellard

In PCS Nitrogen, Inc. v. Cont'l Cas. Co. , 436 S.C. 254, 871 S.E.2d 590 (2022), the Supreme Court of South Carolina formally adopted the “post-loss exception” – a common law rule providing that insurer consent is not required for an assignment of insurance benefits made after a loss has occurred. The case involved a series of primary and excess liability policies insuring a fertilizer manufacturing plant in Charleston from 1966-1985. The plant and its assets were sold in 1986. The transaction included an assignment of rights under the primary and excess policies, despite the fact that the policies included the following Consent-to-Assignment provision: “Assignment of interest under this policy shall not bind the company until its consent is endorsed hereon.” The policies also included a No Action clause, which provided that:

No action shall lie against the company, unless, as condition precedent thereto, there shall have been full compliance with all of the terms of this policy, nor until the amount of the insured's obligation to pay shall have been finally determined by judgment against the insured after actual trial or by written agreement of the insured, the claimant and the company.

In 2005, a third-party commenced a declaratory judgment action in federal court against the assignee, arguing that the assignee was liable under CERCLA for environmental remediation at the fertilizer plant site. The assignee, in turn, filed an action in state court seeking a declaration that the insurers who issued the 1966-1985 policies were obligated to provide coverage for its defense costs and environmental liabilities stemming from the CERCLA litigation.

The trial court granted the insurers’ motion for summary judgment, holding that the assignment was unenforceable as a matter of law because the original policyholder did not secure the insurers’ consent. Additionally, the court ruled that there was no “post-loss” assignment because, at the time of the assignment, no judgment had been entered against the policyholder. The Court of Appeals affirmed.

The Supreme Court reversed and, in doing so, formally made the “post-loss exception” binding law in South Carolina. In their briefs, the insurers cited decisions from Hawaii and Oregon holding that no assignments , even those made after a loss, are valid without insurer consent. The Court declined to follow Hawaii and Oregon, and instead endorsed “the majority rule [] that such a provision does not bar an assignment made after a loss.” Id . at 262, 594. The Court also rejected the insurers’ argument that the “post-loss exception” cannot apply, as there was no “loss” at the time of the 1986 assignment. 1 Specifically, the insurers argued that absent a judgment or settlement, no “loss” has taken place. The Court disagreed, finding that, “[T]he overwhelming majority of jurisdictions have applied the post-loss exception to enforce assignments of insurance benefits made without insurer consent after an occurrence has taken place [as opposed to when a judgment or settlement occurs]. . . We agree with the majority of jurisdictions and hold the ‘loss,’ in the context of the post-loss exception, is synonymous with the ‘occurrence.’” Id . at 266–68, 596–98 (emphasis added).

Insurers writing coverage in South Carolina should be aware of the Supreme Court’s recent opinion and the effects it may have on post-loss assignments.

1  The policies did not define the term “loss.”

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An assignment of benefits, or AOB, is a legal tool that allows an insurer to directly pay a third party for services performed rather than reimbursing a claimant afterwards. In recent years, insurers have experienced an increase in fraud and abuse of assignment of benefit provisions, resulting in higher costs.

Assignment of rights to collect under an insurance policy after a loss are common. In many cases, homeowners will assign the right to collect to contractors or other service providers following a loss. Vendors soliciting AOBs from policyholders are typically associated with property insurance, auto repair, and personal insurance claims. While such assignment may allow policyholders to make emergency repairs more quickly, the practice has resulted in many homeowners becoming the victims of scam artists and other unscrupulous service providers. Contractors have sought to unilaterally establish the value of the claim and demand payment for inflated invoices. Many contractors also work with attorneys that then sue the insurance company over the claim.

State legislatures have sought to protect insurance consumers from AOB abuse by imposing common sense limitations, and 2019 finally saw some progress. For example, for the past several years, the Florida legislature has sought to put some parameters around the use of assignment of benefits to curtail the explosion of lawsuits filed by contractors and attorneys allegedly on behalf of consumers who knew nothing about the lawsuits. The only beneficiary of such fraud were the unscrupulous lawyers and contractors. In 2019, AOB reform legislation finally passed the Florida legislature, and was signed into law by the governor. Among other things, the new law gives policyholders the right to rescind the contract, and mandates that the assignment include an itemized description of the work to be done. Similarly, governors in North Dakota, Kansas, and Iowa all signed into law NAMIC-backed legislation to protect consumers from abusive assignment of benefit practices.

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    For example, while the third-party plaintiff and the first-party insured/defendant might both benefit from such an assignment, the insured/defendant's attorney(

  9. Assignment of Benefits

    Per the South Carolina Department of insurance, in the “Assignment of Benefits and What Can I Do to Avoid Insurance Fraud sections” use caution and seek

  10. The Supreme Court of South Carolina Adopts the Post-Loss Exception

    ... a common law rule providing that insurer consent is not required for an assignment of insurance benefits made after a loss has occurred.

  11. South Carolina Code of Laws Unannotated

    Any assignment by an insolvent debtor of his property for the benefit of his creditors in which any preference or priority is given to any creditor or

  12. South Carolina Appellate Court Holds Assignment of Insurance

    The Court of Appeals of South Carolina held that an assignment of insurance benefits by a corporation to its corporate successor was

  13. Our Positions

    An assignment of benefits, or AOB, is a legal tool that allows an insurer to directly pay a third party for services performed rather than reimbursing a

  14. What is assignment of benefits, and how does it impact insurers?

    So, the cost of the legal expense is prohibitive for the insurance company either way, which is why many insurers opt to settle. Inflated claims