Appellant, C. Lane Morgan (Morgan), is an insurance agent whose authority to write automobile insurance was terminated by respondents: The Kemper Insurance Companies, Kemper Insurance Group, and three insurance companies within the Kem*146per group, Lumbermen’s Mutual Insurance Co. (Lumbermen’s) American Motorists Insurance Co. (Motorists), and American Manufacturers Mutual Insurance Co. (Manufacturers). Morgan sued under § 38-37-940(2) of the South Carolina Code of Laws for unlawful termination of his agency-agreement. The trial judge granted respondents’ motions for summary judgment, and Morgan appealed. We affirm.
I
On April 8, 1974, appellant entered into a Preferred Agency Agreement permitting him to write property and casualty insurance for Lumbermen’s and Motorists. This agreement included the following provision:
AGREEMENT WITH MORE THAN ONE COMPANY
14. If this Agreement is executed by more than one Company, then it shall constitute a separate and independent agreement by and between Agent and each such Company. Default in one agreement shall constitute default in all.
On May 21, 1981, Morgan, Lumbermen’s, Motorists, and Manufacturers signed an endorsement to the agreement amending it to allow Morgan to write property and casualty insurance, including automobile insurance, for Manufacturers. The endorsement changed none of the provisions of the original agreement.
In 1974, the South Carolina legislature passed S.C. Act 1177. This Act requires all automobile insurance agents to accept automobile insurance applications from high risk drivers at set premium rates. As Morgan wrote more of this type of insurance he produced higher and higher loss ratios for Lumbermen’s and Motorists. Having written no automobile insurance for Manufacturers he produced no losses for it. In early August 1981, the “Kemper Group” wrote a letter to Morgan expressing concern over these losses. By the end of August the Personal Lines Underwriting Manager for these three companies decided to terminate Morgan’s authority to write automobile insurance for the three companies. On September 17, 1981, the Marketing Manager for the Kemper Group officially notified Morgan of this decision.
Although these are three separate companies, they are in some respects treated as one. Morgan often made checks payable to “Kemper Group” or “Kemper Insurance Companies.” These checks included payments to all three companies. Kemper stationery was marked with the Kemper group insignia. All correspondence to Morgan regarding his loss ratios discussed his total Kemper business without segregating his sales for specific companies. The combined premiums for the three companies were distributed among them, with losses and expenses prorated over the three companies.
These three companies also used the same application form for insurance. The application form listed all of the companies within the Kemper Group. An agent, such as Morgan, was free to put an “X” in the box for whichever company he chose for the insurance. Nevertheless, from May 21, 1981, until September 21, 1981, the date of cancellation, and despite the ease of designating any one of the three insurance companies, Morgan wrote no automobile insurance for Manufacturers.
Morgan brought suit against respondents, alleging that they violated § 38-37-940(2) of the South Carolina Code of Laws and also South Carolina’s Unfair Trade Practices Act because of the violation of § 38-37-940(2). Both sides moved for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. The trial judge granted respondents’ motions for summary judgment, holding that (1) Morgan could not sue Manufacturers because Morgan had sold no automobile insurance for that company and (2) Morgan could not sue Lumbermen’s or Motorists because their agreements with appellant were originally signed in April 1974, before the effective date of the Act.
II
The first issue on appeal is whether Morgan may sue Manufacturers for the *147wrongful termination of his authority to write automobile insurance. This private cause of action is based on a violation of § 38-37-940(2) of the South Carolina Code of Laws. That section states:
No insurer of automobile insurance shall cancel its representation by an agent primarily because of the volume of automobile insurance placed with it by the agent on account of the statutory mandate of coverage nor because of the amount of the agent’s automobile insurance business which the insurer has deemed it necessary to reinsure in the Facility.
S.C.Code Ann. § 38-37-940(2) (emphasis added).
The South Carolina Supreme Court first recognized a private cause of action for wrongful termination of an agency contract, based on a violation of this section, in G-H Insurance Agency, Inc. v. Travelers Insurance Co., 270 S.C. 147, 241 S.E.2d 534 (1978). The South Carolina Supreme Court specifically found a cause of action for a violation of § 38-37-940(2). See Dixon v. Nationwide Mutual Insurance Co., 281 S.C. 452, 316 S.E.2d 376, 376 (1984).
Morgan argues that he can maintain this action against Manufacturers because it violated the preface to § 38-37-940. This preface states, in part:
No insurer of automobile insurance shall directly or indirectly by ... imposition or threat of penalty or through any artifice or device whatsoever, ... impose any detriment upon any ... agent for the purpose of avoiding any class or type of automobile insurance risk which the insurer deems it necessary to reinsure in the Facility; nor shall any such ... imposition or threat of penalty in connection with any other line or type of insurance be so tied to automobile insurance as to have a tendency to induce the agent to avoid any such class or type of automobile insurance risk; ____ Any act in violation of this section shall constitute an act of unlawful discrimination and unfair competition which, if willful, shall result in the suspension or revocation of the insurer’s certificate of authority for not less than six months.
S.C.Code Ann. § 38-37-940 (1976).
The ease law, however, makes it clear that an action for wrongful termination of an agency agreement is found solely under § 38-37-940(2), and not the preface. See, e.g., Insurance Financial Services, Inc. v. The South Carolina Insurance Co., 318 S.E.2d 10, 11 (S.C.1984) (in which Little-john, C.J., quotes § 38-37-940(2) and then states that it creates the private cause of action); Dixon, 316 S.E.2d at 576. Furthermore, unlike § 38-37-940(2), the preface contains its own penalties for its violation.
Morgan placed no automobile insurance with Manufacturers, and Manufacturers had none of Morgan’s automobile insurance to reinsure. Thus, Manufacturers could not have violated § 38-37-940(2) by withdrawing Morgan’s authority to write automobile insurance. The trial judge did not err in granting Manufacturers’ motion for summary judgment.
II
The second issue on appeal is whether the contract clauses of the South Carolina and United States Constitutions prohibit this action against Lumbermen’s and Motorists. Morgan entered into the agreements with these two companies on April 8, 1974, before the effective date of § 38-37-940(2). In Garris v. Hanover Insurance Co., 630 F.2d 1001 (4th Cir.1980), this court held that the retroactive application of the private enforcement provision of this section was an impermissible impairment of the contractual obligations in violation of the contract clause of the United States Constitution.
Lumbermen’s and Motorists each had a contractual right to terminate their agreements with Morgan. This right existed before § 38-37-940(2) became the law in South Carolina. To allow Morgan to sue them for exercising that right would permit the retroactive application of § 38-37-940(2) and would impair that contractual *148right. This would violate both the state and federal contract clauses. Garris, 630 F.2d at 1011; G-H Insurance Agency, Inc. v. Continental Insurance Co., 278 S.Ct. 241, 294 S.E.2d 336, 341 (1982) (holding that the retroactive application of this section also violates the contract clause of the South Carolina Constitution). Accordingly, Morgan may not maintain this action against these two companies for wrongful termination of these two agreements.1
Morgan argues that the effective date of the agreements between Motorists and himself and Lumbermen’s and himself changed to May 21, 1981, the date when the endorsement adding Manufacturers was made. This argument is without merit. In effect, Morgan is claiming that there was a novation when Manufacturers was added to the original agreement.
In South Carolina:
A novation is a “mutual agreement between all parties concerned for the discharge of a valid existing obligation by the substitution of a new valid obligation on the part of the debtor.” ... To create a novation, there must be an intention for such,____ The party alleging a novation has the burden of proving such. The circumstances attending the transaction alleged to be a novation must show the intention to substitute a new obligation in place of the existing one.
Superior Automobile Insurance Co. v. Maners, 261 S.C. 257, 199 S.E.2d 719, 722 (1973) (citations omitted). The agreement itself indicates that a novation was not intended by respondents: “If this agreement is executed by more than one Company, then it shall constitute a separate and independent agreement by and between Agent and each such Company.” (Emphasis added).
We have considered Morgan’s other arguments and find them to be without merit. The decision of the district court is
AFFIRMED.
. At oral argument a question arose concerning whether the contract clause prohibits this action because the agreements were terminated on account of business written after the effective date of the statute. The specific holding in Garris answers that question:
We hold that to the extent [§ 38-37-940(2) ] confers a private cause of action for termination of agency contracts entered into before its enactment, it violates the Contract Clause.
Garris, 630 F.2d at 1003 (emphasis added).