PRIOR PRINTER'S NO. 3285 PRINTER'S NO. 3696
No. 2426 Session of 1976
INTRODUCED BY MESSRS. TAYLOR, ROSS, COHEN, VROON, STAHL,
SCHMITT, ZEARFOSS AND A. K. HUTCHINSON, MAY 26, 1976
AS REPORTED FROM COMMITTEE ON CONSUMER PROTECTION, HOUSE OF
REPRESENTATIVES, AS AMENDED, SEPTEMBER 21, 1976
AN ACT
1 Amending the act of May 17, 1921 (P.L.682, No.284), entitled "An
2 act relating to insurance; amending, revising, and
3 consolidating the law providing for the incorporation of
4 insurance companies, and the regulation, supervision, and
5 protection of home and foreign insurance companies, Lloyds
6 associations, reciprocal and inter-insurance exchanges, and
7 fire insurance rating bureaus, and the regulation and
8 supervision of insurance carried by such companies,
9 associations, and exchanges, including insurance carried by
10 the State Workmen's Insurance Fund; providing penalties; and
11 repealing existing laws," further providing for the Insurance
12 Commissioner's written order relieving an assessable mutual
13 insurance company from an assessment or other proceedings to
14 restore certain assets; providing for an assessable mutual
15 insurance company member's monetary claims being processed
16 and paid notwithstanding an assessment being made;
17 prohibiting the company from offsetting against or deducting
18 from the monetary claim of a member the amount of an
19 assessment; and prohibiting the members from offsetting
20 against or deducting from an assessment the amount of any of
21 his monetary claims against the company.
22 The General Assembly of the Commonwealth of Pennsylvania
23 hereby enacts as follows:
24 Section 1. Section 808, act of May 17, 1921 (P.L.682,
25 No.284), known as "The Insurance Company Law of 1921," amended
26 December 30, 1974 (P.L.1045, No.342), is amended to read:
27 Section 808. Assessments.--A mutual insurance company, other
1 than a mutual life company, not possessed of assets at least
2 equal to the unearned premium reserve and other liabilities,
3 shall make an assessment upon its members liable to assessment
4 to provide for such deficiency. Such assessment shall be against
5 each member in proportion to such liability as expressed in his
6 policy. [No] A member shall be assessed ONLY for [any loss that <--
7 occurred] DEFICIENCIES THAT EXISTED when his policy was [not] in <--
8 effect and no assessment shall be made [after] MORE THAN two <--
9 years from the expiration or cancellation date of a policy. [and <--
10 no] NO such assessment shall be made without the prior written <--
11 approval of the Insurance Commissioner. For each year the policy
12 is in force, such assessment shall [be an amount not greater <--
13 than] NOT EXCEED the annual or the average yearly cost or <--
14 premium of the policy for the period it has been in effect. Such
15 assessment shall not exceed IN THE AGGREGATE two times the <--
16 average yearly cost or premium of the policy for the period it
17 has been in effect. Notwithstanding any assessment being made,
18 an assessed member's monetary claims against the company
19 including but not limited to his claims for unearned premiums or
20 a claim for a loss payable to the member under his policy
21 provisions must be processed and paid in a routine manner; and <--
22 if IN ACCORDANCE WITH THE TERMS OF THE POLICY. IF a company has <--
23 been suspended pursuant to section 502 of the act of May 17,
24 1921 (P.L.789, No.285), known as "The Insurance Department Act
25 of one thousand nine hundred and twenty-one," the payment of any
26 such member's monetary claims shall remain subject to
27 prohibition ANY CONDITION of said section 502. of payments of <--
28 moneys without the prior written approval of the Insurance
29 Commissioner. The company shall not offset against or deduct
30 from the member's CLAIM FOR unearned premiums or a loss payable <--
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1 by the company to the member under his policy provisions or any <--
2 other monetary claims of the member, the amount of OR ANY PART <--
3 OF any such assessment. No member shall offset against or deduct
4 from an assessment the amount of any of his monetary claims OR <--
5 ANY PART OF against the company including but not limited to a
6 claim for unearned premiums or a claim for a loss payable to the
7 member. by the company under the member's policy provisions. The <--
8 Insurance Commissioner may, by written order, relieve the
9 company from an assessment or other proceedings to restore such
10 assets during the time fixed in such order and in such order OR <--
11 may prohibit the company from making, continuing, collecting or
12 proceeding with an assessment or such other proceedings during
13 the time fixed in such order. Any domestic company which shall
14 be deficient in providing the unearned premium reserve required
15 hereby may, notwithstanding such deficiency, come under this act
16 on the condition that it shall each year thereafter reduce such
17 deficiency at least fifteen per centum (15%) of the original
18 amount thereof, and in such case it may increase its assessments
19 accordingly.
20 The provisions of this section are not applicable to
21 assessments made upon the members of a company by the Insurance
22 Commissioner pursuant to the authority granted him by Article V,
23 act of May 17, 1921 (P.L.789, No.285), known as "The Insurance
24 Department Act of one thousand nine hundred and twenty-one."
25 Section 2. This act shall take effect immediately.
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