1Creating the Insurance Regulation and Oversight Fund; and
2providing for its use.

3The General Assembly of the Commonwealth of Pennsylvania
4hereby enacts as follows:

5Section 1. Short title.

6This act shall be known and may be cited as the Insurance
7Regulation and Oversight Fund Act.

8Section 2. Definitions.

9The following words and phrases when used in this act shall
10have the meanings given to them in this section unless the
11context clearly indicates otherwise:

12"Commissioner." The Insurance Commissioner of the
13Commonwealth or his duly authorized representative.

14"Department." The Insurance Department of the Commonwealth.

15"Fund." The Insurance Regulation and Oversight Fund created
16under this act.

17Section 3. Purpose and use of fund.

1(a) Creation and purpose of fund.--To provide for the
2department's regulation, management, development and oversight
3of the Commonwealth's insurance industry, beginning July 1,
42013, and every fiscal year thereafter, the department's
5operating costs and expenses shall be paid from a special fund
6called the Insurance Regulation and Oversight Fund, which is
7hereby created in the State Treasury.

8(b) Limitations on use.--Moneys in the fund shall not be
9used to pay the department's operating costs or expenditures
10when those costs and expenditures arise from actions, duties or
11functions that are payable from other dedicated sources of
12funding including, but not limited to, the following:

13(1) The rehabilitation and liquidation of insurance
14companies pursuant to Article V of the act of May 17, 1921
15(P.L.789, No.285), known as The Insurance Department Act of
161921.

17(2) The Catastrophic Loss Benefits Continuation Fund
18under 75 Pa.C.S. § 1798.4 (relating to Catastrophic Loss
19Benefits Continuation Fund).

20(3) The Underground Storage Tank Indemnification Fund
21under the act of July 6, 1989 (P.L.169, No.32), known as the
22Storage Tank and Spill Prevention Act.

23(4) The Workers Compensation Security Fund pursuant to
24the act of July 1, 1937 (P.L.2532, No.470), known as the
25Workers' Compensation Security Fund Act.

26(5) The Medical Care Availability and Reduction of Error
27Fund under the act of March 20, 2002 (P.L.154, No.13), known
28as the Medical Care Availability and Reduction of Error
29(Mcare) Act.

30(6) The Children's Health Insurance Program under the

1act of May 17, 1921 (P.L.682, No.284), known as The Insurance
2Company Law of 1921.

3Section 4. Deposit of moneys to the fund and appropriation and
4expenditure of the fund.

5(a) Deposits.--The following amounts shall be deposited into
6the fund:

7(1) fifty percent of all licenses and fees collected,
8received or derived by the department each month;

9(2) all funds and moneys collected, received or derived
10from all penalties, fines or settlements received by the
11department <-in fiscal year 2013-2014; and

12(3) all augmentations and reimbursements made to the
13department by regulated entities as a result of financial and
14market regulation activities for which regulated entities are
15responsible for payment.

16(b) Exclusion from deposit.--Moneys collected pursuant to 75
17Pa.C.S. § 6506 (relating to surcharge) and deposited into the
18General Fund pursuant to section 1798-E of the act of April 9,
191929 (P.L.343, No.176), known as The Fiscal Code, shall not be
20deposited into the fund.

21(c) Annual appropriation.--The General Assembly shall
22annually appropriate moneys from the fund to the department, and
23the department may expend the appropriated moneys only for the
24purposes authorized under this act. The department shall
25annually submit a proposal for its expenditure of fund moneys
26for the succeeding fiscal year to the Secretary of the Budget at
27the time or times required by, and in accordance with the act of
28April 9, 1929 (P.L.177, No.175), known as The Administrative
29Code of 1929.

30(d) Fiscal year 2013-2014.--If during the Commonwealth's

1fiscal year 2013-2014 the commissioner and the Secretary of the
2Budget determine that the cash balance and the current estimated
3receipts of the fund are insufficient at any time during that
4fiscal year to promptly meet the department's expenses payable
5from the fund, then the State Treasurer is hereby authorized and
6directed to transfer from the General Fund, Workers'
7Compensation Security Fund or Underground Storage Tank
8Indemnification Fund to the fund such moneys as the Governor
9shall from time to time direct. Moneys transferred from the
10General Fund, Workers' Compensation Security Fund or Underground
11Storage Tank Indemnification Fund to the fund shall be available
12during fiscal year 2013-2014 to be used for the purposes of the
13fund under this act upon their receipt in the fund. The fund
14shall reimburse the General Fund, Workers' Compensation Security
15Fund or Underground Storage Tank Indemnification Fund for any
16moneys transferred to the fund pursuant to this subsection by
17transferring to the General Fund, Workers' Compensation Security
18Fund or Underground Storage Tank Indemnification Fund an amount
19equal to that transferred from the General Fund, Workers'
20Compensation Security Fund or Underground Storage Tank
21Indemnification Fund during fiscal year 2013-2014 at such times
22as the Governor shall direct, but full reimbursement shall be
23made from the fund to the General Fund or Workers' Compensation
24Security Fund or Underground Storage Tank Indemnification Fund
25before June 15, 2014. The Secretary of the Budget shall notify
26the chairman and minority chairman of the Appropriations
27Committee of the Senate and the chairman and minority chairman
28of the Appropriations Committee of the House of Representatives
29of any transfers and reimbursements made pursuant to this
30subsection in writing within 15 days of the date on which they

1are made.

2Section 5. Retention.

3At the end of the fiscal year, the fund shall retain an
4amount equal to not more than 100% of the total expenditures and
5commitments by the department from the fund in the immediately
6preceding fiscal year. If the balance in the fund at the end of
7the fiscal year exceeds this retention amount, then that amount
8of the fund which exceeds the retention amount shall be lapsed
9and deposited in the General Fund within 30 days of the end of
10the fiscal year.

11Section 6. Effective date.

12This act shall take effect immediately.