PRINTER'S NO. 3911
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2365
Session of
2015
INTRODUCED BY MATZIE, GIBBONS, READSHAW, GERGELY, O'BRIEN,
McCARTER, McNEILL, THOMAS, COHEN, ROZZI AND BULLOCK,
SEPTEMBER 23, 2016
REFERRED TO COMMITTEE ON INSURANCE, SEPTEMBER 23, 2016
AN ACT
Providing for certain nonnatural earthquake insurance coverage;
conferring powers and imposing duties on the Insurance
Department; and providing for enforcement and penalties.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Short title.
This act shall be known and may be cited as the Nonnatural
Earthquake Insurance Coverage Act.
Section 2. Legislative intent.
The General Assembly finds and declares as follows:
(1) The increased drilling activity for natural gas in
this Commonwealth has provided an economic benefit to the
Commonwealth.
(2) Seismic testing is a process whereby an image of the
subsurface is created and the data obtained is then used by
an oil and gas company to locate the best place to drill.
(3) Seismic testing uses blasts of sound that can cause
earthquake-like effects.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
(4) These seismic tests can result in damage to a
structure's foundation or cause other damage to property.
(5) Often times a homeowner purchases an earthquake
endorsement for an insurance policy with the understanding
that the homeowner's property will be covered in the event
that the property is damaged by all earth movement events,
but the homeowner then discovers that the policy does not
cover nonnatural or human activity that causes earth
movement.
Section 3. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Claim." A formal request to an insurance company asking for
a payment based on the terms of the insurance policy.
"Department." The Insurance Department of the Commonwealth.
"Earthquake." A shaking of a part of the earth's surface
that often causes damage.
"Endorsement." A written provision that adds to, deletes or
modifies the provisions of the insurance contract to which the
provision is attached.
Section 4. Nonnatural earthquake insurance coverage.
No insurance policy, or any endorsement thereto, covering
owner-occupied private residential property located in this
Commonwealth shall, for the purpose of payment of a claim or any
other benefit in the policy or endorsement, distinguish between
earthquakes occurring naturally and earthquakes caused by
nonnatural or human activity.
Section 5. Powers of the department.
The department shall ensure compliance with this act and
20160HB2365PN3911 - 2 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
shall investigate potential violations of this act based upon
information received from homeowners, insurers and other sources
the department deems necessary.
Section 6. Enforcement.
Upon departmental determination of a violation of this act,
the department shall notify the homeowner and the insurer of the
department's finding. The notice shall specify the nature of the
violation and a remedy as determined by the department.
Section 7. Penalties.
A violation of this act shall also be a violation of the act
of July 22, 1974 (P.L.589, No.205), known as the Unfair
Insurance Practices Act.
Section 8. Retroactivity.
The provisions of this act shall apply to policies and
endorsements issued or executed after the effective date of this
section that offer earthquake insurance for naturally occurring
events.
Section 9. Effective date.
This act shall take effect immediately.
20160HB2365PN3911 - 3 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19