Trial Engrossment of Amendment A05615 to Senate Bill 0877 P.N. 1135, Regular Session 2017-2018

A05615

THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

No.

877

Session of

2017

INTRODUCED BY WHITE AND WARD, SEPTEMBER 6, 2017

REFERRED TO BANKING AND INSURANCE, SEPTEMBER 6, 2017

AN ACT

Amending the act of May 17, 1921 (P.L.789, No.285), entitled "An

act relating to insurance; establishing an insurance

department; and amending, revising, and consolidating the law

relating to the licensing, qualification, regulation,

examination, suspension, and dissolution of insurance

companies, Lloyds associations, reciprocal and inter-

insurance exchanges, and certain societies and orders, the

examination and regulation of fire insurance rating bureaus,

and the licensing and regulation of insurance agents and

brokers; the service of legal process upon foreign insurance

companies, associations or exchanges; providing penalties,

and repealing existing laws," in insurance producers, further

providing for rebates prohibited and for inducements

prohibited.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Sections 645-A and 646-A of the act of May 17,

1921 (P.L.789, No.285), known as The Insurance Department Act of

1921, are amended to read:

Section 645-A. Rebates prohibited.

(a) Prohibition.--[No] Except as otherwise provided in this

section, no insurance producer shall, directly or indirectly,

offer, promise, allow, give, set off or pay a rebate of, or part

of, a premium payable on the contract of insurance or on the

insurance producer's commission, earnings, profits, dividends or

other benefit founded, arising, accruing or to accrue thereon,

or any special advantage in date of policy or age of issue, or

any paid employment or contract for services of any kind, or any

other valuable consideration or inducement, to or for insurance

on a risk in this Commonwealth which is not specified in the

contract of insurance.

(a.1) Construction.--Nothing in this section shall be

construed as prohibiting an insurance producer from offering or

giving to an insured or prospective insured money or any favor,

advantage, object, valuable consideration or anything other than

money which has a cost of or a redeemable value less than or

equal to $100 which is not specified in the contract of

insurance. The commissioner may increase this amount upon

publication of notice in the Pennsylvania Bulletin.

(a.1) Receipt contingent on purchase.--Notwithstanding any

other provision of this section to the contrary, an insurance

producer may not make receipt of anything of value contingent on

the purchase of insurance.

(b) Penalty.--A person that violates subsection (a) commits

a misdemeanor of the third degree.

Section 646-A. Inducements prohibited.

(a) Prohibition.--[No] Except as otherwise provided in this

section, no insurance producer shall, directly or indirectly,

offer, promise, give, option, sell or purchase any stocks,

bonds, securities or property, or any dividends or profits

accruing or to accrue thereon, or other thing of value

whatsoever, as an inducement to purchase a contract of

insurance. Nothing in this section shall be construed to prevent

the taking of a bona fide obligation, with legal interest, in

A05615 - 2 -

payment of any premium. This section shall not prohibit payment

or receipt of referral fees in accordance with this act.