PRINTER'S NO. 3285
No. 2426 Session of 1976
INTRODUCED BY TAYLOR, ROSS, COHEN, VROON, STAHL, SCHMITT,
ZEARFOSS AND A. K. HUTCHINSON, MAY 26, 1976
REFERRED TO COMMITTEE ON CONSUMER PROTECTION, MAY 26, 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 member shall be assessed for any loss that occurred
7 when his policy was not in effect and no assessment shall be
8 made after two years from the expiration or cancellation date of
9 a policy and no such assessment shall be made without the prior
10 written approval of the Insurance Commissioner. For each year
11 the policy is in force, such assessment shall be an amount not
12 greater than the annual or the average yearly cost or premium of
13 the policy for the period it has been in effect. Such assessment
14 shall not exceed two times the average yearly cost or premium of
15 the policy for the period it has been in effect. Notwithstanding
16 any assessment being made, an assessed member's monetary claims
17 against the company including but not limited to his claims for
18 unearned premiums or a claim for a loss payable to the member
19 under his policy provisions must be processed and paid in a
20 routine manner; and if a company has been suspended pursuant to
21 section 502 of the act of May 17, 1921 (P.L.789, No.285), known
22 as "The Insurance Department Act of one thousand nine hundred
23 and twenty-one," the payment of any such member's monetary
24 claims shall remain subject to prohibition of said section 502
25 of payments of moneys without the prior written approval of the
26 Insurance Commissioner. The company shall not offset against or
27 deduct from the member's unearned premiums or a loss payable by
28 the company to the member under his policy provisions or any
29 other monetary claims of the member the amount of any such
30 assessment. No member shall offset against or deduct from an
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1 assessment the amount of any of his monetary claims against the
2 company including but not limited to a claim for unearned
3 premiums or a claim for a loss payable to the member by the
4 company under the member's policy provisions. The Insurance
5 Commissioner may, by written order, relieve the company from an
6 assessment or other proceedings to restore such assets during
7 the time fixed in such order and in such order may prohibit the
8 company from making, continuing, collecting or proceeding with
9 an assessment or such other proceedings during the time fixed in
10 such order. Any domestic company which shall be deficient in
11 providing the unearned premium reserve required hereby may,
12 notwithstanding such deficiency, come under this act on the
13 condition that it shall each year thereafter reduce such
14 deficiency at least fifteen per centum (15%) of the original
15 amount thereof, and in such case it may increase its assessments
16 accordingly.
17 The provisions of this section are not applicable to
18 assessments made upon the members of a company by the Insurance
19 Commissioner pursuant to the authority granted him by Article V,
20 act of May 17, 1921 (P.L.789, No.285), known as "The Insurance
21 Department Act of one thousand nine hundred and twenty-one."
22 Section 2. This act shall take effect immediately.
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