PRINTER'S NO. 580
No. 536 Session of 1977
INTRODUCED BY BORSKI, KOWALYSHYN, GIAMMARCO, HARPER, LIVENGOOD,
SCHMITT, F. TAYLOR, MACKOWSKI AND MADIGAN, MARCH 7, 1977
REFERRED TO COMMITTEE ON INSURANCE, MARCH 7, 1977
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," deleting countersignature
12 requirements.
13 The General Assembly of the Commonwealth of Pennsylvania
14 hereby enacts as follows:
15 Section 1. Section 501, act of May 17, 1921 (P.L.682,
16 No.284), known as "The Insurance Company Law of 1921," amended
17 August 13, 1963 (P.L.797, No.396), is amended to read:
18 Section 501. Foreign Companies, Associations, and Exchanges
19 To Do Business through Resident Agents.--No stock fire insurance
20 company, association, or exchange, not incorporated under the
21 laws of this State, authorized to transact business herein,
22 shall make, write, place, or cause to be made, written, or
23 placed, any policy, duplicate policy, or contract of insurance
1 of any kind or character, or any general or floating policy upon
2 property situated or located in this State, except after the
3 said risk has been approved in writing by an agent who is a
4 resident of or whose principal place of business is in this
5 State, regularly licensed to transact insurance business herein,
6 who shall [countersign all policies so issued, and] receive the
7 commission thereon when the premium is paid, to the end that the
8 State may receive the taxes required by law to be paid on the
9 premiums collected for insurance on all property located in this
10 State. Nothing in this act shall be construed to prevent any
11 such foreign insurance company, association, or exchange,
12 authorized to transact business in this State, from issuing
13 policies at its principal or department offices, covering
14 property in this State, if such policies are issued upon
15 applications procured and submitted to such company,
16 association, or exchange by agents who are residents of this
17 State, and licensed to transact the business of insurance
18 herein, and who shall receive the commission thereon when paid.
19 No part of this section shall apply to direct insurance covering
20 the rolling stock of railroad corporations, or property in
21 transit while in the possession and custody of railroad
22 corporations or other common carriers nor to the property of
23 such common carriers used or employed by them in their business
24 as common carriers of freight, merchandise, or passengers, nor
25 in the case of bid bonds issued in connection with public or
26 private contracts. The provisions of this section, except as to
27 payment of taxes, shall not apply to foreign insurance
28 exchanges, authorized to transact business in this Commonwealth,
29 but maintaining no office in this Commonwealth, and paying no
30 commissions to agents or representatives in this Commonwealth.
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1 Section 2. As much as relates to countersignature, in
2 subsection 2 of section 506, of the act added August 23, 1961
3 (P.L.1081, No.488), is amended to read:
4 Section 506. Fire Insurance Contract; Standard Policy
5 Provisions; Permissible Variations.--
6 * * *
7 2. Except as provided elsewhere in this section, no
8 insurance company, association or exchange shall issue a policy
9 affording fire insurance, as defined in this section, on
10 property in this Commonwealth, unless such policy contains the
11 following provisions as to such insurance:
12 * * *
13 IN WITNESS WHEREOF, this Company has executed and attested these
14 presents: but this policy shall not be valid unless counter-
15 signed by the duly authorized agent of this Company at .........
16 ................................................................
17 Secretary. President.
18 [Countersigned this ....... day of ............ 19 .............
19 Agent.]
20 * * *
21 Section 3. Subparagraph (a), subsection 5 of section 506 of
22 the act added August 23, 1961 (P.L.1081, No.488), is amended to
23 read:
24 Section 506. Fire Insurance Contract; Standard Policy
25 Provisions; Permissible Variations.--
26 * * *
27 5. Notwithstanding any other provisions of this section:
28 (a) An insurer may print on its policy its name, such device
29 or devices as the insurer issuing said policy may desire, the
30 location of its principal office, and the date of its formation,
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1 plan of operation, the amount of its paid up capital, if any,
2 the name of its officers and agents, and the number and date of
3 the policy[, and, if it is issued through an agent, the words
4 "this policy shall not be valid unless countersigned by the duly
5 authorized agent of the company at ......... "].
6 * * *
7 Section 4. Section 610 of the act, amended August 13, 1963
8 (P.L.797, No.396), is amended to read:
9 Section 610. Foreign Companies, Associations, and Exchanges
10 to Do Business through Resident Agents.--Other than companies
11 subject to the provisions of section five hundred and one of
12 this act, no insurance company, association, or exchange, not
13 incorporated or organized under the laws of this Commonwealth,
14 but authorized to transact business herein, shall make, write,
15 place, or cause to be made, written, or placed, any policy or
16 contract of insurance in this Commonwealth except through an
17 agent, whether an individual, copartnership or corporation, who
18 or which is a resident of this Commonwealth, or maintains his,
19 her, or its principal place of business in this Commonwealth,
20 and who or which shall receive a commission thereon when the
21 premium is paid, to the end that the State may receive the taxes
22 required by law to be paid on the premiums collected for
23 insurance written or placed in this State: Provided, however,
24 That the Insurance Commissioner may, under such regulations and
25 restrictions as may be deemed necessary, issue licenses to
26 nonresident agents who are licensed in the state in which they
27 reside[, but such agents shall not countersign any policy or
28 contract of insurance, but all such policies and contracts shall
29 be signed only by resident agents who or which shall receive a
30 commission thereon when the premium is paid: Provided further,
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1 That countersignature shall not be required in the case of
2 policies and contracts as defined in clause (1) of subdivision
3 (a) of section two hundred two of this act issued by life
4 insurance companies nor in the case of bid bonds issued in
5 connection with public or private contracts].
6 Section 5. Section 724 of the act, added August 14, 1963
7 (P.L.922, No.439), is amended to read:
8 Section 724. Agents; Defined.--An agent is a person, firm,
9 association, corporation, cooperative or joint-stock company,
10 authorized in writing by a title insurance company directly or
11 indirectly:
12 (1) To solicit risks and collect premiums, and to issue [or
13 countersign] policies in its behalf; or
14 (2) To solicit risks and collect premiums in its behalf.
15 No bank, trust company, bank and trust company or other
16 lending institution, mortgage service, mortgage brokerage or
17 mortgage guaranty company or any officer or employe of any of
18 the foregoing shall be permitted to act as an agent for a title
19 insurance company. The word "agent" shall not include approved
20 attorneys, nor shall it include officers and salaried employes
21 of any title insurance company authorized to do a title
22 insurance business within this Commonwealth.
23 Section 6. Section 805 of the act is amended to read:
24 Section 805. [Countersigning and] Delivering of Policies.--A
25 mutual insurance company, other than a mutual life company,
26 shall comply with the provisions of any law, applicable to stock
27 insurance companies effecting the same kind of insurance,
28 requiring that policies be [countersigned and] delivered through
29 a resident agent. This requirement shall not apply to any policy
30 of such company on which no commission shall be paid to any
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1 local agent.
2 Section 7. This act shall take effect in 60 days.
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