PRIOR PRINTER'S NOS. 1209, 2536, 2775, PRINTER'S NO. 2851 2787
No. 1083 Session of 1979
INTRODUCED BY MESSRS. FISHER, KOWALYSHYN, FREIND, D. R. WRIGHT, LEHR, MOWERY, POTT, J. L. WRIGHT, JR., CESSAR, POLITE, GOODMAN, CALTAGIRONE, MRS. M. H. GEORGE, MESSRS. REED, BROWN, COCHRAN, ANDERSON, ARMSTRONG, MRS. ARTY, MESSRS. BITTLE, BURD, BRUNNER, CIMINI, MRS. M. R. CLARK, MESSRS. DORR, GALLEN, GEESEY, GOEBEL, HALVERSON, PICCOLA, PUNT, SALVATORE MISS SIRIANNI, MESSRS. SCHEAFFER, ZORD, S. E. HAYES, JR., MRS. HONAMAN, MESSRS. KNEPPER, MADIGAN, MILLER, NOYE, GRIECO, PETERSON, WEIDNER, BRANDT, A. C. FOSTER, JR., W. W. FOSTER, McCLATCHY, D. M. O'BRIEN, SPENCER, L. E. SMITH, PYLES, THOMAS, VROON, WILSON, WHITE, YAHNER, E. R. LYNCH, MACKOWSKI, E. H. SMITH, HASAY, GRUPPO, PITTS, DIETZ AND MRS. E. Z. TAYLOR, APRIL 25, 1979
AS AMENDED ON THIRD CONSIDERATION, HOUSE OF REPRESENTATIVES, FEBRUARY 5, 1980
AN ACT 1 Amending Title 42 (Judiciary and Judicial Procedure) of the 2 Pennsylvania Consolidated Statutes, adding provisions 3 relating to product liability actions. 4 The General Assembly of the Commonwealth of Pennsylvania 5 hereby enacts as follows: 6 Section 1. Subchapter B of Chapter 55 of Title 42, act of 7 November 25, 1970 (P.L.707, No.230), known as the Pennsylvania 8 Consolidated Statutes, is amended by adding a section to read: 9 § 5537. Product liability actions. 10 (a) General 12-year statute of repose.--No product liability <-- 11 (A) GENERAL STATUTE OF REPOSE.-- <-- 12 (1) NO PRODUCT LIABILITY action, as defined in section
1 8352 (relating to definitions), ARISING OUT OF CONSUMER <-- 2 GOODS, AS DEFINED IN 13 PA.C.S. § 9109 (RELATING TO 3 CLASSIFICATION OF GOODS: "CONSUMER GOODS"; "EQUIPMENT"; "FARM 4 PRODUCTS"; "INVENTORY"), may be brought more than 12 years 5 from the time the person who is primarily responsible for 6 manufacturing the final product parted with its possession 7 and control, or sold it, whichever occurred last. 8 (2) NO PRODUCT LIABILITY ACTION, AS DEFINED IN SECTION <-- 9 8352, ARISING OUT OF NONCONSUMER PRODUCTS MAY BE BROUGHT MORE 10 THAN 25 YEARS FROM THE TIME THE PERSON WHO IS PRIMARILY 11 RESPONSIBLE FOR MANUFACTURING THE FINAL PRODUCT PARTED WITH 12 ITS POSSESSION AND CONTROL, OR SOLD IT, WHICHEVER OCCURRED 13 LAST. 14 (b) Two-year statute of limitation.--Any product liability 15 action accruing during or prior to the twelfth year OR TWENTY- <-- 16 FIFTH YEAR RESPECTIVELY from the time set forth in subsection 17 (a) shall be brought within two years after the date on which 18 that action accrued. However, this subsection shall not be 19 construed to alter any contrary provision contained in Title 13 20 (relating to commercial code). 21 (c) Action for indemnity or contribution.--An action for 22 indemnity or contribution, other than an action arising out of a 23 written contract, shall be commenced within the period of time 24 set forth in this section, plus 180 days, unless extended by the 25 court, for good cause shown. An action for indemnity or 26 contribution may be commenced at the time the party seeking 27 indemnity or contribution is named a defendant in any action, 28 whether or not the party seeking indemnity or contribution has 29 come under a fixed obligation to pay damages in the product 30 liability action brought against it. 19790H1083B2851 - 2 -
1 (d) Exceptions.--The limitation period provided in 2 subsection (a) shall not apply to: 3 (1) An action based solely upon any theory or theories 4 of negligence. 5 (2) An action based upon fraudulent misrepresentation, 6 fraudulent concealment or fraudulent nondisclosure by the 7 defendant. 8 (3) An action based upon a negotiated contractual 9 obligation which provides for a different period of 10 limitation in which the action may be commenced. However, if 11 the negotiated contractual obligation provides for a shorter 12 period of limitation, such shorter period shall not be 13 applicable to the rights of persons who were not parties to 14 such negotiated contractual obligation. If the contract 15 provides for a shorter statute of repose, the shorter time 16 period shall be plainly disclosed either in writing or on the 17 product, provided no reduction or limitation of the period of 18 limitation stated in subsection (a) shall be applicable to 19 consumer goods as defined in 13 Pa.C.S. § 9109 (relating to 20 classification of goods; "consumer goods"; "equipment"; "farm 21 products"; "inventory"). 22 (4) An action for damages to the person caused by the 23 use of or exposure to any product or substance which causes 24 injury of a latent or incremental nature which was not 25 manifested or reasonably detectable prior to the expiration 26 of the period set out in subsection (a). As used in this 27 paragraph, "injury of a latent or incremental nature" shall 28 include but not be limited to, injury caused by use of or 29 exposure to toxic or hazardous substances, radioactive 30 materials, ionizing radiation, any materials used in the 19790H1083B2851 - 3 -
1 generation of nuclear energy or power, any controlled 2 substance, narcotic or new drug as defined by the act of 3 April 14, 1972 (P.L.233, No.64), known as "The Controlled 4 Substance, Drug, Device and Cosmetic Act," or any other drug. 5 Section 2. Chapter 83 of Title 42 is amended by adding a 6 subchapter to read: 7 CHAPTER 83 8 PARTICULAR RIGHTS AND IMMUNITIES 9 * * * 10 SUBCHAPTER E 11 PRODUCT LIABILITY ACTIONS 12 Sec. 13 8351. Short title of subchapter. 14 8352. Definitions. 15 8353. Strict liability in tort. 16 8354. Permissible theories for product liability actions. 17 8355. Defense for product modification, alteration or 18 deterioration. 19 8356. Product misuse by persons other than defendant. 20 8357. Liability for product design or formula. 21 8358. Failure to specify, instruct or warn. 22 8359. State of the art. 23 8360. Inadmissibility of evidence of improvements. 24 8361. Evidence of collateral benefits. 25 8362. Punitive and exemplary damages. 26 8363. Comparative responsibility in product liability 27 actions. 28 § 8351. Short title of subchapter. 29 This subchapter shall be known and may be cited as the 30 "Product Liability Law." 19790H1083B2851 - 4 -
1 § 8352. Definitions. 2 The following words and phrases when used in this subchapter 3 shall have, unless the context clearly indicates otherwise, the 4 meanings given to them in this section: 5 "Manufacturer." A seller of a product who manufactures the 6 finished product or any component substance or part thereof. The 7 term includes any seller who: 8 (1) has actual knowledge of a defect in a product; 9 (2) creates and furnishes a manufacturer with 10 specifications for manufacturing the product when the 11 specifications are related to the alleged defect; 12 (3) otherwise exercises some substantial control over 13 all or a portion of the manufacturing process; 14 (4) alters or modifies a product in a substantial way 15 before it is sold to a user or consumer; 16 (5) is a business entity owned or controlled by the 17 manufacturer of the allegedly defective product; 18 (6) is the actual importer of the product, if the party 19 instituting an action pursuant to this subchapter is unable 20 to obtain valid in personam jurisdiction over a foreign 21 product manufacturer; or 22 (7) sells a product manufactured by a person who has 23 been judicially declared insolvent or bankrupt or who has no 24 identifiable successor in interest. 25 A seller not otherwise a manufacturer shall be deemed to be a 26 manufacturer unless the seller discloses the identity of the 27 actual manufacturer subsequent to the incident which is the 28 basis of the product liability action and the disclosure is made 29 within 45 days after service of process is made on the defendant 30 or after receiving a written request for such disclosure, 19790H1083B2851 - 5 -
1 whichever shall first occur. 2 "Manufactures." Constructs, designs, fabricates, formulates, 3 installs, prepares or assembles a product. 4 "Person." An individual, corporation, partnership, business 5 trust, unincorporated organization, association, professional 6 association or joint stock company. 7 "Product." Tangible personal property, including fixtures, 8 but not including real property or buildings. 9 "Product liability action" or "action." Any action brought 10 for or on account of personal injury, illness, disease, 11 disability, death or property damage caused by the manufacture, 12 construction, design, formula, installation, preparation, 13 assembly, testing, marketing, packaging, labeling or sale of any 14 product or the failure to warn or protect against a danger or 15 hazard in the use, misuse or unintended use of any product, or 16 the failure to provide proper instructions for the use of any 17 product, including such an action brought under Title 13 18 (relating to commercial code). 19 "Seller." Any person, including a wholesaler, distributor or 20 retailer, who is engaged in the business of selling or leasing 21 such products for resale, use or consumption. 22 "User or consumer." A person who uses or consumes a product, 23 including bystanders or other persons who are harmed by a 24 product. 25 § 8353. Strict liability in tort. 26 (a) General rule.--A manufacturer is subject to liability 27 for physical harm caused to the person or property of the user 28 or consumer only if all of the following conditions are met: 29 (1) The product was manufactured in a defective 30 condition. 19790H1083B2851 - 6 -
1 (2) The product was expected to and did reach the user 2 or consumer without substantial change in the condition in 3 which it was manufactured. 4 (3) The defective condition was unreasonably dangerous 5 to the person or property of the user or consumer. 6 (4) The defective condition caused the harm sustained by 7 the person or property of the user or consumer. 8 (b) Lack of care or contract not necessary.--The rule stated 9 in subsection (a) applies although: 10 (1) the manufacturer has exercised all possible care in 11 the manufacture and sale of the product; and 12 (2) the user or consumer has not bought the product from 13 or entered into any contractual relation with the 14 manufacturer. 15 (c) Manufacturer not guarantor.--In any action brought on 16 the theory of strict liability as set forth in subsection (a), 17 the trier of fact shall not be instructed that the manufacturer 18 is the guarantor of the safety of the product. 19 § 8354. Permissible theories for product liability actions. 20 (a) General rule.--Product liability actions shall be 21 brought only upon the theories of: 22 (1) Negligence. 23 (2) Breach of contract, including breach of warranty, 24 express or implied. 25 (3) Breach of, or failure to discharge, a duty to warn 26 or instruct, whether deliberate or negligent. 27 (4) Misrepresentation, concealment or nondisclosure, 28 whether fraudulent or negligent. 29 (5) In the case of a manufacturer, strict liability in 30 tort as defined in this subchapter, except as set forth in 19790H1083B2851 - 7 -
1 section 8358 (relating to failure to specify, instruct or 2 warn). 3 (b) Action against seller.--No product liability action 4 based on the theory of strict liability in tort shall be 5 commenced or maintained against any seller of a product who is 6 not otherwise a manufacturer. This subsection shall not prevent 7 an action based upon any of the other theories of liability 8 listed in subsection (a) from being brought against a seller. 9 § 8355. Defense for product modification, alteration or 10 deterioration. 11 (a) General rule.--A defendant shall not be liable for that 12 portion of injury or damage caused by an alteration or 13 modification that would not have occurred but for the fact that 14 the product was altered or modified by a person other than the 15 defendant unless the plaintiff proves by a preponderance of the 16 evidence that: 17 (1) the alteration or modification was in accordance 18 with the defendant's instructions or specifications; 19 (2) the alteration or modification was made with the 20 express consent of the defendant; or 21 (3) the alteration or modification was the result of 22 conduct that reasonably should have been anticipated by the 23 defendant. 24 (b) Definition.--For purposes of this section, "alteration 25 or modification" includes, but is not limited to, changes in the 26 design, formula or function of the product from that originally 27 designed, tested or intended by the defendant, or changes in or 28 removal of any safety feature or deterioration arising from 29 unreasonable failure to observe routine care and maintenance. 30 § 8356. Product misuse by persons other than defendant. 19790H1083B2851 - 8 -
1 (a) General rule.--In any product liability action, evidence 2 of misuse of the product by persons other than the defendant 3 shall be admissible. 4 (b) Definition.--For the purposes of this subsection (a), 5 misuse shall include, in addition to uses deemed to constitute 6 misuse under the law of this Commonwealth: 7 (1) Uses contrary to adequate recommendations, 8 specifications, instructions or warnings accompanying the 9 product or otherwise provided by the defendant, unless the 10 defendant knows, or is aware of facts from which a reasonable 11 person would infer, that there exist identifiable hazards 12 associated with a substantial pattern of use contrary to such 13 recommendations, specifications, instructions or warnings, 14 and fails, or has failed, to take reasonable precautions 15 against such hazards. 16 (2) Uses other than those for which persons of ordinary 17 skill and judgment (or in the case of prescription products, 18 practitioners of appropriate medical skill and judgment) 19 would normally and reasonably expect the product to be 20 suitable. 21 § 8357. Liability for product design or formula. 22 (a) Liability limited.--In any product liability action 23 based upon injury or damage alleged to have resulted from the 24 defective design or formula of a product, the manufacturer 25 responsible for the design or formula of a product shall not be 26 liable unless the plaintiff proves by a preponderance of the 27 evidence that the utilization of an alternative design or 28 formula was known or should have been known and was readily 29 available to the manufacturer at the time the product was 30 manufactured and that such utilization would have prevented the 19790H1083B2851 - 9 -
1 injury or damage or resulted in less severe injury or damage. 2 (b) Considerations in determination.--In determining in 3 accordance with subsection (a) whether the product was defective 4 in design or formula, the trier of fact shall consider whether 5 an alternative design or formula should have been utilized or 6 the product should have been withheld from the market in light 7 of the following: 8 (1) The probability at the time of manufacture that the 9 product would cause the harm suffered by the user or 10 consumer. 11 (2) The seriousness of that harm. 12 (3) The technological feasibility of manufacturing the 13 product in accordance with the alternative design or formula. 14 (4) The relative costs of producing, distributing and 15 selling such an alternative design or formula. 16 (5) The new or additional or increased risk of injury or 17 damage that may result from such an alternative design or 18 formula. 19 (c) Safety or protective devices.--In any product liability 20 action in which a defect in the formulation or design of a 21 product is alleged, the manufacturer shall not be liable for 22 that portion of the injury or damage which could have been 23 avoided or reduced by attachment to, inclusion in, or use with 24 the product of a safety or protective device or substance, if 25 the defendant proves by a preponderance of the evidence that: 26 (1) the attachment, inclusion or use of such safety or 27 protective device or substance would have been inappropriate 28 to or incompatible with a function or manner of use to which 29 the product reasonably was suited; or 30 (2) such safety or protective device or substance was 19790H1083B2851 - 10 -
1 offered or recommended by the manufacturer for purchase or 2 use by the user or consumer who was injured or damaged, or by 3 such person's employer, and such person or such person's 4 employer did not purchase or use such additional safety or 5 protective device or substance. 6 § 8358. Failure to specify, instruct or warn. 7 (a) Liability limited.--In any product liability action 8 based upon an alleged failure to provide adequate 9 specifications, instructions or warnings, the manufacturer or 10 any other defendant shall not be held liable for failure to 11 specify, instruct or warn, except upon the theory of negligence. 12 (b) Considerations in determination.--In determining whether 13 adequate specifications, instructions or warnings were provided, 14 the trier of fact shall consider the following: 15 (1) The probability at the time of manufacture or sale 16 that the product would cause the injury or damage suffered by 17 the user or consumer. 18 (2) The seriousness of that injury or damage. 19 (3) The defendant's ability, at the time of manufacture 20 or sale, reasonably to anticipate that the expected product 21 user or consumer would be aware of the product's risks and 22 the nature of the potential injury or damage. 23 (4) The technological feasibility and cost of providing 24 specifications, warnings or instructions. 25 (c) Burden of proof.--In a product liability action based 26 upon a claimed failure to provide adequate specifications, 27 instructions or warnings, the plaintiff shall be required to 28 prove by a preponderance of the evidence that the failure to 29 provide adequate specifications, warnings or instructions was 30 the proximate cause of the injury or damage. 19790H1083B2851 - 11 -
1 § 8359. State of the art. 2 In any product liability action, an inference shall be 3 created that the product was not defective nor the defendant 4 negligent if the defendant proves by a preponderance of the 5 evidence that the product conformed with generally recognized 6 and prevailing standards, designs or methods of testing or 7 manufacturing of the state of the art. For the purposes of this 8 section "state of the art" means the safety, technical, 9 mechanical and scientific knowledge in existence and reasonably 10 feasible for use at the time of the manufacture of the product. 11 § 8360. Inadmissibility of evidence of improvements. 12 In any product liability action, evidence of advancements or 13 changes in technical knowledge or techniques, in design, theory 14 or philosophy, or in manufacturing or testing techniques or of 15 any alteration, modification, improvement or change in or 16 discontinuance of the manufacture, construction, design, 17 formula, installation, preparation, assembly, testing, 18 marketing, packaging, labeling or sale of a product, whether 19 made by the defendant or any other party, which have been made, 20 learned or placed into common use subsequent to the time the 21 person who is primarily responsible for manufacturing the final 22 product allegedly causing injury, death or damage parted with 23 its possession and control, or sold it, whichever occurred last, 24 shall not be admissible for any purpose: Provided, however, That 25 this section does not require the exclusion of evidence of 26 subsequent advancements, alterations, modifications, 27 improvements or changes when offered for the purpose of 28 contradicting a witness or of impeaching relevant testimony. 29 § 8361. Evidence of collateral benefits. 30 (a) General rule.--In any product liability action in which 19790H1083B2851 - 12 -
1 compensatory damages are sought, the defendant shall be entitled 2 to the admission of evidence as to the nature and extent of any 3 public collateral benefits or services received or to be 4 received by the plaintiff. It shall be admissible for the 5 plaintiff to show that such collateral benefits or services 6 received or to be received are subrogatable. 7 (b) Definition.--As used in this section "public collateral 8 benefits or services" mean those benefits or services that an 9 individual receives or is entitled to receive from social 10 security (except those benefits provided under Title XIX of the 11 Federal Social Security Act and except those medicare benefits 12 to which a person's entitlement depends upon use of his so- 13 called "lifetime reserve" of benefit days), workmen's 14 compensation, any State required temporary nonoccupational 15 disability and all other benefits (except the proceeds of life 16 insurance and except benefit programs not statutorily mandated) 17 received by or recoverable by an individual from any government 18 because of the injury. 19 § 8362. Punitive and exemplary damages. 20 (a) General rule.--In any product liability action, no 21 punitive or exemplary damages shall be awarded except upon a 22 finding by the trier of fact that the defendant acted with a bad 23 motive or with reckless indifference to the health and safety of 24 the users or consumers. 25 (b) Evidence.--Punitive or exemplary damages shall be 26 awardable only if the plaintiff establishes all the elements of 27 the cause of action for punitive or exemplary damages by clear 28 and convincing evidence. 29 (c) Damages stated separately.--The trier of fact shall 30 separately state the amount of punitive or exemplary damages 19790H1083B2851 - 13 -
1 awarded. 2 § 8363. Comparative responsibility in product liability 3 actions. 4 (a) General rule.--In any product liability action the 5 responsibility of the person suffering the injury or damage, as 6 well as the responsibility of all others for causing the injury 7 or damage, shall be compared by the trier of fact. The 8 responsibility of the person suffering the harm shall not bar 9 recovery for the injury or damage sustained where it was not 10 greater than the total responsibility of all parties against 11 whom recovery is sought. However, any damages allowed shall be 12 diminished in proportion to the amount of responsibility 13 attributable to the person recovering. 14 (b) Allocating damages and responsibility for each party.-- 15 The court may, and when requested by any party shall, direct the 16 jury to find separate special verdicts determining the total 17 dollar amount of damages and the percentages of responsibility 18 attributable to each party. The court shall then reduce the 19 amount of such damages in proportion to the amount of 20 responsibility attributable to the person recovering. 21 (c) Proportional liability of multiple defendants.--Where 22 the recovery is allowed against more than one defendant, each 23 defendant shall be liable for that proportion of the total 24 dollar amount awarded as damages in the ratio of his 25 responsibility to the amount of responsibility attributed to all 26 defendants against whom recovery is allowed. The plaintiff may 27 recover the full amount of the allowed recovery from any 28 defendant against whom such plaintiff is not barred from 29 recovery. Any defendant who is so compelled to pay more than his 30 percentage share may seek contribution. 19790H1083B2851 - 14 -
1 (d) Responsibility defined.--As used in this section 2 "responsibility" means conduct which was a substantial factor in 3 bringing about the harm for which damages are sought. 4 Section 3. All acts or parts of acts which are inconsistent 5 with the provisions of this act are repealed to the extent of 6 the inconsistency. 7 Section 4. (a) Insurance Commissioner to require reports.-- 8 The Insurance Commissioner, by the authority vested in him by 9 law pursuant to the act of June 11, 1947 (P.L.538, No.246), 10 known as "The Casualty and Surety Rate Regulatory Act," and 11 sections 213, 214 and 216, act of May 17, 1921 (P.L.789, 12 No.285), known as "The Insurance Department Act of one thousand 13 nine hundred and twenty-one," shall require every insurer 14 transacting the business of insurance in this Commonwealth to 15 report any and all information the commissioner may deem 16 relevant to the faithful performance of his duties in 17 determining that rates for product liability insurance are 18 neither excessive, inadequate nor unfairly discriminatory. 19 (b) Insurance Commissioner to review rates.--The 20 commissioner shall from time to time review all product 21 liability rate filings to determine their compliance with the 22 purpose of the act of June 11, 1947 (P.L.538, No.246), known as 23 "The Casualty and Surety Rate Regulatory Act," and shall within 24 one year following the effective date of this act, and annually 25 thereafter, report his findings to the General Assembly and 26 shall take such steps as may be appropriate to bring all rate 27 filings in conformity with the requirements of "The Casualty and 28 Surety Rate Regulatory Act." 29 (c) Reporting requirements.-- 30 (1) Every insurer authorized to transact business in 19790H1083B2851 - 15 -
1 this Commonwealth and providing product liability insurance 2 shall on or before March 1 of each year file with the 3 Insurance Commissioner a report upon forms approved by the 4 commissioner the following information pertaining to product 5 liability earned premium experience for: 6 (i) Basic limits liability (25,000/50,000); Bodily 7 injury (5,000/25,000); Property damage per occurrence/per 8 annual aggregate. 9 (ii) Excess limits. 10 (iii) Bodily injury liability. 11 (iv) Property damage liability. 12 (v) Pennsylvania. 13 (vi) Countrywide. 14 (vii) By classification. 15 (viii) Exposure base primarily units of sales, 16 receipts or payroll for each classification. 17 (2) Every insurer authorized to transact business in 18 this Commonwealth and providing product liability insurance 19 shall on or before March 1 of each year file with the 20 Insurance Commissioner a report upon forms approved by the 21 commissioner the following information pertaining to claims 22 experience for: 23 (i) Basic limits incurred claims. 24 (ii) Excess limits incurred claims by layer. 25 (iii) The number of paid claims. 26 (iv) The amount of paid claims. 27 (v) The number of outstanding claims. 28 (vi) The dollar amount of outstanding claims. 29 (vii) The dollars of incurred losses evaluated as of 30 27, 39, 51, 63 and 75 months. 19790H1083B2851 - 16 -
1 (viii) The number of incurred claims as of the same 2 evaluation date as of subparagraph (vii). 3 (ix) Number by size of incurred claims. 4 (x) Number by classification. 5 (xi) Number for Pennsylvania. 6 (xii) Number countrywide. 7 (xiii) Paid allocated loss adjustment expenses. 8 (xiv) Outstanding allocated loss adjustment 9 expenses. 10 (xv) Whether or not the company sets reserves for 11 product liability insurance claims filed and the annual 12 earnings of each such reserve by property and casualty 13 category for the past five years and each year 14 thereafter. 15 (xvi) Whether or not the company sets reserves for 16 any claims for product liability losses which have been 17 incurred but not reported and the annual earnings of such 18 reserves for the past five years and each year 19 thereafter. 20 (xvii) All reserves established in connection with 21 each property and casualty line or type of insurance. 22 (3) The commissioner shall make reports required by this 23 section available to the public. 24 (4) There shall be no liability on the part of and no 25 cause of action of any nature shall arise against any insurer 26 reporting under this section or its agents or employees, or 27 the commissioner or the employees of the Insurance 28 Department, for any action taken by them pursuant to this 29 section. 30 (5) The commissioner shall submit to the Governor and 19790H1083B2851 - 17 -
1 the Chairmen of the House and Senate Insurance Committees no 2 later than 36 months from the effective date of this section 3 a report. The report shall evaluate the information reported 4 by insurers as required under the provisions of paragraphs 5 (1) and (2) and such relevant data as may be necessary to 6 evaluate the operations of this section. The report may 7 include recommendations at the discretion of the 8 commissioner. 9 (d) Limitation on approval of rates.--The insurance 10 commissioner is hereby directed to disapprove any product 11 liability rate filing made by any insurer or rating organization 12 for a period of three years from the effective date of this act, 13 except: 14 (1) Upon the written consent of the insured stating his 15 reasons therefor, filed with and approved by the commissioner 16 a rate in excess of that provided by a filing otherwise 17 applicable may be used on any specific risk. The rate shall 18 become effective when such consent is filed and shall be 19 deemed to meet the requirements of this act until such time 20 as the commissioner reviews the filing and so long thereafter 21 as the filing remains in effect. 22 (2) A filing providing decreased rates for all or 23 certain classes and categories of risks. 24 Section 5. This act shall take effect in 60 days and shall 25 apply to all actions accruing after the effective date of this 26 act. D12L11CVV/19790H1083B2851 - 18 -