PRINTER'S NO. 2756
No. 2121 Session of 1988
INTRODUCED BY O'DONNELL, JANUARY 27, 1988
REFERRED TO COMMITTEE ON INSURANCE, JANUARY 27, 1988
AN ACT
1 Amending the act of June 11, 1947 (P.L.538, No.246), entitled
2 "An act relating to the regulation of rates for insurance
3 which may be written by stock or mutual casualty insurance
4 companies, associations or exchanges, including fidelity,
5 surety and guaranty bonds and all other forms of motor
6 vehicle insurance, and title insurance; to rating and
7 advisory organizations; conferring on the Insurance
8 Commissioner the power and duty of supervising and regulating
9 persons, associations, companies and corporations, and of
10 enforcing the provisions of this act; prescribing and
11 regulating the practice and procedure before the
12 commissioner, and procedure for review by the courts; giving
13 the Court of Common Pleas of Dauphin County exclusive
14 jurisdiction over certain proceedings; prescribing penalties
15 and providing for enforcement thereof, and repealing
16 inconsistent acts," further providing for classification of
17 risk for automobile insurance.
18 The General Assembly of the Commonwealth of Pennsylvania
19 hereby enacts as follows:
20 Section 1. The act of June 11, 1947 (P.L.538, No.246), known
21 as The Casualty and Surety Rate Regulatory Act, is amended by
22 adding a section to read:
23 Section 4.1. Classification of Risk for Automobile
24 Insurance.--
25 (a) Notwithstanding any provision to the contrary,
1 classifications and rules and rating plans used by any insurer
2 with respect to private passenger automobile insurance shall
3 conform to the applicable requirements of this section.
4 (b) Classifications, rates and rating plans established for
5 automobile insurance shall be based only upon:
6 (1) Average miles driven weekly or annually, or both.
7 (2) Type of use, including business, agriculture and
8 pleasure.
9 (3) Vehicle make and model, vehicle characteristics,
10 features, design and options, including engine displacement and
11 ability of vehicle and its equipment to protect passengers from
12 injury.
13 (4) Daily or weekly commuting mileage.
14 (5) Number of cars insured by the insurer or number of
15 licensed operators in the household, and where there is more
16 than one vehicle driver, the proportionate use of each vehicle
17 insured under the policy by each individual driver. However, the
18 number of licensed operators shall not be used as an indirect
19 measure of marital status.
20 (6) Amount of insurance.
21 (7) The anticipated cost of vehicle repairs or replacement,
22 as measured by age, price, cost or value of the insured
23 automobile, and other factors directly relating to that
24 anticipated cost.
25 (8) The geographic location of the vehicle.
26 (9) Any other factor as determined by the commissioner.
27 (c) Each insurer shall establish a merit rating plan for
28 automobile insurance. Such plan shall provide for premium
29 surcharges for any or all coverages for automobile insurance,
30 based upon any or all of the following, when the information
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1 becomes available to the insurer:
2 (1) Substantially at-fault accidents.
3 (2) Convictions for any violations of Title 75 of the
4 Pennsylvania Consolidated Statutes (relating to vehicles).
5 (3) Inexperience of the driver.
6 (4) Any other factor approved by the commissioner.
7 (d) An insurer shall not establish or maintain rates or
8 rating classifications for automobile insurance based upon
9 gender or marital status.
10 (e) Notwithstanding the provisions of section 4, an insurer
11 may, for any person with driving experience of less than five
12 years, establish classifications, rates or rating plans based on
13 gender, age, marital status or any other actuarially significant
14 factor which is supported by sound actuarial principles relating
15 to reasonably anticipated experience.
16 Section 2. This act shall take effect in 60 days.
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