PRINTER'S NO. 1456
No. 1269 Session of 1991
INTRODUCED BY LESCOVITZ, JOSEPHS, COLAIZZO, PISTELLA, KRUSZEWSKI
AND DALEY, APRIL 23, 1991
REFERRED TO COMMITTEE ON INSURANCE, APRIL 23, 1991
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 group
12 policies.
13 The General Assembly of the Commonwealth of Pennsylvania
14 hereby enacts as follows:
15 Section 1. The act of May 17, 1921 (P.L.682, No.284), known
16 as The Insurance Company Law of 1921, is amended by adding
17 sections to read:
18 Section 354.1. Out-of-State Coverage.--(a) No insurer shall
19 issue in this Commonwealth group property and casualty insurance
20 coverage provided under a group policy issued in another state,
21 or deliver or issue for delivery in this Commonwealth a
22 certificate of group property and casualty insurance evidencing
1 coverage under a group policy issued in another state unless
2 such coverage is in compliance with the requirements of this act
3 or any other applicable act.
4 (b) (1) For group property and casualty insurance coverage
5 provided in this Commonwealth under a policy issued in another
6 state, all group policies, certificates, amendments,
7 endorsements and enrollment forms shall be filed with the
8 Insurance Commissioner for approval. The insurer shall also file
9 with the Insurance Commissioner evidence of approval in the
10 state where the group policy is issued.
11 (2) Forms so filed for approval shall be deemed approved at
12 the expiration of sixty days after filing, unless earlier
13 approved or disapproved by the Insurance Commissioner. The
14 Insurance Commissioner, by written notice to the insurer, may
15 within such sixty-day period extend the period for approval or
16 disapproval for an additional sixty days.
17 (3) Such approval shall become void upon any subsequent
18 notice of disapproval from the Insurance Commissioner, or upon
19 any subsequent withdrawal of license or refusal of the Insurance
20 Commissioner to relicense any such company, association or
21 exchange, or upon the subsequent passage of an act which would
22 no longer make such contracts a fit subject for approval, except
23 that this provision shall not affect contracts issued prior
24 thereto.
25 (4) Upon any disapproval, the Insurance Commissioner shall
26 notify the insurer, in writing, specifying the reason for such
27 disapproval; and within thirty days from the date of mailing
28 such notice to the insurer, the insurer may make written
29 application to the Insurance Commissioner for a hearing thereon.
30 The hearing shall be scheduled within a reasonable period of
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1 time following receipt of the application. The procedure before
2 the Insurance Commissioner shall be in accordance with the
3 adjudication procedure set forth in Title 2 of the Pennsylvania
4 Consolidated Statutes (relating to administrative law and
5 procedure), and the insurer shall be entitled to the judicial
6 review as provided for therein.
7 (5) Upon satisfactory evidence of the violation of this
8 section by any such person, corporation, insurance company or
9 exchange, the Insurance Commissioner may, in his discretion,
10 pursue any one or more of the following courses of action:
11 (i) Suspend or revoke the license of such offending person,
12 corporation, insurance company or exchange.
13 (ii) Refuse, for a period not to exceed the year thereafter,
14 to issue a new license to such person, corporation, insurance
15 company or exchange.
16 (iii) Impose a fine of not more than one thousand dollars
17 ($1,000) for each and every violation of this subsection.
18 Section 354.2. Notice of Compensation.--(a) In the case of
19 a policy issued on a group basis, if compensation of any kind
20 will or may be paid to a policyholder or a sponsoring or
21 endorsing entity, the insurer shall cause to be distributed to
22 prospective insureds, in a written notice, that compensation
23 will or may be paid.
24 (b) Such notice shall be distributed:
25 (1) Whether compensation is direct or indirect; and
26 (2) Whether such compensation is paid to or retained by the
27 policyholder or sponsoring or endorsing entity, or paid to or
28 retained by a third party at the direction of the policyholder
29 or a sponsoring or endorsing entity, or any entity affiliated
30 therewith by way of ownership, contract or employment.
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1 (3) The notice required by this section shall be placed on
2 or accompany any application or enrollment form provided to
3 prospective insureds.
4 (4) For purposes of this section, a "sponsoring or endorsing
5 entity" means an organization which has arranged for the
6 offering of a program of insurance in a matter which
7 communicates that eligibility for participation in the program
8 is dependent upon affiliation with such organization or that it
9 encourages participation in the program.
10 Section 354.3. Existing Policy and Existing Certificate.--
11 The provisions of sections 354.1 and 354.2 shall not invalidate
12 or otherwise affect any group policy legally issued prior to the
13 effective date of this section or certificate in effect prior to
14 the effective date of this section. All such group policies or
15 certificates may remain in full force and effect until renewed,
16 notwithstanding the fact that they do not comply with the
17 provisions of this act.
18 Section 354.4. Newly Issued Group Policy.--Any group policy
19 issued on or after the effective date this section is enacted
20 shall comply with the provisions of this act.
21 Section 354.5. Newly Issued Certificate.--Any certificate
22 issued on or after the effective date of this section under a
23 group policy issued prior to the effective date of this section
24 or certificate issued under a group policy issued on or after
25 the effective date of this section, shall comply with the
26 provisions of this act.
27 Section 2. This act shall take effect in 90 days.
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