HOUSE AMENDED
PRIOR PRINTER'S NOS. 1, 447 PRINTER'S NO. 788
No. 1 Session of 1993
INTRODUCED BY MELLOW AND MADIGAN, JANUARY 5, 1993
AS REPORTED FROM COMMITTEE ON LABOR RELATIONS, HOUSE OF
REPRESENTATIVES, AS AMENDED, MARCH 25, 1993
AN ACT
1 Amending the act of June 2, 1915 (P.L.736, No.338), entitled, as
2 reenacted and amended, "An act defining the liability of an
3 employer to pay damages for injuries received by an employe
4 in the course of employment; establishing an elective
5 schedule of compensation; providing procedure for the
6 determination of liability and compensation thereunder; and
7 prescribing penalties," adding and amending certain
8 definitions; redesignating referees as workers' compensation
9 judges; further providing for contractors, for insurance and
10 self-insurance, for compensation and for payments for medical
11 services; providing for coordinated care organizations;
12 further providing for procedures for the payment of
13 compensation and for medical services and for procedures of
14 the department, referees and the board; adding provisions
15 relating to insurance, self-insurance pooling, self-insurance
16 guaranty fund, health and safety, the prevention of insurance
17 fraud; further providing for certain penalties; making
18 repeals; and making editorial changes.
19 The General Assembly of the Commonwealth of Pennsylvania
20 hereby enacts as follows:
21 Section 1. Section 101 of the act of June 2, 1915 (P.L.736,
22 No.338), known as The Pennsylvania Workmen's Compensation Act,
23 reenacted and amended June 21, 1939 (P.L.520, No.281) and
24 amended December 5, 1974 (P.L.782, No.263), is amended to read:
1 Section 101. That this act shall be called and cited as [The
2 Pennsylvania Workmen's] the Workers' Compensation Act, and shall
3 apply to all injuries occurring within this Commonwealth,
4 irrespective of the place where the contract of hiring was made,
5 renewed, or extended, and extraterritorially as provided by
6 section 305.2.
7 Section 2. Section 104 of the act, amended March 29, 1972
8 (P.L.159, No.61), is amended to read:
9 Section 104. The term "employe," as used in this act is
10 declared to be synonymous with servant, and includes--
11 All natural persons who perform services for another for a
12 valuable consideration, exclusive of persons whose employment is
13 casual in character and not in the regular course of the
14 business of the employer, and exclusive of persons to whom
15 articles or materials are given out to be made up, cleaned,
16 washed, altered, ornamented, finished or repaired, or adapted
17 for sale in the worker's own home, or on other premises, not
18 under the control or management of the employer. [Every] Except
19 as hereinafter provided in clause (c) of section 302 and
20 sections 305 and 321 of this act, every executive officer of a
21 corporation elected or appointed in accordance with the charter
22 and by-laws of the corporation, except elected officers of the
23 Commonwealth or any of its political subdivisions, shall be an
24 employe of the corporation [except as hereinafter provided in
25 sections 302 (c), 305 and 321]. An executive officer of a
26 corporation may, however, elect not to be an "employe" of the
27 corporation for the purposes of this act. For purposes of this
28 section, an executive officer is an individual who has the power
29 to direct and cause the direction of the management and policies
30 of the business and to make the day-to-day as well as major <--
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1 decisions in matters of policy, management and operations AND <--
2 WHO EITHER HAS AN ANTICIPATED ANNUAL WAGE EQUAL TO OR GREATER
3 THAN THE WAGE WHICH WOULD BE EARNED DURING THE SAME PERIOD BY A
4 PERSON WHO IS PAID THREE TIMES THE STATEWIDE AVERAGE WEEKLY WAGE
5 OR WHO HAS AN OWNERSHIP INTEREST IN THE CORPORATION, IN THE CASE
6 OF A SUBCHAPTER S CORPORATION AS DEFINED BY THE ACT OF MARCH 4,
7 1971 (P.L.6, NO.2), KNOWN AS THE "TAX REFORM CODE OF 1971."
8 Section 3. The act is amended by adding sections to read:
9 Section 105.3. The term "construction design professional,"
10 as used in this act, means a professional engineer or land
11 surveyor licensed by the State Registration Board for
12 Professional Engineers and Professional Land Surveyors under the
13 act of May 23, 1945 (P.L.913, No.367), known as the
14 "Professional Engineers and Professional Land Surveyors
15 Registration Law," a landscape architect who is licensed by the
16 State Board of Landscape Architects under the act of January 24,
17 1966 (1965 P.L.1527, No.535), known as the "Landscape
18 Architects' Registration Law," an architect who is licensed by
19 the Architects Licensure Board under the act of December 14,
20 1982 (P.L.1227, No.281), known as the "Architects Licensure
21 Law," or any corporation or association (including professional
22 corporations) organized or registered under the act of December
23 21, 1988 (P.L.1444, No.177), known as the "General Association
24 Act of 1988," practicing engineering, architecture, landscape
25 architecture or surveying in this Commonwealth.
26 Section 109. In addition to the definitions set forth in
27 this Article, the following words and phrases when used in this
28 act shall have the meanings given to them in this section unless
29 the context clearly indicates otherwise:
30 "Bill" means a statement or invoice for payment of services
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1 under clause (f) of section 306 of this act which identifies the
2 claimant, the date of injury, the payment codes referred to in
3 clause (f) of section 306 of this act and a description of the
4 services provided on or in standard form prescribed by the
5 Department of Labor and Industry.
6 "Burn facility" means a facility which meets the service
7 standards of the American Burn Association.
8 "Commissioner" means the Insurance Commissioner of the
9 Commonwealth.
10 "Coordinated care organization" or "CCO" means an
11 organization licensed in Pennsylvania and certified by the
12 Secretary of Labor and Industry on a THE basis of established <--
13 criteria possessing the capacity to provide medical services to
14 an injured worker.
15 "DRG" means diagnosis related groups.
16 "HCFA" means the Health Care Financing Administration.
17 "Health care provider" means any person, corporation,
18 facility or institution licensed or otherwise authorized by the
19 Commonwealth to provide health care services, including, but not
20 limited to, any physician, COORDINATED CARE ORGANIZATION, <--
21 hospital, health care facility, dentist, nurse, optometrist,
22 podiatrist, physical therapist, psychologist, chiropractor or
23 pharmacist and an officer, employe or agent of such person
24 acting in the course and scope of employment or agency related
25 to health care services.
26 "Health maintenance organization" means an entity defined in
27 and subject to the act of December 29, 1972 (P.L.1701, No.364),
28 known as the "Health Maintenance Organization Act."
29 "Hospital plan corporation" means an entity defined in and
30 subject to Chapter 61 (relating to hospital plan corporations)
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1 of Title 40 (relating to insurance) of the Pennsylvania
2 Consolidated Statutes.
3 "Insurance Company Law of 1921" means the act of May 17, 1921
4 (P.L.682, No.284), known as "The Insurance Company Law of 1921."
5 "Insurer" means an entity subject to the act of May 17, 1921
6 (P.L.682, No.284), known as "The Insurance Company Law of 1921,"
7 including the State Workmen's Insurance Fund, with which an
8 employer has insured liability under this act pursuant to
9 section 305 or a self-insured employer or fund exempted by the
10 Department of Labor and Industry pursuant to section 305 of this
11 act.
12 "Intermediary" means an organization with a contractual
13 relationship with the Health Care Financing Administration to
14 process Medicare Part A or Part B claims.
15 "Life-threatening injury" shall be as defined by the American
16 College of Surgeons' triage guidelines regarding use of trauma
17 centers for the region where the services are provided.
18 "Medical reasonableness" means considered to be useful and <--
19 medically appropriate to restore and rehabilitate a patient to
20 pre-injury state or to achieve maximal benefit by a recognized
21 school of thought, even a minority view, in the community where
22 the service was rendered and at the time the service was
23 rendered.
24 "Occupational Disease Act" means the act of June 21, 1939
25 (P.L.566, No.284), known as "The Pennsylvania Occupational
26 Disease Act."
27 "Pass-through costs" means Medicare reimbursed costs to a
28 hospital that "pass through" the prospective payment system and
29 are not included in the diagnosis related group payments. The
30 term includes medical education, capital expenditures, insurance
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1 and interest expense on fixed assets.
2 "Peer review," for the purpose of undertaking reviews and
3 reports pursuant to section 420, means review by:
4 (1) an impartial physician or other duly licensed <--
5 practitioner of the healing arts HEALTH CARE PROVIDERS selected <--
6 by the Secretary of Labor and Industry upon recommendation of
7 the deans of the medical colleges located in this Commonwealth;
8 (2) a panel of such professionals and practitioners <--
9 PROVIDERS selected by the Secretary of Labor and Industry upon <--
10 recommendation of the deans of the medical colleges located in
11 this Commonwealth or recommendation of professional associations
12 representing such professionals and practitioners PROVIDERS; or <--
13 (3) a Peer Review Organization approved by the commissioner
14 and selected by the Secretary of Labor and Industry.
15 "Professional health service corporation" means an entity
16 defined in and subject to Chapter 63 (relating to professional
17 health services plan corporations) of Title 40 (relating to
18 insurance) of the Pennsylvania Consolidated Statutes.
19 "Provider" means a health care provider.
20 "Referee" means a workers' compensation judge, as designated
21 under section 401.
22 "Secretary" means the Secretary of Labor and Industry of the
23 Commonwealth.
24 "Trauma center" means a facility accredited by the
25 Pennsylvania Trauma Systems Foundation under the act of July 3,
26 1985 (P.L.164, No.45), known as the "Emergency Medical Services
27 Act."
28 "Urgent injury" shall be as defined by the American College
29 of Surgeons' triage guidelines regarding use of trauma centers
30 for the region where the services are provided.
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1 "Usual and customary charge" means the charge most often made
2 by providers of similar training, experience and licensure for a
3 specific treatment, accommodation, product or service in the
4 geographic area where the treatment, accommodation, product or
5 service is provided.
6 "Utilization review organizations" shall be those
7 organizations consisting of an impartial physician, surgeon or
8 other duly licensed practitioner of the healing arts HEALTH CARE <--
9 PROVIDER or a panel of such professionals and practitioners <--
10 PROVIDERS as authorized by the Secretary of Labor and Industry <--
11 and published as a list in the form of a notice in the
12 Pennsylvania Bulletin, for the purpose of reviewing the medical <--
13 reasonableness and necessity of treatment BY A HEALTH CARE <--
14 PROVIDER pursuant to section 306(f.1)(6).
15 Section 4. Section 204 of the act, amended December 5, 1974
16 (P.L.782, No.263), is amended to read:
17 Section 204. (A) No agreement, composition, or release of <--
18 damages made before the date of any injury shall be valid or
19 shall bar a claim for damages resulting therefrom; and any such
20 agreement is declared to be against the public policy of this
21 Commonwealth. The receipt of benefits from any association,
22 society, or fund shall not bar the recovery of damages by action
23 at law, nor the recovery of compensation under article three
24 hereof; and any release executed in consideration of such
25 benefits shall be void[: Provided, however, That if the employe <--
26 receives unemployment compensation benefits, such amount or
27 amounts so received shall be credited as against the amount of
28 the award made under the provisions of [section 108].] sections <--
29 108 and 306, except for benefits payable under section 306(c).
30 (B) (1) IF AN EMPLOYE IS RECEIVING WEEKLY COMPENSATION <--
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1 UNDER THIS ACT AND IS ALSO ELIGIBLE FOR, AND COLLECTING,
2 BENEFITS UNDER THE ACT OF DECEMBER 5, 1936 (2ND SP.SESS., 1937
3 P.L.2897, NO.1), KNOWN AS THE "UNEMPLOYMENT COMPENSATION LAW,"
4 THE WEEKLY COMPENSATION AMOUNT SHALL BE CREDITED AGAINST THE
5 AMOUNT OF WEEKLY BENEFITS WHICH THE EMPLOYE WOULD OTHERWISE
6 RECEIVE UNDER THE "UNEMPLOYMENT COMPENSATION LAW." THIS
7 SUBSECTION SHALL NOT APPLY TO COMPENSATION RECEIVED UNDER
8 SUBSECTION (C) OF SECTION 306 OR SECTION 307.
9 (2) FOR THE EXCLUSIVE PURPOSE OF DETERMINING ELIGIBILITY FOR
10 COMPENSATION UNDER THE "UNEMPLOYMENT COMPENSATION LAW," WEEKLY
11 COMPENSATION PAID TO AN EMPLOYE UNDER THIS ACT SHALL BE DEEMED
12 TO BE A CREDIT WEEK AS THAT TERM IS DEFINED IN THE "UNEMPLOYMENT
13 COMPENSATION LAW."
14 Section 5. Section 301(a) and (c)(1) of the act, amended <--
15 October 17, 1972 (P.L.930, No.223) and (C)(2) OF THE ACT, <--
16 AMENDED December 5, 1974 (P.L.782, No.263), are amended to read:
17 Section 301. (a) Every employer shall be liable for
18 compensation for personal injury to, or for the death of each
19 employe, by an injury in the course of his employment, and such
20 compensation shall be paid in all cases by the employer, without
21 regard to negligence, according to the schedule contained in
22 sections three hundred and six and three hundred and seven of
23 this article: Provided, That no compensation shall be paid when
24 the injury or death is intentionally self inflicted, or is
25 caused by the employe's violation of law, including, but not
26 limited to, the illegal use of drugs, but the burden of proof of
27 such fact shall be upon the employer, and no compensation shall
28 be paid if, during hostile attacks on the United States, injury
29 or death of employes results solely from military activities of
30 the armed forces of the United States or from military
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1 activities or enemy sabotage of a foreign power. In cases where
2 the injury or death is caused by intoxication, no compensation
3 shall be paid if the injury or death would not have occurred but
4 for the employe's intoxication, but the burden of proof of such
5 fact shall be upon the employer.
6 * * *
7 (c) (1) The terms "injury" and "personal injury," as used <--
8 in this act, shall be construed to mean an injury to an employe,
9 regardless of his previous physical condition, arising in the
10 course of his employment and related thereto, and such disease
11 or infection as naturally results from the injury or is
12 aggravated, reactivated or accelerated by the injury; and
13 wherever death is mentioned as a cause for compensation under
14 this act, it shall mean only death resulting from such injury
15 and its resultant effects, and occurring within three hundred
16 weeks after the injury. The term "injury arising in the course
17 of his employment," as used in this article, shall not include
18 an injury caused by an act of a third person intended to injure
19 the employe because of reasons personal to him, and not directed
20 against him as an employe or because of his employment; nor
21 shall it include injuries sustained while the employe is
22 operating a motor vehicle provided by the employer if the
23 employe is not otherwise in the course of employment at the time
24 of injury; but shall include all other injuries sustained while
25 the employe is actually engaged in the furtherance of the
26 business or affairs of the employer, whether upon the employer's
27 premises or elsewhere, and shall include all injuries caused by
28 the condition of the premises or by the operation of the
29 employer's business or affairs thereon, sustained by the
30 employe, who, though not so engaged, is injured upon the
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1 premises occupied by or under the control of the employer, or
2 upon which the employer's business or affairs are being carried
3 on, the employe's presence thereon being required by the nature
4 of his employment.
5 (C) * * * <--
6 (2) THE TERMS "INJURY," "PERSONAL INJURY," AND "INJURY
7 ARISING IN THE COURSE OF HIS EMPLOYMENT," AS USED IN THIS ACT,
8 SHALL INCLUDE, UNLESS THE CONTEXT CLEARLY REQUIRES OTHERWISE,
9 OCCUPATIONAL DISEASE AS DEFINED IN SECTION 108 OF THIS ACT:
10 PROVIDED, THAT WHENEVER OCCUPATIONAL DISEASE IS THE BASIS FOR
11 COMPENSATION, FOR DISABILITY OR DEATH UNDER THIS ACT, IT SHALL
12 APPLY ONLY TO DISABILITY OR DEATH RESULTING FROM SUCH DISEASE
13 AND OCCURRING WITHIN [THREE HUNDRED] FIVE HUNDRED WEEKS AFTER
14 THE LAST DATE OF EMPLOYMENT IN AN OCCUPATION OR INDUSTRY TO
15 WHICH HE WAS EXPOSED TO HAZARDS OF SUCH DISEASE: AND PROVIDED
16 FURTHER, THAT IF THE EMPLOYE'S COMPENSABLE DISABILITY HAS
17 OCCURRED WITHIN SUCH PERIOD, HIS SUBSEQUENT DEATH AS A RESULT OF
18 THE DISEASE SHALL LIKEWISE BE COMPENSABLE. THE PROVISIONS OF
19 THIS PARAGRAPH (2) SHALL APPLY ONLY WITH RESPECT TO THE
20 DISABILITY OR DEATH OF AN EMPLOYE WHICH RESULTS IN WHOLE OR IN
21 PART FROM THE EMPLOYE'S EXPOSURE TO THE HAZARD OF OCCUPATIONAL
22 DISEASE AFTER JUNE 30, 1973 IN EMPLOYMENT COVERED BY THE
23 PENNSYLVANIA WORKMEN'S COMPENSATION ACT. THE EMPLOYER LIABLE FOR
24 COMPENSATION PROVIDED BY SECTION 305.1 OR SECTION 108,
25 [SUBSECTIONS] SUBSECTION (K), (L), (M), (O), (P) OR (Q), SHALL
26 BE THE EMPLOYER IN WHOSE EMPLOYMENT THE EMPLOYE WAS LAST EXPOSED
27 FOR A PERIOD OF NOT LESS THAN ONE YEAR TO THE HAZARD OF THE
28 OCCUPATIONAL DISEASE CLAIMED. IN THE EVENT THE EMPLOYE DID NOT
29 WORK IN AN EXPOSURE AT LEAST ONE YEAR FOR ANY EMPLOYER DURING
30 THE [THREE HUNDRED] FIVE HUNDRED WEEK PERIOD PRIOR TO DISABILITY
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1 OR DEATH, THE EMPLOYER LIABLE FOR THE COMPENSATION SHALL BE THAT
2 EMPLOYER GIVING THE LONGEST PERIOD OF EMPLOYMENT IN WHICH THE
3 EMPLOYE WAS EXPOSED TO THE HAZARDS OF THE DISEASE CLAIMED.
4 * * *
5 Section 6. Section 302 of the act, amended December 5, 1974
6 (P.L.782, No.263), is amended to read:
7 Section 302. (a) A contractor who subcontracts all or any
8 part of a contract and his insurer shall be liable for the
9 payment of compensation to the employes of the subcontractor
10 unless the subcontractor primarily liable for the payment of
11 such compensation has secured its payment as provided for in
12 this act. Any contractor or his insurer who shall become liable
13 hereunder for such compensation may recover the amount thereof
14 paid and any necessary expenses from the subcontractor primarily
15 liable therefor.
16 For purposes of this subsection, a person who contracts with
17 another (1) to have work performed consisting of (i) the
18 removal, excavation or drilling of soil, rock or minerals, or
19 (ii) the cutting or removal of timber from lands, or (2) to have
20 work performed of a kind which is a regular or recurrent part of
21 the business, occupation, profession or trade of such person
22 shall be deemed a contractor, and such other person a
23 subcontractor. This subsection shall not apply, however, to an
24 owner or lessee of land principally used for agriculture who is
25 not a covered employer under this act and who contracts for the
26 removal of timber from such land.
27 (b) Any employer who permits the entry upon premises
28 occupied by him or under his control of a laborer or an
29 assistant hired by an employe or contractor, for the performance
30 upon such premises of a part of such employer's regular business
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1 entrusted to that employe or contractor, shall be liable for the
2 payment of compensation to such laborer or assistant unless such
3 hiring employe or contractor, if primarily liable for the
4 payment of such compensation, has secured the payment thereof as
5 provided for in this act. Any employer or his insurer who shall
6 become liable hereunder for such compensation may recover the
7 amount thereof paid and any necessary expenses from another
8 person if the latter is primarily liable therefor.
9 For purposes of this subsection (b), the term "contractor"
10 shall have the meaning ascribed in section 105 of this act.
11 (c) Any employer employing persons in agricultural labor
12 shall be required to provide workmen's compensation coverage for
13 such employes according to the provisions of this act, if such
14 employer is otherwise covered by the provisions of this act or
15 if during the calendar year such employer pays wages to one
16 employe for agricultural labor totaling one hundred fifty
17 dollars ($150) or more or furnishes employment to one employe in
18 agricultural labor on twenty or more days in any of which events
19 the employer shall be required to provide coverage for all
20 employes.
21 (d) A contractor shall not subcontract all or any part of a
22 contract unless the subcontractor has presented proof of
23 insurance under this act.
24 (e) (1) Prior to issuing a building permit to a contractor,
25 a municipality shall require the contractor to present proof of
26 workers' compensation insurance for the duration of the work or <--
27 an affidavit that the contractor is the sole proprietor, <--
28 principal shareholder of a corporation or a partner in a
29 partnership which does not employ other individuals to perform <--
30 the work pursuant to the building permit. AND IS NOT REQUIRED TO <--
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1 CARRY WORKERS' COMPENSATION INSURANCE.
2 (2) Every building permit issued by a municipality to a
3 contractor shall clearly set forth the name and workers'
4 compensation policy and the contractor's Federal or State
5 Employer Identification Number. This information shall be in
6 addition to any information required by municipal ordinance. If
7 the building permit is issued to a sole proprietor, principal <--
8 shareholder of a corporation or a partnership which does not
9 employ other individuals to perform the work pursuant to the
10 building permit, and is not otherwise AN APPLICANT WHICH AFFIRMS <--
11 IT IS NOT obligated to maintain workers' compensation insurance
12 under this act, the permit shall clearly set forth the
13 contractor's Federal or State Employer Identification Number and
14 state that the sole proprietor, principal shareholder or partner <--
15 is not required to carry workers' compensation insurance and
16 that the sole proprietor, principal shareholder or partner THE <--
17 SUBSTANCE OF THE AFFIRMATION AND THAT THE APPLICANT is not
18 permitted to employ any individual to perform work pursuant to
19 the building permit.
20 (3) Every municipality issuing a building permit shall be
21 named as a workers' compensation policy certificate holder of a
22 contractor-issued building permit. This certificate shall be
23 filed with the municipality's copy of the building permit. AN <--
24 INSURER ISSUING A POLICY WHICH NAMES A MUNICIPALITY AS A
25 WORKERS' COMPENSATION POLICY CERTIFICATE HOLDER PURSUANT TO THIS
26 SECTION SHALL BE REQUIRED TO NOTIFY THAT MUNICIPALITY OF THE
27 EXPIRATION OR CANCELLATION OF ANY SUCH POLICY OF INSURANCE OR
28 POLICY CERTIFICATE WITHIN THREE WORKING DAYS OF SUCH
29 CANCELLATION OR EXPIRATION.
30 (4) A municipality shall issue a stop-work order to a
19930S0001B0788 - 13 -
1 contractor who is performing work pursuant to a building permit,
2 in the event his UPON RECEIVING ACTUAL NOTICE THAT THE <--
3 CONTRACTOR'S workers' compensation insurance or STATE-APPROVED <--
4 self-insured status is HAS BEEN cancelled. If the municipality <--
5 determines that a sole proprietor, partner or shareholder who is
6 performing work ALSO, IF THE MUNICIPALITY RECEIVES ACTUAL NOTICE <--
7 THAT A PERMITTEE, HAVING FILED AN AFFIDAVIT OF EXEMPTION FROM
8 WORKERS' COMPENSATION INSURANCE, HAS HIRED PERSONS TO PERFORM
9 WORK pursuant to a building permit AND does not maintain <--
10 required workers' compensation insurance, the municipality may <--
11 SHALL issue a stop-work order. This order shall remain in effect <--
12 until proper workers' compensation coverage is obtained for all
13 work performed pursuant to the building permit.
14 (f) (1) Where a contractor is performing work for a public <--
15 body or political subdivision, all contractors and
16 subcontractors shall provide proof of workers' compensation
17 insurance to the public body or political subdivision effective
18 for the duration of the work.
19 (2) THE PUBLIC BODY OR POLITICAL SUBDIVISION SHALL ISSUE A <--
20 STOP WORK ORDER TO ANY CONTRACTOR WHO IS PERFORMING WORK FOR
21 THAT PUBLIC BODY OR POLITICAL SUBDIVISION UPON RECEIVING NOTICE
22 THAT ANY PUBLIC CONTRACTOR'S WORKERS' COMPENSATION INSURANCE, OR
23 STATE-APPROVED SELF-INSURANCE STATUS, HAS EXPIRED OR HAS BEEN
24 CANCELLED. IF THE PUBLIC BODY OR POLITICAL SUBDIVISION RECEIVES
25 ACTUAL NOTICE THAT A CONTRACTOR, HAVING FILED AN AFFIDAVIT OF
26 EXEMPTION FROM WORKERS' COMPENSATION INSURANCE, HAS HIRED
27 PERSONS TO PERFORM WORK FOR A PUBLIC BODY OR POLITICAL
28 SUBDIVISION AND DOES NOT MAINTAIN THE REQUIRED WORKERS'
29 COMPENSATION INSURANCE OR SELF-INSURANCE, THE PUBLIC BODY OR
30 POLITICAL SUBDIVISION SHALL ISSUE A STOP WORK ORDER, WHICH ORDER
19930S0001B0788 - 14 -
1 SHALL REMAIN IN EFFECT UNTIL PROPER WORKERS' COMPENSATION
2 COVERAGE IS OBTAINED FOR ALL WORK PERFORMED PURSUANT TO THE
3 CONTRACT OF WORK FOR THE PUBLIC BODY OR POLITICAL SUBDIVISION.
4 (g) Should such policy of workers' compensation insurance be
5 cancelled or expire during the duration of the work or should
6 the workers' compensation self-insurance status change during
7 the said period, the contractor shall immediately notify, in
8 writing, the municipality, public body or political subdivision
9 of such cancellation, expiration or change in status.
10 (h) Nothing in this act shall be the basis of any liability
11 on part of the municipality.
12 (i) For purposes of clauses SUBSECTIONS (d), (e) and (f) of <--
13 this section, "proof of insurance" shall include a certificate
14 of insurance or self-insurance, demonstrating current coverage
15 and compliance with the requirements of this act, the
16 Occupational Disease Act and the Longshore and Harbor Workers'
17 Compensation Act (44 Stat. 1424, 33 U.S.C. § 901 et seq.), its
18 amendments and supplements, where applicable.
19 (j) For purposes of clauses SUBSECTIONS (d), (e) and (f), <--
20 "proof of insurance" shall not be required when the employer has
21 been exempted pursuant to section 304.2 of this act.
22 Section 7. Section 305 of the act, amended December 5, 1974
23 (P.L.782, No.263) and repealed in part April 28, 1978 (P.L.202,
24 No.53), is amended to read:
25 Section 305. (a) (1) Every employer liable under this act
26 to pay compensation shall insure the payment of compensation in
27 the State Workmen's Insurance Fund, or in any insurance company,
28 or mutual association or company, authorized to insure such
29 liability in this Commonwealth, unless such employer shall be
30 exempted by the department from such insurance. Such insurer
19930S0001B0788 - 15 -
1 shall assume the employer's liability hereunder and shall be
2 entitled to all of the employer's immunities and protection
3 hereunder except, that whenever any employer shall have
4 purchased insurance to provide benefits under this act to
5 persons engaged in domestic service, neither the employer nor
6 the insurer may invoke the provisions of section 321 as a
7 defense. An employer desiring to be exempt from insuring the
8 whole or any part of his liability for compensation shall make
9 application to the department, showing his financial ability to
10 pay such compensation, whereupon the department, if satisfied of
11 the applicant's financial ability, shall, upon the payment of a
12 fee of [one hundred dollars ($100.00)] five hundred dollars
13 ($500), issue to the applicant a permit authorizing such
14 exemption.
15 (2) In securing the payment of benefits, the department
16 shall require an employer wishing to self-insure its liability
17 to establish sufficient security by posting a bond or other
18 security, including letters of credit drawn on commercial banks
19 with a Thompson Bank Credit Service rating of C THOMSON BANK <--
20 WATCH RATING OF B or better or a CD rating of BB/A2 BBB/A2 or <--
21 better by Standard and Poor's. This paragraph shall not apply to
22 municipalities.
23 (3) The department shall establish a period of twelve (12)
24 calendar months, to begin and end at such times as the
25 department shall prescribe, which shall be known as the annual
26 exemption period. Unless previously revoked, all permits issued
27 under this section shall expire and terminate on the last day of
28 the annual exemption period for which they were issued. Permits
29 issued under this act shall be renewed upon the filing of an
30 application, and the payment of a renewal fee of one hundred
19930S0001B0788 - 16 -
1 dollars ($100.00). The department may, from time to time,
2 require further statements of the financial ability of such
3 employer, and, if at any time such employer appear no longer
4 able to pay compensation, shall revoke its permit granting
5 exemption, in which case the employer shall immediately
6 subscribe to the State Workmen's Insurance Fund, or insure his
7 liability in any insurance company or mutual association or
8 company, as aforesaid.
9 (b) Any employer who fails to comply with the provisions of
10 this section for every such failure, shall, upon [summary
11 conviction before any official of competent jurisdiction, be
12 sentenced to pay a fine of not less than five hundred dollars
13 ($500) nor more than two thousand dollars ($2,000), and costs of
14 prosecution, or imprisonment for a period of not more than one
15 (1) year, or both.] conviction in the court of common pleas, be
16 guilty of a misdemeanor of the third degree. If the failure to
17 comply with this section is found by the court to be
18 intentional, the employer shall be guilty of a felony of the
19 third degree. Every day's violation shall constitute a separate
20 offense. A judge of the court of common pleas may, in addition
21 to imposing fines and imprisonment, include restitution in his
22 order: Provided, That there is an injured employe who has
23 obtained an award of compensation. The amount of restitution
24 shall be limited to that specified in the award of compensation.
25 It shall be the duty of the department to enforce the provisions
26 of this section; and it shall investigate all violations that
27 are brought to its notice and shall institute prosecutions for
28 violations thereof. All fines recovered under the provisions of
29 this section shall be paid to the department, and by it paid
30 into the State Treasury.
19930S0001B0788 - 17 -
1 (c) In any proceeding against an employer under this
2 section, a certificate of non-insurance issued by the official
3 Workmen's Compensation Rating and Inspection Bureau and a
4 certificate of the department showing that the defendant has not
5 been exempted from obtaining insurance under this section, shall
6 be prima facie evidence of the facts therein stated.
7 (d) When any employer fails to secure the payment of
8 compensation under this act as provided in sections 305 and
9 305.2, the injured employe or his dependents may proceed either
10 under this act or in a suit for damages at law as provided by
11 article II.
12 (e) Every employer shall post a notice at its primary place
13 of business and at its sites of employment in a prominent and
14 easily accessible place, including, without limitation, areas
15 used for the treatment of injured employes or for the
16 administration of first aid, containing:
17 (1) Either the name of the employer's carrier and the
18 address and telephone number of such carrier or insurer or, if
19 the employer is self-insured, the name, address and telephone
20 number of the person to whom claims or requests for information
21 are to be addressed.
22 (2) The following statement: "Remember, it is important to
23 tell your employer about your injury."
24 The notice shall be posted in prominent and easily accessible
25 places at the site of employment, including such places as are
26 used for treatment and first aid of injured employes. Such a
27 listing shall contain the information as specified in this
28 section, typed or printed on eight and one-half inch by eleven
29 inch or eight and one-half inch by thirteen inch paper in
30 standard size type or larger.
19930S0001B0788 - 18 -
1 Section 8. Section 306(a) and (f) of the act, amended
2 December 5, 1974 (P.L.782, No.263) and July 1, 1978 (P.L.692,
3 No.119), are amended and the section is amended by adding
4 clauses to read:
5 Section 306. The following schedule of compensation is
6 hereby established:
7 (a) (1) For total disability, sixty-six and two-thirds per <--
8 centum of the wages of the injured employe as defined in section
9 three hundred and nine beginning after the seventh day of total
10 disability, and payable for the duration of total disability,
11 but the compensation shall not be more than the maximum
12 compensation payable [nor less than fifty per centum of the
13 Statewide average weekly wage. If at the time of injury, the
14 employe receives wages equal to or less than fifty per centum of
15 the Statewide average weekly wage, then he shall receive ninety
16 per centum of his average weekly wage as compensation, but in no
17 event less than thirty-three and one-third per centum of the
18 maximum weekly compensation payable] as defined in section
19 105.2. Nothing in this clause shall require payment of
20 compensation after disability shall cease. Nothing in this act <--
21 shall require payment of compensation for any period during
22 which the employe is incarcerated after a conviction. If the
23 benefit so calculated is less than fifty per centum of the
24 Statewide average weekly wage, then the benefit payable shall be
25 the lower of fifty per centum of the Statewide average weekly
26 wage or eighty-five NINETY per centum of the worker's average <--
27 weekly wage: PROVIDED, THAT, COMMENCING WITH THE SEVENTH WEEK OF <--
28 TOTAL DISABILITY, THE BENEFIT PAYABLE SHALL IN NO EVENT BE LESS
29 THAN THIRTY-THREE AND ONE-THIRD PER CENTUM OF THE MAXIMUM WEEKLY
30 COMPENSATION PAYABLE.
19930S0001B0788 - 19 -
1 (2) NOTHING IN THIS ACT SHALL REQUIRE PAYMENT OF
2 COMPENSATION FOR ANY PERIOD DURING WHICH THE EMPLOYE IS
3 INCARCERATED AFTER A CONVICTION.
4 * * *
5 [(f) (1) The employer shall provide payment for reasonable
6 surgical and medical services, services rendered by duly
7 licensed practitioners of the healing arts, medicines, and
8 supplies, as and when needed: Provided, That if a list of at
9 least five designated physicians or other duly licensed
10 practitioners of the healing arts or a combination thereof is
11 provided by the employer, the employe shall be required to visit
12 one of the physicians or other practitioners so designated and
13 shall continue to visit the same or another physician or
14 practitioner for a period of fourteen days from the date of the
15 first visit. Subsequent treatment may be provided by any
16 physician or any other duly licensed practitioner of the healing
17 arts or a combination thereof, of the employes own choice, and
18 such treatment shall be paid for by the employer. Any employe
19 who next following the termination of the fourteen-day period is
20 provided treatment from a physician or other duly licensed
21 practitioner of the healing arts who is not one of the
22 physicians or practitioners designated by the employer, shall
23 notify the employer within five days of the first visit to said
24 physician or practitioner. However, if the employe fails to so
25 notify the employer, the employe shall suffer no loss of rights
26 or benefits to which he is otherwise entitled under the act.
27 (2) If and only if the employer has designated at least five
28 physicians or other duly licensed practitioners of the healing
29 arts or a combination thereof as permitted by the preceding
30 paragraph, the following reporting provisions shall apply.
19930S0001B0788 - 20 -
1 Nothing in the following paragraphs shall eliminate rights of
2 the employer to obtain all records and data as permitted under
3 any other sections of this act.
4 (i) The physician or other duly licensed practitioner of the
5 healing arts shall be required to file periodic reports with the
6 employer on a form prescribed by the department which shall
7 include, where pertinent, history, diagnosis, treatment,
8 prognosis and physical findings. The report shall be filed
9 within twenty-one days of commencing treatment and at least once
10 a month thereafter, as long as treatment continues. The employer
11 shall not be liable to pay for such treatment until a report has
12 been filed.
13 (ii) The employer shall have the right to petition the
14 department for review of the necessity or frequency of treatment
15 or reasonableness of fees for services provided by a physician
16 or other duly licensed practitioner of the healing arts. Such a
17 petition shall in no event act as a supersedeas, and during the
18 pendency of any such petition the employer shall pay all medical
19 bills if the physician or other practitioner of the healing arts
20 files a report or reports as required by subparagraph (i) of
21 paragraph (2) of this subsection.
22 (3) After an employe has elected to be treated by a
23 physician or other duly licensed practitioner of the healing
24 arts who is not one of the physicians or practitioners
25 designated by the employer, he may thereafter elect to be
26 treated by another physician or other duly licensed practitioner
27 of the healing arts upon notice to his employer: Provided,
28 however, That no such notice shall be required in emergencies,
29 or in cases of referrals by one physician or practitioner to
30 another physician or practitioner or if the new physician or
19930S0001B0788 - 21 -
1 practitioner makes a timely report to the employer within
2 twenty-one days after commencing treatment.
3 (4) In addition to the above service, the employer shall
4 provide payment for medicines and supplies, hospital treatment,
5 services and supplies and orthopedic appliances, and prostheses.
6 The cost for such hospital treatment, service and supplies shall
7 not in any case exceed the prevailing charge in the hospital for
8 like services to other individuals. If the employe shall refuse
9 reasonable services of duly licensed practitioners of the
10 healing arts, surgical, medical and hospital services,
11 treatment, medicines and supplies, he shall forfeit all rights
12 to compensation for any injury or any increase in his incapacity
13 shown to have resulted from such refusal. Whenever an employe
14 shall have suffered the loss of a limb, part of a limb, or an
15 eye, the employer shall also provide payment for an artificial
16 limb or eye or other prostheses of a type and kind recommended
17 by the doctor attending such employe in connection with such
18 injury and any replacements for an artificial limb or eye which
19 the employe may require at any time thereafter, together with
20 such continued medical care as may be prescribed by the doctor
21 attending such employe in connection with such injury as well as
22 such training as may be required in the proper use of such
23 prostheses. The provisions of this section shall apply in
24 injuries whether or not loss of earning power occurs. If
25 hospital confinement is required, the employe shall be entitled
26 to semi-private accommodations but if no such facilities are
27 available, regardless of the patient's condition, the employer,
28 not the patient, shall be liable for the additional costs for
29 the facilities in a private room.
30 (5) The payment by an insurer for any medical, surgical or
19930S0001B0788 - 22 -
1 hospital services or supplies after any statute of limitations
2 provided for in this act shall have expired shall not act to
3 reopen or review the compensation rights for purposes of such
4 limitations.]
5 (f.1) (1) (i) THE EMPLOYER SHALL PROVIDE PAYMENT IN <--
6 ACCORDANCE WITH THIS SECTION FOR REASONABLE SURGICAL AND MEDICAL
7 SERVICES, SERVICES RENDERED BY PHYSICIANS OR OTHER HEALTH CARE
8 PROVIDERS, MEDICINES AND SUPPLIES, AS AND WHEN NEEDED. Provided
9 an employer establishes a list of at least five designated
10 physicians, one or more NO MORE THAN TWO of whom may be a <--
11 coordinated care organization, or other health care provider,
12 the employe shall be required to visit one of the physicians or
13 other health care provider so designated and shall continue to
14 visit the same or another designated physician or health care
15 provider for a period of thirty FOURTEEN days from the date of <--
16 the first visit or for a period of forty-five days if the
17 employe visits a coordinated care organization: Provided,
18 however, That the employer shall not include on the list a
19 physician or other health care provider who is employed, owned <--
20 or controlled by the employer or the employer's insurer unless
21 employment, ownership or control is disclosed on the list: And
22 provided further, That the injured employe shall not be required
23 to visit a physician or health care provider employed, owned or
24 controlled by the employer or the employer's insurer: And
25 provided further, That the employer shall not include on the
26 list a coordinated care organization that is owned or
27 controlled, directly or indirectly, in whole or in part, by the
28 employer or the employer's insurer unless ownership or control
29 of the coordinated care organization is disclosed on said list,
30 A MEMBER OF A COORDINATED CARE ORGANIZATION ON THE LIST OR WHO <--
19930S0001B0788 - 23 -
1 IS AN EMPLOYE OF THE EMPLOYER OR THE EMPLOYER'S INSURER, OR A
2 COORDINATED CARE ORGANIZATION IN WHICH THE EMPLOYER OR THE
3 EMPLOYER'S INSURER HAS AN OWNERSHIP INTEREST and the injured
4 employe shall not be required to visit the same. Should the
5 employe not comply with the foregoing, the employer will be
6 relieved from liability for the payment for the services
7 rendered during such applicable period. It shall be the duty of
8 the employer to provide a clearly written notification of the
9 employe's rights and duties under this section to the employe.
10 The employer shall further ensure that the employe has been
11 informed and that he understands these rights and duties. This
12 duty shall be evidenced only by the employe's written
13 acknowledgment of having been informed and understanding HAVING <--
14 UNDERSTOOD his rights and duties. Any failure of the employer to
15 provide and evidence such notification shall relieve the employe
16 from any notification duty owed, notwithstanding any provision
17 of this act to the contrary, and the employer shall remain
18 liable for all rendered medical treatment. Subsequent treatment
19 may be provided by any physician or health care provider of the <--
20 employe's own choice, AND THIS TREATMENT SHALL BE PAID FOR BY <--
21 THE EMPLOYER. Any employe who, next following termination of the
22 applicable period, is provided treatment from a nondesignated
23 physician HEALTH CARE PROVIDER shall notify the employer within <--
24 five days of the first visit to said physician or health care <--
25 provider. Failure to so notify the employer will NOT relieve the <--
26 employer from liability for the payment for the services
27 rendered prior to appropriate notice UNLESS SUCH SERVICES ARE <--
28 DETERMINED PURSUANT TO PARAGRAPH (6) TO HAVE BEEN UNREASONABLE
29 OR UNNECESSARY.
30 (ii) In addition to the above service, the employer shall
19930S0001B0788 - 24 -
1 provide payment for medicines and supplies, hospital treatment,
2 services and supplies and orthopedic appliances, and prostheses
3 in accordance with this section. Whenever an employe shall have
4 suffered the loss of a limb, part of a limb, or an eye, the
5 employer shall also provide for an artificial limb or eye or
6 other prostheses of a type and kind recommended by the doctor
7 attending such employe in connection with such injury and any
8 replacements for an artificial limb or eye which the employe may
9 require at any time thereafter, together with such continued
10 medical care as may be prescribed by the doctor attending such
11 employe in connection with such injury as well as such training
12 as may be required in the proper use of such prostheses. The
13 provisions of this section shall apply to injuries whether or
14 not loss of earning power occurs. If hospital confinement is
15 required, the employe shall be entitled to semi-private
16 accommodations but if no such facilities are available,
17 regardless of the patient's condition, the employer, not the
18 patient, shall be liable for the additional costs for the
19 facilities in a private room.
20 (iii) Nothing in this section shall prohibit an insurer or
21 an employer from contracting with any individual, partnership,
22 association or corporation to provide case management and
23 coordination of services with regard to injured employes.
24 (2) Any provider who treats an injured employe shall be
25 required to file periodic reports with the employer on a form
26 prescribed by the department which shall include, where
27 pertinent, history, diagnosis, treatment, prognosis and physical
28 findings. The report shall be filed within ten days of
29 commencing treatment and at least once a month thereafter, as
30 long as treatment continues. The employer shall not be liable to
19930S0001B0788 - 25 -
1 pay for such treatment until a report has been filed.
2 (3) (i) For purposes of this clause, a provider shall not
3 require, request or accept payment for the treatment,
4 accommodations, products or services in excess of one hundred
5 twenty per centum of the prevailing charge at the seventy-fifth
6 percentile; one hundred twenty per centum of the applicable fee
7 schedule, the recommended fee or the inflation index charge; one
8 hundred twenty per centum of the DRG payment, plus pass-through
9 costs and applicable cost or day outliers; or one hundred twenty
10 per centum of any other Medicare reimbursement mechanism, as
11 determined by the Medicare carrier or intermediary, whichever
12 pertains to the specialty service involved, determined to be
13 applicable in this Commonwealth under the Medicare program for
14 comparable services rendered as of the effective date of this
15 act PARAGRAPH, or the provider's usual and customary charge, <--
16 whichever is less: Provided, however, That payment for
17 treatment, accommodations, products or services which are
18 primary care services, as defined by the Health Care Financing
19 Administration under the Health Care Financing Administration
20 Common Procedure Coding System, shall not be in excess of one
21 hundred seventeen per centum of the applicable Medicare fee
22 schedule, or the provider's usual and customary charge,
23 whichever is less. Future changes or additions to Medicare
24 allowances are not applicable under this section. If the
25 commissioner determines that an allowance for a particular
26 provider group or service under the Medicare program is not
27 reasonable, it may adopt, by regulation, a new percentage <--
28 allowance. If the prevailing charge, fee schedule, recommended
29 fee, inflation index charge, DRG payment or any other
30 reimbursement has not been calculated under the Medicare program
19930S0001B0788 - 26 -
1 for a particular treatment, accommodation, product or service,
2 the amount of the payment may not exceed eighty per centum of
3 the charge most often made by providers of similar training,
4 experience and licensure for a specific treatment,
5 accommodation, product or service in the geographic area where
6 the treatment, accommodation, product or service is provided.
7 (ii) The maximum allowance for a health care service covered
8 by subparagraph (i) of this paragraph shall be updated as of the
9 first day of January of each year. The update, which shall be
10 applied to all services performed after January 1 of each year,
11 shall be equal to the percentage change in the Statewide average
12 weekly wage. Such updates shall be cumulative.
13 (iii) The secretary shall retain the services of an
14 independent consulting firm to perform an annual accessibility
15 study of medical HEALTH care provided under this act. The study <--
16 will SHALL review and provide information as to whether there is <--
17 adequate access to quality health care and products for injured
18 workers. If the secretary determines based on this study that as
19 a result of the medical care fee schedule there is not
20 sufficient access to quality health care or products for persons
21 suffering injuries covered by this act, the secretary may
22 recommend to the commissioner the adoption of regulations
23 providing for a new allowance. to be applied against the <--
24 percentage limitation in this subsection.
25 (iv) An allowance shall be reviewed for reasonableness where <--
26 WHENEVER the commissioner determines that the use of the <--
27 allowance would result in payments more than ten per centum
28 lower than the average level of reimbursement the provider would
29 receive from coordinated care insurers, including those entities
30 subject to the act of December 29, 1972 (P.L.1701, No.364),
19930S0001B0788 - 27 -
1 known as the "Health Maintenance Organization Act," and those
2 entities known as preferred provider organizations which are
3 subject to section 630 of the Insurance Company Law of 1921 for
4 like treatments, accommodations, products or services. In making
5 this determination, the commissioner shall consider the extent
6 to which allowances applicable to other providers under this
7 section deviate from the reimbursement such providers would
8 receive from coordinated care insurers. Any information received
9 as a result of this subparagraph shall be confidential.
10 (v) The reimbursement for prescription drugs and
11 professional pharmaceutical services shall be limited to one
12 hundred ten per centum of the average wholesale price of the
13 product: PROVIDED, THAT A SEPARATE CHARGE MAY BE USED IF A <--
14 PHARMACY PROVIDES DRUG USE EVALUATION OR UTILIZATION REVIEW.
15 (vi) The applicable Medicare fee schedule shall include fees
16 associated with all permissible procedure codes. If the Medicare
17 fee schedule also includes a larger grouping of procedure codes
18 and corresponding charges than are specifically reimbursed by
19 Medicare, a provider may use these codes, and corresponding
20 charges shall be paid by insurers or employers. If a Medicare
21 code exists for application to a specific provider specialty,
22 that code shall be used.
23 (vii) A provider shall not fragment or unbundle charges
24 imposed for specific care except as consistent with Medicare.
25 Changes to a provider's codes by an insurer shall be made only
26 as consistent with Medicare and when the insurer has sufficient
27 information to make the changes and following consultation with
28 the provider.
29 (4) Nothing in this act shall prohibit the provider, self- <--
30 insured employer, employer or insurer from contracting with a
19930S0001B0788 - 28 -
1 coordinated care organization for reimbursement levels different
2 from those identified above.
3 (5) The employer or insurer shall make payment, and
4 providers shall submit bills and records, in accordance with the
5 provisions of this section. All payments to providers for
6 treatment provided pursuant to this act shall be made within
7 thirty days of receipt of such bills and records, unless the <--
8 employer or insurer disputes the reasonableness or necessity of
9 treatment provided. A provider who has submitted the reports and
10 bills required by this section and who disputes the amount or
11 timeliness of the payment from the employer or insurer, except <--
12 in those situations where the reasonableness or necessity of
13 treatment is disputed, shall file an application for fee review
14 with the department. Within thirty days of the filing of such an
15 application, the department shall render an administrative
16 decision.
17 (6) All EXCEPT IN THOSE CASES IN WHICH A REFEREE ASKS FOR AN <--
18 OPINION FROM PEER REVIEW UNDER SECTION 420 OF THIS ACT, disputes
19 as to reasonableness or necessity of medical treatment TREATMENT <--
20 BY A HEALTH CARE PROVIDER shall be resolved in accordance with
21 the following provisions:
22 (i) The reasonableness or necessity of all medical treatment <--
23 provided BY A HEALTH CARE PROVIDER under this act may be subject <--
24 to prospective, concurrent or retrospective utilization review
25 at the request of an employer or insurer: PROVIDED, THAT THE <--
26 REQUEST SHALL IN NO EVENT ACT AS A SUPERSEDEAS AND THAT DURING
27 THE PENDENCY OF THE UTILIZATION REVIEW THE EMPLOYER OR THE
28 INSURER SHALL PAY ALL BILLS SUBMITTED IN ACCORDANCE WITH THIS
29 SECTION SUBJECT TO RECOUPMENT BY THE EMPLOYER OR THE INSURER
30 FROM THE PROVIDER, INCLUDING PAYMENT BY THE PROVIDER OF ANY
19930S0001B0788 - 29 -
1 REASONABLE ATTORNEY FEES AND COURT COSTS INCURRED BY THE
2 EMPLOYER OR THE INSURER IN CONNECTION WITH THE RECOUPMENT. The
3 department shall authorize utilization review organizations to
4 perform utilization review under this act. Organizations not
5 authorized by the department may not engage in such utilization
6 review.
7 (ii) The utilization review organization shall issue a
8 written report of its findings and conclusions within thirty
9 days of a request. If the provider, employer, EMPLOYE or insurer <--
10 disagrees with the finding of the utilization review
11 organization, a request for reconsideration must be filed no
12 later than thirty days after receipt of the utilization review
13 report. The request for reconsideration must be in writing and
14 must contain medical evidence not available at the time of the
15 initial review.
16 (iii) The employer OR THE INSURER shall pay the cost of the <--
17 initial utilization review. The party which does not prevail on
18 reconsideration of an initial review shall bear the costs of
19 such reconsideration.
20 (iv) If the provider, employer, EMPLOYE or insurer disagrees <--
21 with the finding of the utilization review organization on
22 reconsideration, a request PETITION for review by the department <--
23 must be filed within thirty days after receipt of the
24 reconsideration report. The department shall hold an informal <--
25 hearing on the matter within thirty days of the filing of the
26 request for review. The department's decision shall be issued
27 within thirty days of the conclusion of such hearing and shall
28 be based on any and all records and reports from the utilization
29 review organization. ASSIGN THE PETITION TO A REFEREE FOR A <--
30 HEARING.
19930S0001B0788 - 30 -
1 (7) A provider shall not hold an employe liable for costs
2 related to care or service rendered in connection with a
3 compensable injury under this act. unless the employe has failed <--
4 to comply with this clause. A PROVIDER SHALL NOT BILL OR <--
5 OTHERWISE ATTEMPT TO RECOVER FROM THE EMPLOYE THE DIFFERENCE
6 BETWEEN THE PROVIDER'S CHARGE AND THE AMOUNT PAID BY THE
7 EMPLOYER OR THE INSURER.
8 (8) If the employe shall refuse reasonable services of
9 health care providers, surgical, medical and hospital services,
10 treatment, medicines and supplies, he shall forfeit all rights
11 to compensation for any injury or increase or continuation in <--
12 his incapacity shown to have resulted from such refusal.
13 (9) The payment by an insurer or employer for any medical,
14 surgical or hospital services or supplies after any statute of
15 limitations provided for in this act shall have expired shall
16 not act to reopen or revive the compensation rights for purposes
17 of such limitations.
18 (10) If acute care is provided in an acute care facility to
19 a patient with an immediately life threatening or urgent injury
20 by a Level I or Level II trauma center accredited by the
21 Pennsylvania Trauma Systems Foundation under the act of July 3,
22 1985 (P.L.164, No.45), known as the "Emergency Medical Services
23 Act," or to a burn injury patient by a burn facility which meets
24 all the service standards of the American Burn Association, or
25 if basic or advanced life support services, as defined and
26 licensed under the "Emergency Medical Services Act," are
27 provided the amount of payment shall be the usual and customary
28 charge.
29 (f.2) (1) Medical services required by the act may be
30 provided through a coordinated care organization which is
19930S0001B0788 - 31 -
1 certified by the Department of Labor and Industry subject to the
2 following:
3 (i) Each application for certification shall be accompanied
4 by a reasonable fee prescribed by the department. A certificate
5 is valid for such period as the department may prescribe unless
6 sooner revoked or suspended.
7 (ii) Application for certification shall be made in such
8 form and manner as the department shall require and shall set
9 forth information regarding the proposed plan for providing
10 services.
11 (2) The coordinated care organization must SHALL include an <--
12 adequate number and specialty distribution of licensed health
13 care providers in order to assure appropriate and timely
14 delivery of services required under the act and an appropriate
15 flexibility to workers in selecting providers. Services may be
16 provided directly, through affiliates or through contractual
17 referral arrangements with other health care providers.
18 (3) The secretary shall MAY certify an entity as a <--
19 coordinated care organization if the secretary finds that the
20 entity:
21 (i) Possesses the capacity to provide all primary medical
22 services as designated by the secretary in a manner that is
23 timely and effective.
24 (ii) Maintains a referral capacity to treat other injuries
25 and illnesses not covered by primary services but which are
26 covered by this act.
27 (iii) Provides a case management and evaluation system which
28 includes continuous monitoring of treatment from onset of injury
29 or illness until final resolution.
30 (iv) Provides a case communication system which relates
19930S0001B0788 - 32 -
1 necessary and appropriate information among the employe,
2 employer, health care providers and insurer.
3 (v) Provides appropriate peer and utilization review and a
4 care dispute resolution system.
5 (VI) MEETS QUALITY OF CARE AND COST-EFFECTIVENESS STANDARDS <--
6 BASED UPON ACCEPTED STANDARDS IN THE PROFESSION, INCLUDING
7 HEALTH CARE EFFECTIVENESS MEASURES OF THE PENNSYLVANIA HEALTH
8 CARE COST CONTAINMENT COUNCIL AND RECOMMENDATIONS ON QUALITY OF
9 CARE BY THE WORKERS' COMPENSATION ADVISORY COUNCIL.
10 (vi) (VII) Complies with any other requirements of law <--
11 regarding delivery of medical HEALTH care services. <--
12 (vii) (VIII) Establishes a written grievance procedure for <--
13 prompt and effective resolution of patient grievances.
14 (4) The secretary shall refuse to certify or may revoke or
15 suspend certification of any coordinated care organization if
16 the director SECRETARY finds that: <--
17 (i) the plan for providing medical or health care services
18 fails to meet the requirements of this section; or
19 (ii) service under the plan is not being provided in
20 accordance with terms of the plan as certified.
21 (III) SERVICES UNDER THE PLAN DO NOT MEET ACCEPTED <--
22 PROFESSIONAL STANDARDS FOR QUALITY, COST-EFFECTIVE HEALTH CARE.
23 (5) A person participating in utilization review, quality
24 assurance or peer review activities pursuant to this section
25 shall not be examined as to any communication made in the course
26 of such activities or the findings thereof, nor shall any person
27 be subject to an action for civil damages for actions taken or
28 statements made in good faith.
29 (6) Health care providers designated as rural by HCFA or
30 located in a county with a rural Health Professional Shortage
19930S0001B0788 - 33 -
1 Area, who are attempting to form or operate a coordinated care
2 organization, shall MAY be excluded from meeting all SOME OR ALL <--
3 OF THE minimum requirements set forth in paragraphs (2) and (3)
4 of this clause, as shall be determined in rules or regulations
5 promulgated by the department.
6 (7) The department shall have the power and authority to
7 promulgate, adopt, publish and use regulations for the
8 implementation of this section.
9 * * *
10 Section 9. Section 307 of the act, amended December 5, 1974
11 (P.L.782, No.263), is amended to read:
12 Section 307. In case of death, compensation shall be
13 computed on the following basis, and distributed to the
14 following persons: Provided, That in no case shall the wages of
15 the deceased be taken to be less than fifty per centum of the
16 Statewide average weekly wage for purposes of this section:
17 1. If there be no widow nor widower entitled to
18 compensation, compensation shall be paid to the guardian of the
19 child or children, or, if there be no guardian, to such other
20 persons as may be designated by the board as hereinafter
21 provided as follows:
22 (a) If there be one child, thirty-two per centum of wages of
23 deceased, but not in excess of the Statewide average weekly
24 wage.
25 (b) If there be two children, forty-two per centum of wages
26 of deceased, but not in excess of the Statewide average weekly
27 wage.
28 (c) If there be three children, fifty-two per centum of
29 wages of deceased, but not in excess of the Statewide average
30 weekly wage.
19930S0001B0788 - 34 -
1 (d) If there be four children, sixty-two per centum of wages
2 of deceased, but not in excess of the Statewide average weekly
3 wage.
4 (e) If there be five children, sixty-four per centum of
5 wages of deceased, but not in excess of the Statewide average
6 weekly wage.
7 (f) If there be six or more children, sixty-six and two-
8 thirds per centum of wages of deceased, but not in excess of the
9 Statewide average weekly wage.
10 2. To the widow or widower, if there be no children, fifty-
11 one per centum of wages, but not in excess of the Statewide
12 average weekly wage.
13 3. To the widow or widower, if there be one child, sixty per
14 centum of wages, but not in excess of the Statewide average
15 weekly wage.
16 4. To the widow or widower, if there be two children, sixty-
17 six and two-thirds per centum of wages but not in excess of the
18 Statewide average weekly wage.
19 4 1/2. To the widow or widower, if there be three or more
20 children, sixty-six and two thirds per centum of wages, but not
21 in excess of the Statewide average weekly wage.
22 5. If there be neither widow, widower, nor children entitled
23 to compensation, then to the father or mother, if dependent to
24 any extent upon the employe at the time of the injury, thirty-
25 two per centum of wages but not in excess of the Statewide
26 average weekly wage: Provided, however, That in the case of a
27 minor child who has been contributing to his parents, the
28 dependency of said parents shall be presumed: And provided
29 further, That if the father or mother was totally dependent upon
30 the deceased employe at the time of the injury, the compensation
19930S0001B0788 - 35 -
1 payable to such father or mother shall be fifty-two per centum
2 of wages, but not in excess of the Statewide average weekly
3 wage.
4 6. If there be neither widow, widower, children, nor
5 dependent parent, entitled to compensation, then to the brothers
6 and sisters, if actually dependent upon the decedent for support
7 at the time of his death, twenty-two per centum of wages for one
8 brother or sister, and five per centum additional for each
9 additional brother or sister, with a maximum of thirty-two per
10 centum of wages of deceased, but not in excess of the Statewide
11 average wage, such compensation to be paid to their guardian, or
12 if there be no guardian, to such other person as may be
13 designated by the board, as hereinafter provided.
14 7. Whether or not there be dependents as aforesaid, the
15 reasonable expense of burial, not exceeding [one thousand five
16 hundred dollars] three thousand dollars ($3,000), which shall be
17 paid by the employer or insurer directly to the undertaker
18 (without deduction of any amounts theretofore paid for
19 compensation or for medical expenses).
20 Compensation shall be payable under this section to or on
21 account of any child, brother, or sister, only if and while such
22 child, brother, or sister, is under the age of eighteen unless
23 such child, brother or sister is dependent because of disability
24 when compensation shall continue or be paid during such
25 disability of a child, brother or sister over eighteen years of
26 age or unless such child is enrolled as a full-time student in
27 any accredited educational institution when compensation shall
28 continue until such student becomes twenty-three. No
29 compensation shall be payable under this section to a widow,
30 unless she was living with her deceased husband at the time of
19930S0001B0788 - 36 -
1 his death, or was then actually dependent upon him and receiving
2 from him a substantial portion of her support. No compensation
3 shall be payable under this section to a widower, unless he be
4 incapable of self-support at the time of his wife's death and be
5 at such time dependent upon her for support. If members of
6 decedent's household at the time of his death, the terms "child"
7 and "children" shall include step-children, adopted children and
8 children to whom he stood in loco parentis, and children of the
9 deceased and shall include posthumous children. Should any
10 dependent of a deceased employe die or remarry, or should the
11 widower become capable of self-support, the right of such
12 dependent or widower to compensation under this section shall
13 cease except that if a widow remarries, she shall receive one
14 hundred four weeks compensation at a rate computed in accordance
15 with clause 2. of section 307 in a lump sum after which
16 compensation shall cease: Provided, however, That if, upon
17 investigation and hearing, it shall be ascertained that the
18 widow or widower is living with a man or woman, as the case may
19 be, in meretricious relationship and not married, or the widow
20 living a life of prostitution, the board may order the
21 termination of compensation payable to such widow or widower. If
22 the compensation payable under this section to any person shall,
23 for any cause, cease, the compensation to the remaining persons
24 entitled thereunder shall thereafter be the same as would have
25 been payable to them had they been the only persons entitled to
26 compensation at the time of the death of the deceased.
27 The board may, if the best interest of a child or children
28 shall so require, at any time order and direct the compensation
29 payable to a child or children, or to a widow or widower on
30 account of any child or children, to be paid to the guardian of
19930S0001B0788 - 37 -
1 such child or children, or, if there be no guardian, to such
2 other person as the board as hereinafter provided may direct. If
3 there be no guardian or committee of any minor, dependent, or
4 insane employe, or dependent, on whose account compensation is
5 payable, the amount payable on account of such minor, dependent,
6 or insane employe, or dependent may be paid to any surviving
7 parent, or such other person as the board may order and direct,
8 and the board may require any person, other than a guardian or
9 committee, to whom it has directed compensation for a minor,
10 dependent, or insane employe, or dependent to be paid, to
11 render, as and when it shall so order, accounts of the receipts
12 and disbursements of such person, and to file with it a
13 satisfactory bond in a sum sufficient to secure the proper
14 application of the moneys received by such person.
15 Section 10. The act is amended by adding a section to read:
16 Section 308.1. (a) The eligibility of professional athletes
17 for compensation under this act shall be limited as provided in
18 this section.
19 (b) The term "professional athlete," as used in this
20 section, shall mean a natural person employed as a professional
21 athlete by a franchise of the National Football League, the
22 National Basketball Association, the National Hockey League, the
23 National League of Professional Baseball Clubs or the American
24 League of Professional Baseball Clubs, under a contract for hire
25 or a collective bargaining agreement, whose wages as defined in
26 section 309 are more than six times the Statewide average weekly
27 wage.
28 (c) In the case of a professional athlete, any compensation
29 payable under this act with respect to partial disability shall
30 be reduced by the after-tax amount of any:
19930S0001B0788 - 38 -
1 (1) Wages payable by the employer during the period of
2 disability under a contract for hire or collective bargaining
3 agreement.
4 (2) Payments under a self-insurance, wage continuation,
5 disability insurance or similar plan funded by the employer.
6 (3) Injury protection or other injury benefits payable by
7 the employer under a contract for hire or collective bargaining
8 agreement.
9 (d) In the case of a professional athlete, the term "wages <--
10 of the injured employe" as used in section 306(b) for the
11 purpose of computing compensation for partial disability shall
12 mean two times the Statewide average weekly wage.
13 (D) NO REDUCTION SHALL BE MADE PURSUANT TO CLAUSE (C) <--
14 AGAINST ANY COMPENSATION PAYABLE UNDER THIS ACT WHICH BECOMES
15 DUE AND PAYABLE ON A DATE AFTER THE EXPIRATION OR TERMINATION OF
16 THE PROFESSIONAL ATHLETE'S EMPLOYMENT CONTRACT.
17 Section 11. Section 314 of the act, amended February 28,
18 1956 (1955 P.L.1120, No.356), is amended to read:
19 Section 314. (a) At any time after an injury the employe,
20 if so requested by his employer, must submit himself for
21 examination, at some reasonable time and place, to a physician
22 or physicians legally authorized to practice under the laws of
23 such place, who shall be selected and paid by the employer. If
24 the employe shall refuse upon the request of the employer, to
25 submit to the examination by the physician or physicians
26 selected by the employer, [the board] a referee assigned by the
27 department may, upon petition of the employer, order the employe
28 to submit to an examination at a time and place set by [it] the
29 referee, and by the physician or physicians selected and paid by
30 the employer, or by a physician or physicians designated by [it]
19930S0001B0788 - 39 -
1 the referee and paid by the employer. The [board] referee may at
2 any time after such first examination, upon petition of the
3 employer, order the employe to submit himself to such further
4 examinations as [it] the referee shall deem reasonable and
5 necessary, at such times and places and by such physicians as
6 [it] the referee may designate; and in such case, the employer
7 shall pay the fees and expenses of the examining physician or
8 physicians, and the reasonable traveling expenses and loss of
9 wages incurred by the employe in order to submit himself to such
10 examination. The refusal or neglect, without reasonable cause or
11 excuse, of the employe to submit to such examination ordered by
12 the [board] referee, either before or after an agreement or
13 award, shall deprive him of the right to compensation, under
14 this article, during the continuance of such refusal or neglect,
15 and the period of such neglect or refusal shall be deducted from
16 the period during which compensation would otherwise be payable.
17 (b) The employe shall be entitled to have a physician or
18 physicians of his own selection, to be paid by him, participate
19 in any examination requested by his employer or ordered by the
20 [board] referee.
21 Section 12. Section 321 of the act, added March 29, 1972
22 (P.L.159, No.61), is amended to read:
23 Section 321. [Nothing contained in this act shall apply to
24 or in any way affect any person who at the time of injury is
25 engaged in domestic service: Provided, however, That in cases
26 where the employer of any such person shall have, prior to such
27 injury, by application to the Workmen's Compensation Board,
28 approved by the board, elected to come within the provisions of
29 the act, such exemption shall not apply.] Nothing contained in
30 this act shall apply to or in any way affect:
19930S0001B0788 - 40 -
1 (1) Any person who at the time of injury is engaged in
2 domestic service: Provided, however, That in cases where the
3 employer of any such person shall have, prior to such injury, by
4 application to the department, and approved by the department,
5 elected to come within the provisions of the act, such exemption
6 shall not apply.
7 (2) Any person who is a licensed real estate salesperson or
8 an associate real estate broker, affiliated with a licensed real
9 estate broker, under a written agreement, remunerated on a
10 commission only basis and who qualifies as an independent
11 contractor for State tax purposes under the act of March 4, 1971
12 (P.L.6, No.2), known as the "Tax Reform Code of 1971."
13 Section 13. The act is amended by adding sections to read:
14 Section 322. It shall be unlawful for any employe to receive
15 compensation under this act and at the same time receive IF HE <--
16 IS AT THE SAME TIME RECEIVING workers' compensation under the
17 laws of the Federal Government or any other state for the same
18 injury. Further, it shall be unlawful for an employe to receive <--
19 RECEIVING compensation under this act simultaneously from two or <--
20 more employers or insurers during any period of total disability
21 TO RECEIVE TOTAL COMPENSATION IN EXCESS OF THE MAXIMUM WEEKLY <--
22 COMPENSATION PAYABLE UNDER THIS ACT. Nothing in this section
23 shall be deemed to prohibit payment of workers' compensation on
24 a pro-rata basis, where an employe suffers from more than one
25 injury while in the employ of more than one employer: Provided,
26 however, That the total compensation paid shall not exceed
27 maximum limits. THE MAXIMUM WEEKLY COMPENSATION PAYABLE UNDER <--
28 THIS ACT: AND, PROVIDED FURTHER, THAT ANY SUCH PRO RATA
29 CALCULATION SHALL BE BASED UPON THE EARNINGS BY SUCH AN EMPLOYE
30 IN THE EMPLOY OF EACH SUCH EMPLOYER AND THAT ALL WAGE LOSSES
19930S0001B0788 - 41 -
1 SUFFERED AS A RESULT OF ANY INJURY WHICH IS COMPENSABLE UNDER
2 THIS ACT SHALL BE USED AS THE BASIS FOR CALCULATING THE TOTAL
3 COMPENSATION TO BE PAID ON A PRO RATA BASIS.
4 Section 323. (a) A construction design professional who is
5 retained to perform professional services on a construction
6 project, or any employe of a construction design professional
7 who is assisting or representing the construction design
8 professional in the performance of professional services on the
9 site of the construction project, shall not be liable under this
10 act for any injury or death of a worker not an employe of such
11 design professional on the construction project for which
12 workers' compensation is payable under the provisions of this
13 act.
14 (b) The immunity from liability provided by the above <--
15 subsection shall not apply if:
16 (1) the injury or death is caused by the negligent
17 preparation of design plans or specifications by the
18 construction design professional;
19 (2) the construction design professional assumes
20 responsibility for safety practices at the construction project
21 by written contract; or
22 (3) the construction design professional actually exercises
23 control over the portion of the construction site where the
24 worker is injured or killed.
25 (c) (B) Notwithstanding any provisions to the contrary, this <--
26 section shall apply to claims for compensation based on injuries
27 or death which incurred OCCURRED after the effective date of <--
28 this act SECTION. <--
29 Section 14. Sections 401 first paragraph and 402 of the act, <--
30 amended February 8, 1972 (P.L.25, No.12), are amended to read:
19930S0001B0788 - 42 -
1 SECTION 324. ANY PERSON RECEIVING COMPENSATION UNDER SECTION <--
2 306(A) FOR A PERIOD OF MORE THAN FIVE HUNDRED TWENTY WEEKS SHALL
3 RECEIVE REIMBURSEMENTS FOR NON-INDEMNITY EXPENSES, PAYABLE ON
4 THE FIRST DAY OF JULY AND THE FIRST DAY OF DECEMBER OF EACH
5 YEAR, AS FOLLOWS:
6 WEEKS RECEIVING REIMBURSEMENT
7 COMPENSATION SUMS
8 988 WEEKS OR MORE $500
9 AT LEAST 936 WEEKS, BUT LESS THAN 988 WEEKS $450
10 AT LEAST 884 WEEKS, BUT LESS THAN 936 WEEKS $400
11 AT LEAST 832 WEEKS, BUT LESS THAN 884 WEEKS $350
12 AT LEAST 780 WEEKS, BUT LESS THAN 832 WEEKS $300
13 AT LEAST 520 WEEKS, BUT LESS THAN 780 WEEKS $250
14 SECTION 14. THE FIRST PARAGRAPH OF SECTION 401 OF THE ACT,
15 AMENDED FEBRUARY 8, 1972 (P.L.25, NO.12), IS AMENDED TO READ:
16 Section 401. The term "referee," when used in this [article]
17 act, shall mean [Workmen's Compensation Referee] a Workers'
18 Compensation Judge of the Department of Labor and Industry,
19 appointed by and subject to the general supervision of the
20 Secretary of Labor and Industry for the purpose of conducting
21 departmental hearings under this act. The secretary may
22 establish different classes of [referees.] these judges. Any
23 reference in any statute to a workmen's compensation referee
24 shall be deemed to be a reference to a workers' compensation
25 judge.
26 * * *
27 Section 402. All proceedings before any referee, except <--
28 those for which an informal conference has been applied for as
29 provided by section 402.1 of this act, shall be instituted by
30 claim petition or other petition as the case may be or on the
19930S0001B0788 - 43 -
1 department's own motion, and all appeals to the board, shall be
2 instituted by appeal addressed to the board. All claim
3 petitions, requests for informal conferences and other petitions
4 and appeals shall be in writing and in the form prescribed by
5 the department.
6 Section 15. The act is amended by adding a section to read:
7 Section 402.1. (a) Prior to the filing of a petition under
8 this act or in any claim for compensation under section 406.1,
9 410 or 411 of this act or where the right to compensation or
10 medical services, or the amount thereof, is in dispute, any
11 party may file a notice of request with the department for an
12 informal conference pursuant to this act. The department shall
13 assign the matter to a referee for an informal conference, which
14 shall be held within fourteen days of such filing.
15 (b) At any informal conference held pursuant to this
16 section:
17 (i) the referee may accept the statements of both parties,
18 together with any medical reports, witnesses' statements or
19 other documents which the parties would like to present;
20 (ii) all communications, verbal or written, from the parties
21 to the referee and any information and evidence presented to the
22 referee during the proceedings are confidential; and
23 (iii) each party may be represented, but the employer may
24 only be represented by an attorney at the informal conference if
25 the employe is also represented by an attorney at the informal
26 conference.
27 (c) The referee shall attempt to resolve the issues in
28 dispute between the parties, but in no event shall any
29 recommendations or findings made by the referee be binding upon
30 the parties unless accepted in writing by both parties. If the
19930S0001B0788 - 44 -
1 parties come to agreement, the referee shall reduce such
2 agreement to writing, which shall be signed by all parties with
3 the department. Unless the parties jointly agree to a time
4 extension, all proceedings within an informal conference shall
5 be completed within thirty-five days of the filing of the
6 informal conference. Joint agreement to a time extension shall
7 stay the proceedings for the time agreed upon.
8 (d) In the event that the parties cannot resolve their
9 dispute, either party may file a petition with the department
10 requesting a hearing on the matter. Such petition will be
11 assigned to a referee for a hearing pursuant to section 414 of
12 this act.
13 (e) The results of the informal conference, as well as the
14 testimony, witnesses and evidence presented at the informal
15 conference, shall not be admissible at any subsequent proceeding
16 on the claim.
17 (f) No referee who participates in an informal conference
18 conducted pursuant to this section shall be compelled or
19 permitted to testify about any matter discussed or revealed
20 during such proceedings in any other proceeding pursuant to this
21 act, except matters involving fraud.
22 Section 16 15. Section 420 of the act, amended February 8, <--
23 1972 (P.L.25, No.12), is amended to read:
24 Section 420. (a) The board, the department or a referee, if
25 it or he deem it necessary, may, of its or his own motion,
26 either before, during, or after any hearing, make or cause to be
27 made an investigation of the facts set forth in the petition or
28 answer or facts pertinent in any injury under this act. The
29 board, department or referee may appoint one or more impartial
30 physicians or surgeons to examine the injuries of the plaintiff
19930S0001B0788 - 45 -
1 and report thereon, or may employ the services of such other
2 experts as shall appear necessary to ascertain the facts. The
3 referee when necessary or appropriate or upon request of a party
4 in order to rule on requests for review filed under clause (f.1)
5 of section 306 of this act, or under other provisions of this
6 act, may ask for an opinion from peer review about the necessity
7 or frequency of treatment under clause (f.1) of section 306 of
8 this act to peer review. The peer review report or the peer <--
9 report of any physician, surgeon, or expert appointed by the
10 department or by a referee, including the report of a peer
11 review organization, shall be filed with the board or referee,
12 as the case may be, and shall be a part of the record and open
13 to inspection as such. The referee shall consider the report as
14 evidence but shall not be bound by such report.
15 (b) The board or referee, as the case may be, shall fix the
16 compensation of such physicians, surgeons, and experts, and
17 other peer review organizations which, when so fixed, shall be
18 paid out of the sum appropriated to the Department of Labor and
19 Industry for such purpose.
20 Section 17 16. Section 422 of the act, amended February 8, <--
21 1972 (P.L.25, No.12) and March 29, 1972 (P.L.159, No.61), is
22 amended to read:
23 Section 422. (a) Neither the board nor any of its members
24 nor any referee shall be bound by the common law or statutory
25 rules of evidence in conducting any hearing or investigation,
26 but all findings of fact shall be based upon sufficient
27 competent evidence to justify same. All parties to an <--
28 adjudicatory proceeding are entitled to a reasoned decision,
29 containing findings of fact and conclusions of law based upon
30 the whole record which clearly and concisely state and explain
19930S0001B0788 - 46 -
1 the rationale for the decision so that all can determine why and
2 how a particular result was reached. The adjudicator shall
3 specify the evidence upon which the adjudicator relies in
4 conformity with this section. The adjudication shall provide the
5 basis for meaningful appellate review.
6 (b) If any party or witness resides outside of the
7 Commonwealth, or through illness or other cause is unable to
8 testify before the board or a referee, his or her testimony or
9 deposition may be taken, within or without this Commonwealth, in
10 such manner and in such form as the department may, by special
11 order or general rule, prescribe. The records kept by a hospital
12 of the medical or surgical treatment given to an employe in such
13 hospital shall be admissible as evidence of the medical and
14 surgical matters stated therein.
15 (c) Where any claim for compensation is at issue before a
16 referee [involves [twenty-five] FIFTY-TWO weeks or less of <--
17 disability], either the employe or the employer may submit a <--
18 certificate by any qualified physician as to the history,
19 examination, treatment, diagnosis and cause of the condition,
20 and sworn reports by other witnesses as to any other facts and
21 such statements shall be admissible as evidence of medical and
22 surgical or other matters therein stated and findings of fact
23 may be based upon such certificates or such reports[.]: <--
24 Provided, That, any party shall be allowed the opportunity to
25 take a deposition for purposes of cross-examination, upon the
26 tendering to the party offering said report reasonable expenses,
27 including the fee for such deposition: And further provided,
28 That the use of a deposition shall not preclude introduction of
29 a medical report. Should a dispute arise as to the
30 reasonableness of the amounts demanded or tendered, the referee
19930S0001B0788 - 47 -
1 hearing the petition shall issue an order relating to the
2 assessment of costs.
3 (d) Where an employer shall have furnished surgical and
4 medical services or hospitalization in accordance with the
5 provisions of [subsection (f) of] section 306(f.1), or where the
6 employe has himself procured them, the employer or employe
7 shall, upon request, in any pending proceeding, be furnished
8 with, or have made available, a true and complete record of the
9 medical and surgical services and hospital treatment, including
10 X rays, laboratory tests, and all other medical and surgical
11 data in the possession or under the control of the party
12 requested to furnish or make available such data.
13 (e) The department may adopt rules and regulations governing
14 the conduct of all hearings held pursuant to any provisions of
15 this act, and hearings shall be conducted in accordance
16 therewith, and in such manner as best to ascertain the
17 substantial rights of the parties.
18 Section 18. Section 423 of the act, amended March 29, 1972 <--
19 (P.L.159, No.61), is amended to read:
20 Section 423. (a) Any party in interest may, within twenty
21 days after notice of a referee's [award or disallowance of
22 compensation] adjudication shall have been served upon him, take
23 an appeal to the board on the ground: (1) that the [award or
24 disallowance of compensation] adjudication is not in conformity
25 with the terms of this act, or that the referee committed any
26 other error of law; (2) that the findings of fact and [award or
27 disallowance of compensation] adjudication was unwarranted by
28 sufficient, competent evidence or was procured by fraud,
29 coercion, or other improper conduct of any party in interest.
30 The board may, upon cause shown, extend the time provided in
19930S0001B0788 - 48 -
1 this article for taking such appeal or for the filing of an
2 answer or other pleading.
3 (b) In any such appeal the board may disregard the findings
4 of fact of the referee if not supported by sufficient, competent
5 evidence and if it deem proper may hear other evidence, and may
6 substitute for the findings of the referee such findings of fact
7 as the sufficient, competent evidence taken before the referee
8 and the board, as hereinbefore provided, may, in the judgment of
9 the board, require, and may make such [disallowance or award of
10 compensation or other order] adjudication as the facts so
11 [founded] found by it may require.
12 Section 19 17. Sections 438 and 440 of the act, added <--
13 February 8, 1972 (P.L.25, No.12), are amended to read:
14 Section 438. (a) An employer shall report all injuries
15 received by employes in the course of or resulting from their
16 employment immediately to the employer's insurer. If the
17 employer is self-insured such injuries shall be reported to the
18 person responsible for management of the employer's compensation
19 program.
20 (b) An employer shall report such injuries to the Department
21 of Labor and Industry by filing directly with the department on
22 the form it prescribes a report of injury within forty-eight
23 hours for every injury resulting in death, and mailing within
24 [three] seven days after the date of injury for all other
25 injuries except those resulting in disability continuing less
26 than the day, shift, or turn in which the injury was received. A
27 copy of this report to the department shall be mailed to the
28 employer's insurer forthwith.
29 (c) Reports of injuries filed with the department under this
30 section shall not be evidence against the employer or the
19930S0001B0788 - 49 -
1 employer's insurer in any proceeding either under this act or
2 otherwise. Such reports may be made available by the department
3 to other State or Federal agencies for study or informational
4 purposes.
5 Section 440. (a) In any contested case where the insurer
6 has contested liability in whole or in part, including contested
7 cases involving petitions to terminate, reinstate, increase,
8 reduce or otherwise modify compensation awards, agreements or
9 other payment arrangements or to set aside final receipts, the
10 employe or his dependent, as the case may be, in whose favor the
11 matter at issue has been finally determined IN WHOLE OR IN PART <--
12 shall be awarded, in addition to the award for compensation, a
13 reasonable sum for costs incurred for attorney's fee, witnesses,
14 necessary medical examination, and the value of unreimbursed
15 lost time to attend the proceedings: Provided, That cost for
16 attorney fees may be excluded when a reasonable basis for the
17 contest has been established[: And provided further, That if] BY <--
18 THE EMPLOYER OR THE INSURER.
19 (b) If counsel fees are awarded and assessed against the
20 insurer or employer, then the referee must make a finding as to
21 the amount and the length of time for which such counsel fee is
22 payable, based upon the complexity of the factual and legal
23 issues involved, the skill required, the duration of the
24 proceedings and the time and effort required and actually
25 expended: If the insurer has paid or tendered payment of
26 compensation and the controversy relates to the amount of
27 compensation due, costs for attorney's fee shall be based only
28 on the difference between the final award of compensation and
29 the compensation paid or tendered by the insurer.
30 [In contested cases involving petitions to terminate,
19930S0001B0788 - 50 -
1 reinstate, increase, reduce or otherwise modify compensation
2 awards, agreements or other payment arrangements or to set aside
3 final receipts, where the contested issue, in whole or part, is
4 resolved in favor of the claimant, the claimant shall be
5 entitled to an award of reasonable costs as hereinabove set
6 forth.]
7 Section 20. The act is amended by adding a section to read: <--
8 Section 440.1. In the event the insurer is found to have
9 acted in an unreasonable manner and in bad faith in refusing to
10 pay the benefits when due, the insurer shall pay, in addition to
11 the benefits owed and the interest thereon, a reasonable
12 attorney fee based upon actual time expended.
13 Section 20.1 18. Section 447 of the act, added May 20, 1976 <--
14 (P.L.135, No.61) is amended to read:
15 Section 447. (a) There is hereby created an advisory
16 council, to be known as the Pennsylvania [Workmen's] Workers'
17 Compensation Advisory Council[, and to be composed of men and
18 women with an equal number of employer, employe, and public
19 representatives who may fairly be representative because of
20 their vocation, employment, or affiliations]. The council shall
21 [consist] be comprised of [a maximum of seven] ten EIGHT members <--
22 [including the], with five FOUR members being employe <--
23 representatives and five FOUR members being employer <--
24 representatives. The Secretary of the Department of Labor and
25 Industry[, who] shall be an ex officio member. The members of
26 such council shall be appointed as follows: three each ONE <--
27 EMPLOYE REPRESENTATIVE AND ONE EMPLOYER REPRESENTATIVE by the
28 [secretary within thirty days of the effective date of this
29 amendatory act and shall serve a term of two years and until
30 their successors have been appointed and qualified] President
19930S0001B0788 - 51 -
1 pro tempore of the Senate and, ONE EMPLOYE REPRESENTATIVE AND <--
2 ONE EMPLOYER REPRESENTATIVE BY the Speaker of the House of
3 Representatives and two each, ONE EMPLOYE REPRESENTATIVE AND ONE <--
4 EMPLOYER REPRESENTATIVE by the minority leader of the Senate and
5 ONE EMPLOYE REPRESENTATIVE AND ONE EMPLOYER REPRESENTATIVE BY <--
6 the minority leader of the House of Representatives. The members
7 of the council shall select one of their number to be chairman.
8 [Such council shall consider and advise the department upon all
9 matters related to the administration of The Pennsylvania
10 Workmen's Compensation Act and The Pennsylvania Occupational
11 Disease Act. Such council may recommend to the secretary upon
12 its own initiative such changes in the provisions of these acts
13 and the administration thereof as it deems necessary and shall
14 make periodic reports to the secretary regarding the performance
15 of its duties and functions.]
16 (b) [In the performance of its duties, the] (1) The council
17 may hold hearings, receive testimony, solicit and receive
18 comments [and information] from interested parties and the
19 general public and shall have full access to information
20 relating to the [purpose of these acts] administration of this
21 act by the Department of Labor and Industry. The council shall
22 not have access to confidential medical information pertaining
23 to individual claimants, but may develop statistical studies and
24 surveys concerning [the] aspects of incidence of [occupational]
25 injuries [and diseases generally.], claims management, <--
26 litigation, and adherence to the provisions of this act and the
27 act of June 21, 1939 (P.L.566, No.284), known as "The <--
28 Pennsylvania Occupational Disease Act." OCCUPATIONAL DISEASE <--
29 ACT.
30 (2) The council shall review annually any requests for
19930S0001B0788 - 52 -
1 funding by the department and any assessments against employers
2 or insurers related thereto and provide a report to the
3 secretary and the Governor GOVERNOR, THE SECRETARY AND THE <--
4 GENERAL ASSEMBLY regarding the appropriateness of such requests.
5 (3) The council shall review proposed legislation and
6 regulations pertaining to this act and provide comment at least
7 quarterly to the Governor, the secretary and the General
8 Assembly on the effects of such proposals.
9 (4) The council shall provide to the Governor, the secretary
10 and the General Assembly, on an annual basis, a report on the
11 activities of the council, making recommendations concerning
12 needed improvements in the workers' compensation system and the
13 administration of the system. The report under this paragraph
14 shall be made during the General Assembly's consideration of the
15 General Appropriations Act for the succeeding fiscal year. The
16 report is SHALL BE due no later than May 1. <--
17 (5) THE COUNCIL SHALL MAKE RECOMMENDATIONS TO THE SECRETARY <--
18 REGARDING THE DEVELOPMENT OF UNIFORM HEALTH CARE CRITERIA AND
19 POLICIES FOR UTILIZATION REVIEW, FOR DETERMINING QUALITY AND
20 COST-EFFECTIVE HEALTH CARE, FOR THE DETERMINATION OF THE
21 REASONABLENESS OR NECESSITY OF TREATMENT BY HEALTH CARE
22 PROVIDERS, FOR THE SUSPENSION OF PAYMENT TO INDIVIDUAL HEALTH
23 CARE PROVIDERS WHO ARE IDENTIFIED THROUGH UTILIZATION REVIEW OR
24 PEER REVIEW AS PROVIDING UNREASONABLE OR UNNECESSARY TREATMENT
25 WITH A FREQUENCY WHICH EXCEEDS ACCEPTED STANDARDS OF THEIR
26 PROFESSION, AND FOR THE SUSPENSION FROM EMPLOYERS' LISTS OF
27 DESIGNATED PROVIDERS OF ANY INDIVIDUAL HEALTH CARE PROVIDERS WHO
28 ARE IDENTIFIED AS PROVIDING INADEQUATE OR SUBSTANDARD TREATMENT
29 WITH A FREQUENCY WHICH EXCEEDS ACCEPTED STANDARDS OF THEIR
30 PROFESSION.
19930S0001B0788 - 53 -
1 (6) THE COUNCIL SHALL REVIEW THE ANNUAL ACCESSIBILITY STUDY
2 REQUIRED BY SECTION 306(F.1)(III) OF THIS ACT AND SHALL MAKE
3 RECOMMENDATIONS TO THE SECRETARY REGARDING THE NEED FOR NEW
4 ALLOWANCES FOR HEALTH CARE PROVIDERS.
5 (7) THE COUNCIL SHALL MAKE RECOMMENDATIONS TO THE SECRETARY
6 REGARDING THE CERTIFICATION OF COORDINATED CARE ORGANIZATIONS
7 AND THE APPROVAL OF UTILIZATION REVIEW ORGANIZATIONS AND PERSONS
8 QUALIFIED TO PERFORM PEER REVIEW.
9 (8) THE COUNCIL SHALL CONSULT WITH HEALTH CARE PROVIDERS AND
10 PROFESSIONAL ASSOCIATIONS REPRESENTING HEALTH CARE PROVIDERS
11 WITH REGARD TO ITS RECOMMENDATIONS UNDER PARAGRAPHS (5), (6) AND
12 (7).
13 (9) THE COUNCIL SHALL REVIEW THE RESERVING PRACTICES OF
14 INSURERS IN THE DETERMINATION OF EXPERIENCE MODIFICATIONS AND
15 MAY MAKE RECOMMENDATIONS TO THE SECRETARY AND THE COMMISSIONER
16 REGARDING THOSE PRACTICES.
17 (c) The members of the advisory council, once appointed,
18 shall serve staggered terms of two and three years, equally <--
19 balanced among the representatives of employes and employers.
20 UNTIL THE EXPIRATION OF THE TERMS OF OFFICE OF THEIR APPOINTING <--
21 AUTHORITY. Members shall serve without compensation, but shall
22 be entitled to be reimbursed for all necessary expenses incurred
23 in the discharge of their duties. The secretary shall [appoint
24 an executive secretary and such other personnel as he shall deem
25 necessary to aid] provide facilities and clerical and
26 professional support as needed by the council in the performance
27 of its [functions] duties. The compensation of such [employes]
28 staff and the amounts allowed them and to members of the council
29 for traveling and other council expenses shall be deemed part of
30 the expenses incurred in connection with the administration of
19930S0001B0788 - 54 -
1 [The Pennsylvania Workmen's Compensation and The Pennsylvania
2 Occupational Disease Acts] this act.
3 Section 20.2 19. The act is amended by adding a section <--
4 SECTIONS to read: <--
5 Section 448. (a) An insurer issuing a workers' compensation
6 and employers' liability insurance policy shall offer, upon
7 request, as part of the policy or by endorsement, deductibles
8 optional to the policyholder for benefits payable under the
9 policy, subject to approval by the commissioner and subject to
10 underwriting by the insurer consistent with the principles in
11 clause (b). The commissioner shall promulgate at least three
12 plans with varying deductible options, the least amount of which
13 shall be no less than one thousand dollars ($1,000), nor more
14 than two thousand five hundred dollars ($2,500). The
15 commissioner's authority to promulgate any such plans shall not
16 preclude an insurer from negotiating a deductible in excess of
17 the largest deductible plan herein authorized, SUBJECT TO <--
18 APPROVAL BY THE COMMISSIONER AND SUBJECT TO UNDERWRITING BY THE
19 INSURER CONSISTENT WITH THE PRINCIPLES IN SUBSECTION (B) OF THIS
20 SECTION.
21 (b) The following standards shall govern the commissioner's
22 promulgation, and an insurer's offer, of deductible plans:
23 (1) Claimants' rights are properly protected and claimants'
24 benefits are paid without regard to any such deductible.
25 (2) Appropriate premium reductions reflect the type and
26 level of any deductible approved by the commissioner and
27 selected by the policyholder.
28 (3) Premium reductions for deductibles are determined before
29 application of any experience modification, premium surcharge or
30 premium discount.
19930S0001B0788 - 55 -
1 (4) Recognition is given to policyholder characteristics,
2 including size, financial capabilities, nature of activities and
3 number of employes.
4 (5) If the policyholder selects a deductible, the
5 policyholder is liable to the insurer for the deductible amount
6 in regard to benefits paid for compensable claims.
7 (6) The insurer pays all of the deductible amount,
8 applicable to a compensable claim, to the person or provider
9 entitled to benefits and then seeks reimbursement from the
10 policyholder for the applicable deductible amount.
11 (7) Failure to reimburse deductible amounts by the
12 policyholder to the insurer is treated under the policy in the
13 same manner as non-payment of premiums.
14 SECTION 449. (A) IT SHALL BE UNLAWFUL FOR ANY EMPLOYER TO <--
15 KNOWINGLY DISCHARGE, DEMOTE, SUSPEND, OR IN ANY OTHER MANNER, TO
16 DISCRIMINATE AGAINST ANY EMPLOYE OR THREATEN TO DISCHARGE,
17 DEMOTE, SUSPEND OR IN ANY OTHER MANNER DISCRIMINATE AGAINST ANY
18 EMPLOYE IN RETALIATION FOR THE EMPLOYE'S REPORTING AN INJURY,
19 FILING A PETITION, RECEIVING BENEFITS OR TESTIFYING ON BEHALF OF
20 HIMSELF OR ANOTHER IN A HEARING ON A PETITION UNDER THIS ACT.
21 (B) AN EMPLOYE WHO ALLEGES A VIOLATION OF THIS SECTION MAY
22 BRING A CIVIL ACTION FOR APPROPRIATE RELIEF IN A COURT OF COMMON
23 PLEAS WHICH SHALL BE REFERRED TO AN ARBITRATION PANEL PURSUANT
24 TO THE ARBITRATION PROCEDURES IN FORCE IN THAT COURT. SUCH AN
25 ACTION SHALL BE BROUGHT WITHIN ONE HUNDRED EIGHTY DAYS AFTER THE
26 EMPLOYE KNEW, OR SHOULD HAVE KNOWN, OF THE ALLEGED VIOLATION OF
27 THIS SECTION.
28 (C) THE PANEL, IN RENDERING A JUDGMENT IN AN ACTION BROUGHT
29 UNDER THIS SECTION, SHALL ORDER, AS THE PANEL CONSIDERS
30 APPROPRIATE, REINSTATEMENT OF THE EMPLOYE, REMOVAL OF THE
19930S0001B0788 - 56 -
1 DISCIPLINE, PAYMENT OF BACK WAGES, FULL REINSTATEMENT OF FRINGE
2 BENEFITS AND SENIORITY RIGHTS OR ANY COMBINATION OF THESE
3 REMEDIES. THE PANEL SHALL ALSO AWARD THE COMPLAINANT ALL OR A
4 PORTION OF THE COSTS OF LITIGATION, INCLUDING REASONABLE
5 ATTORNEY FEES AND WITNESS FEES, IF THE PANEL DETERMINES THAT THE
6 AWARD IS APPROPRIATE.
7 (D) AN EMPLOYER SHALL POST NOTICES AND USE OTHER APPROPRIATE
8 MEANS TO NOTIFY EMPLOYES AND KEEP THEM INFORMED OF PROTECTIONS
9 AND OBLIGATIONS UNDER THIS SECTION.
10 Section 21 20. The act is amended by adding articles to <--
11 read:
12 ARTICLE VII.
13 LOSS COSTS RATING INSURANCE RATES <--
14 Section 701. It is the intent of the General Assembly:
15 (1) To protect policyholders and the public against the
16 adverse effect of excessive, inadequate or unfairly
17 discriminatory rates.
18 (2) To encourage, as the most effective way to produce rates
19 that conform to the standards of paragraph (1) of this section,
20 independent action by and reasonable price competition among
21 insurers.
22 (3) To provide formal regulatory controls for use if price
23 competition fails.
24 (4) To authorize cooperative action among insurers in the
25 ratemaking process, and to regulate such cooperation in order to
26 prevent practices that tend to bring about monopoly or to lessen
27 or destroy competition.
28 (5) To provide rates that are responsive to competitive
29 market conditions and to improve the availability of insurance
30 in this Commonwealth.
19930S0001B0788 - 57 -
1 Section 702. This article applies to the classification of
2 risks, underwriting rules, MERIT RATING PLANS, PURE PREMIUM <--
3 RATES, expenses, losses and profits for insurance of employers
4 and employes under this act, for insurance under the
5 Occupational Disease Act and for insurance with respect to the
6 Commonwealth as to liability under the Federal Coal Mine Health
7 and Safety Act of 1969 (Public Law 91-173, 30 U.S.C. § 801 et
8 seq.).
9 Section 703. As used in this article:
10 "Classification system" or "classification" means the plan,
11 system or arrangement for recognizing differences in exposure to
12 hazards among industries, occupations or operations of insurance
13 policyholders.
14 "Competitive market" means a market, except when found to be
15 non-competitive under the standards of section 710 of this
16 article.
17 "Department" means the Insurance Department of the
18 Commonwealth.
19 "Experience rating" means a rating procedure utilizing past
20 insurance experience of the individual policyholder to forecast
21 future losses by measuring the policyholder's loss experience
22 against the loss experience of policyholders in the same
23 classification to produce a prospective premium credit, debit or
24 unity modification.
25 "Market" means the interaction in this State, between buyers
26 and sellers of workers' compensation and employers' liability
27 insurance within this Commonwealth pursuant to the provisions of
28 this article.
29 "Provision for claim payment" means historical aggregate
30 losses projected through development to their ultimate value and
19930S0001B0788 - 58 -
1 through trending to a future point in time, but excluding all
2 loss adjustment or claim management expenses, other operating
3 expenses, assessments, taxes, and profit or contingency
4 allowances.
5 "Rate" or "rates" means rate of premium, policy and
6 membership fee, or any other charge made by an insurer for or in
7 connection with a contract or policy of insurance of the kind to
8 which this article applies.
9 "Rating organization" means one or more organizations situate
10 within this Commonwealth, subject to supervision and to
11 examination by the commissioner and approved by the commissioner
12 as adequately equipped to perform the functions specified in
13 this article on an equitable and impartial basis.
14 "Statistical plan" means the plan, system or arrangement used
15 in collecting data.
16 "Supplementary rate information" means any manual or plan of
17 rates, statistical plan, classification system, rating schedule,
18 minimum premium policy fee, rating rule, rate-related
19 underwriting rule, and any other information, not otherwise
20 inconsistent with the purposes of this article, prescribed by
21 rule of the commissioner.
22 "Supporting information" means the experience and judgment of
23 the filer and the experience or data of other insurers or
24 organizations relied on by the filer, the interpretation of any
25 statistical data relied on by the filer, description or methods
26 used in making the rates, and any other similar information
27 required to be filed by the commissioner.
28 Section 704. (a) The following standards shall apply to the
29 making and use of rates under this article:
30 (1) Rates may not be:
19930S0001B0788 - 59 -
1 (i) excessive or inadequate, as defined under this article;
2 or
3 (ii) unfairly discriminatory.
4 (2) Rates in a competitive market are not excessive. NOTHING <--
5 IN THIS ARTICLE SHALL BE CONSTRUED TO PROHIBIT THE COMMISSIONER
6 FROM DISAPPROVING A RATE WITHOUT DETERMINING IF THERE IS A
7 REASONABLE DEGREE OF COMPETITION IN A MARKET. Rates in a market
8 as to which the commissioner has issued a ruling DETERMINED <--
9 under section 710, that a reasonable degree of competition does
10 not exist, are excessive if they are likely to produce a long
11 run profit that is unreasonably high in relation to the risk
12 undertaken and the services to be rendered.
13 (3) A rate may not be held to be inadequate unless:
14 (i) it is unreasonably low for the insurance provided and
15 continued use of it would endanger solvency of the insurer; or
16 (ii) the rate is unreasonably low for the insurance provided
17 and the use of the rate by the insurer has had or, if continued,
18 will have the effect of destroying competition or of creating
19 monopoly.
20 (b) In determining whether rates comply with standards under
21 clause (a), due consideration shall be given to:
22 (1) Past and prospective loss experience within and outside
23 this Commonwealth in accordance with sound actuarial principles.
24 (2) Catastrophe CONFLAGRATION OR CATASTROPHE hazards. <--
25 (3) A reasonable margin for underwriting profit and
26 contingencies.
27 (4) Dividends, savings or unabsorbed premium deposits
28 allowed or returned by insurers to their policyholders or
29 members or subscribers.
30 (5) Past and prospective expenses, both countrywide and
19930S0001B0788 - 60 -
1 those specially applicable to this Commonwealth.
2 (6) Investment income earned or realized by insurers both
3 from their unearned premium and from their loss reserve funds.
4 (7) All relevant factors within and outside this
5 Commonwealth in accordance with sound actuarial principles.
6 (c) As to the kinds of insurance to which this article
7 applies, the systems of expense provisions included in the rates
8 for use by an insurer or group of insurers may differ from those
9 of any other insurers or groups of insurers to reflect the
10 requirements of the operating methods of the insurer or group of
11 insurers.
12 Section 705. (a) Each authorized insurer shall file with
13 the commissioner all rates and supplementary rate information
14 and all changes and amendments thereof made by it for use in
15 this Commonwealth by the date they become effective. Each rating
16 organization shall file with the commissioner a filing for the
17 provision for claim payment and such other filings as are
18 authorized pursuant to this article. The Secretary of Labor and
19 Industry shall be a member of the board of directors or
20 governing body of any rating organization.
21 (b) An insurer may not make or issue a contract or policy of
22 insurance of the kind to which this article applies, except in
23 accordance with the filings which are in effect for the insurer
24 as provided in this article.
25 Section 706. Each filing and any supporting information
26 filed under this article shall, as soon as filed, be open to
27 public inspection. Copies may be obtained by any person on
28 request and upon payment of a reasonable charge.
29 Section 707. (a) Each workers' compensation insurer shall
30 be a member of a rating organization. Each workers' compensation
19930S0001B0788 - 61 -
1 insurer shall adhere to the policy forms filed by the rating
2 organization.
3 (b) (1) Every workers' compensation insurer shall adhere to
4 the uniform classification system and uniform experience rating
5 plan filed with the commissioner by the rating organization to
6 which it belongs: Provided, That the system and plan have been
7 approved by the commissioner as part of the approval of the
8 rating organization's most recent filing for the provision for
9 claim payment.
10 (2) (i) Subject to the conditions of this paragraph, an
11 insurer may develop subclassifications of the uniform
12 classification system upon which a rate may be made.
13 (ii) Any subclassification developed under subparagraph (i)
14 shall be filed with the rating organization and the commissioner
15 thirty days prior to its use.
16 (iii) If the insurer fails to demonstrate that the data
17 produced under a subclassification can be reported in a manner
18 consistent with the rating organization's uniform statistical
19 plan and classification system, the commissioner shall
20 disapprove the subclassification.
21 (c) Every workers' compensation insurer shall record and
22 report its workers' compensation experience to a rating
23 organization as set forth in the rating organization's uniform
24 statistical plan approved by the commissioner.
25 (d) (1) Subject to the approval of the commissioner, a
26 rating organization shall develop and file rules reasonably
27 related to the recording and reporting of data pursuant to the
28 uniform statistical plan, uniform experience rating plan, and
29 the uniform classification system.
30 (2) Every workers' compensation insurer shall adhere to the
19930S0001B0788 - 62 -
1 approved rules and experience rating plan in writing and
2 reporting its business.
3 (3) An insurer shall not agree with any other insurer or
4 with a rating organization to adhere to rules which are not
5 reasonably related to the recording and reporting of data
6 pursuant to the uniform classification system or the uniform
7 statistical plan.
8 (e) The experience rating plan shall have as a basis:
9 (1) reasonable eligibility standards;
10 (2) adequate incentives for loss prevention;
11 (3) sufficient premium differential so as to encourage
12 safety; and
13 (4) predictive accuracy.
14 (f) (1) The uniform experience rating plan shall be the
15 exclusive means of providing prospective premium adjustment
16 based upon measurement of the loss producing characteristics of
17 an individual insured.
18 (2) An insurer may file a rating plan that provides for
19 retrospective premium adjustments based upon an insured's past
20 experience.
21 Section 708. (a) The commissioner may investigate and
22 determine whether or not rates in this Commonwealth under this
23 article are excessive, inadequate or unfairly discriminatory.
24 (b) In any such investigation and determination the
25 commissioner shall follow the procedures specified in sections
26 709 and 710.
27 Section 709. (a) (1) Except as provided in clause (d), the
28 commissioner shall review each workers' compensation insurance
29 filing made by a rating organization or an insurer as soon as
30 reasonably possible after the filing has been made in order to
19930S0001B0788 - 63 -
1 determine whether it meets the requirements of this article. No
2 filing for the provision for claim payment shall become
3 effective prior to its approval by the commissioner unless the
4 commissioner fails to approve or disapprove the filing within
5 the time period described in clause (b)(1) or any extension of <--
6 that period under clause (b)(2). ONE HUNDRED EIGHTY DAYS OF THE <--
7 DATE OF FILING.
8 (2) Notwithstanding the provisions of paragraph (1), any <--
9 insurer filing A FILING BY AN INSURER for loss adjustment or <--
10 claim management expenses, other operating expenses,
11 assessments, taxes and profits or contingency allowances filed <--
12 with the commissioner with respect to the period after January
13 1, 1994, shall not be subject to the commissioner's PRIOR <--
14 approval unless such insurer's rates are found to be in
15 violation of sections 704 and 711: PROVIDED, THAT THE PRIOR <--
16 APPROVAL OF THE COMMISSIONER SHALL BE REQUIRED FOR THE FIRST
17 SUCH FILING MADE BY THAT INSURER AFTER THE EFFECTIVE DATE OF
18 THIS SECTION.
19 (b) (1) The effective date of each filing under this
20 article shall be the date specified in the filing. The effective
21 date of the filing may not be earlier than thirty days after the
22 date the filing is received by the commissioner or the date of
23 receipt of the information furnished in support of the filing if
24 such supporting information is required by the commissioner.
25 (2) The period during which the filing may not become
26 effective may be extended by the commissioner for an additional
27 period not to exceed thirty days ONE HUNDRED FIFTY DAYS IN THE <--
28 CASE OF A FILING FOR THE PROVISION FOR CLAIM PAYMENT OR THIRTY
29 DAYS IN THE CASE OF ANY OTHER FILING if the commissioner gives
30 written notice within the period described in paragraph (1) to
19930S0001B0788 - 64 -
1 the insurer or rating organization which made the filing that
2 the commissioner needs additional time for the consideration of
3 the filing. No filing shall be made effective for any period
4 prior to the later of the proposed effective date or the
5 expiration of an extension by the commissioner pursuant to this
6 clause.
7 (3) Upon written application by an insurer or rating
8 organization, the commissioner may authorize a filing which the
9 commissioner has reviewed to become effective before the
10 expiration of the period described in paragraph (1).
11 (4) A filing shall be deemed to meet the requirements of
12 this article unless disapproved by the commissioner within the
13 period described in paragraph (1) or any extension thereof.
14 (c) (1) Subject to approval or disapproval under clause
15 (b), a rating organization shall file with the commissioner:
16 (i) On an annual basis, workers' compensation rates and
17 rating plans that are limited to provision for claim payment.
18 (ii) Each workers' compensation policy form to be used by
19 its members.
20 (iii) The uniform classification system.
21 (iv) The uniform experience rating plan and related rules.
22 (v) Any other information that the commissioner requests
23 relevant to the foregoing and is otherwise entitled to receive
24 under this article.
25 (2) Notwithstanding any other provisions of this article,
26 the commissioner may approve or disapprove any filing by a
27 rating organization without determining whether a reasonable
28 degree of competition exists within the market.
29 (d) If each rate in a schedule of workers' compensation
30 rates for specific classifications of risks filed by an insurer
19930S0001B0788 - 65 -
1 is not lower than the provision for claim payment contained in <--
2 the schedule of workers' compensation rates for those
3 classifications filed by a rating organization under clause (c)
4 and approved pursuant to the provisions of this article, then
5 the schedule of rates filed by the insurer shall not be subject
6 to clause (b) but shall become effective for the purposes of
7 section 705.
8 (e) Notwithstanding clause (d), the commissioner may
9 investigate and evaluate all workers' compensation filings to
10 determine whether the filings meet the requirements of this
11 article.
12 (f) Notwithstanding the provisions of section 705, the
13 commissioner may require any insurer or rating organization to
14 comply with the requirements of clause (b) if the commissioner
15 has found pursuant to section 710, that a reasonable degree of
16 competition does not exist within the workers' compensation
17 insurance market.
18 Section 710. (a) If the commissioner finds after a hearing
19 that a rate is not in compliance with section 704 or that a rate
20 had been set in violation of section 713, the commissioner shall
21 order that its use be discontinued for any policy issued or
22 renewed after a date specified in the order and the order may
23 prospectively provide for premium adjustment of any policy then
24 in force. Except as provided in clause (b), the order shall be
25 issued within thirty days after the close of the hearing or
26 within a reasonable time extension as fixed by the commissioner.
27 The order shall expire one year after its effective date unless
28 rescinded earlier by the commissioner.
29 (b) (1) Pending a hearing, the commissioner may order the
30 suspension prospectively of a rate filed by an insurer and
19930S0001B0788 - 66 -
1 reimpose the last previous rate in effect if the commissioner
2 has reasonable cause to believe that:
3 (i) an insurer is in violation of section 704;
4 (ii) unless the order of suspension is issued, certain
5 insureds will suffer irreparable harm;
6 (iii) the hardship insureds will suffer absent the order if <--
7 OF suspension outweighs any hardship the insurer would suffer if <--
8 the order of suspension were to issue; and
9 (iv) the order of suspension will cause no substantial harm
10 to the public.
11 (2) In the event the commissioner suspends a rate under this
12 clause, the commissioner must, unless waived by the insurer,
13 hold a hearing within fifteen working days after issuing the
14 order suspending the rate. In addition, the commissioner must
15 make a determination and issue the order as to whether or not
16 the rate should be disapproved within fifteen working days after
17 the close of the hearing.
18 (c) (1) At any hearing to determine compliance with section
19 704, pursuant to clause (a), the commissioner shall first <--
20 determine MAY CONSIDER whether a reasonable degree of <--
21 competition exists within the market, and shall give a ruling to <--
22 that effect. All insurers operating within such market shall
23 have the burden of establishing that a reasonable degree of
24 competition exists within that market. The commissioner shall
25 consider all relevant factors in determining the competitiveness
26 of the market, including:
27 (i) the number of insurers actively engaged in providing
28 coverage;
29 (ii) market shares;
30 (iii) changes in market shares; and
19930S0001B0788 - 67 -
1 (iv) ease of entry.
2 (2) If the commissioner determines that a reasonable degree
3 of competition does not exist in the market, any insurer
4 designated by the commissioner shall have the burden of
5 justifying its rate in such market.
6 (3) All determinations made by the commissioner shall be on
7 the basis of findings of fact and conclusions of law.
8 (4) If the commissioner disapproves a rate, the disapproval
9 shall take effect not less than fifteen days after his order and
10 the last previous rate in effect for the insurer shall be
11 reimposed for a period of one year unless the commissioner
12 approves a rate under clause (d) or (e).
13 (d) Within one year after the effective date of a
14 disapproval order, no rate adopted to replace one disapproved
15 under such order may be used until it has been filed with the
16 commissioner and not disapproved within thirty days thereafter.
17 (e) Whenever an insurer has no legally effective rates as a
18 result of the commissioner's disapproval of rates, the
19 commissioner shall, on the insurer's request, specify interim
20 rates for the insurer that are high enough to protect the
21 interests of all parties and may order that a specified portion
22 of the premiums be placed in a special reserve established by
23 the insurer. When new rates become legally effective, the
24 commissioner shall order the specially reserved funds or any
25 overcharge, in the interim rates to be distributed appropriately
26 to the insureds or insurer as the case may be, except that
27 refunds to policyholders that are minimal may not be required.
28 Section 711. (a) (1) If the commissioner finds after
29 hearing that competition is not an effective regulator of the
30 rates charged or that a substantial number of companies are
19930S0001B0788 - 68 -
1 competing irresponsibly through the rates charged, or that there
2 are widespread violations of this article, the commissioner may
3 adopt a rule requiring that any subsequent changes in the rates
4 or supplementary rate information FOR LOSS ADJUSTMENT OR CLAIM <--
5 MANAGEMENT EXPENSES, OTHER OPERATING EXPENSES, ASSESSMENTS,
6 TAXES AND PROFITS OR CONTINGENCY ALLOWANCES be filed with the
7 commissioner at least thirty working days before they become
8 effective. THE RATES SO FILED SHALL BECOME EFFECTIVE UNLESS <--
9 DISAPPROVED BY THE COMMISSIONER PRIOR TO THE LATER OF THE
10 PROPOSED EFFECTIVE DATE OR THE END OF THE WAITING PERIOD IF
11 EXTENDED PURSUANT TO PARAGRAPH (2).
12 (2) In the event that the waiting period is imposed pursuant
13 to paragraph (1), the commissioner may extend the waiting period
14 for a period not to exceed thirty additional working days by
15 written notice to the filer before the first thirty-day period
16 expires.
17 (b) In the event that the commissioner has entered an order
18 pursuant to paragraph (1) of clause (a), the commissioner may
19 require the filing of supporting data as the commissioner deems
20 necessary for the proper functioning of the rate monitoring and
21 regulating process. The supporting data shall include:
22 (1) the experience and judgment of the filer, and to the
23 extent the filer wishes or the commissioner requires, the
24 experience and judgment of other insurers or rate service RATING <--
25 organizations;
26 (2) the filer's interpretation of any statistical data
27 relied upon;
28 (3) a description of the actuarial and statistical methods
29 employed in setting the rate; and
30 (4) any other relevant matters required by the commissioner.
19930S0001B0788 - 69 -
1 (c) A rule adopted under this section shall expire not more <--
2 than one year after issue. The commissioner may renew it for an
3 additional one-year period MAY BE REVOKED OR MODIFIED BY THE <--
4 COMMISSIONER after a hearing and appropriate findings under this
5 section.
6 (d) Whenever a filing is not accompanied by the information
7 as the commissioner has required under clause (a), the
8 commissioner may so inform the insurer and the filing shall be
9 deemed to be made when the information is furnished.
10 Section 712. (a) No rating organization shall provide any
11 service relating to the rates of any insurance subject to this
12 article, and no insurer shall utilize the service of such
13 organization for those purposes unless the organization has
14 obtained a license pursuant to this article.
15 (b) No rating organization shall refuse to supply services
16 for which it is licensed in this Commonwealth to any insurer
17 authorized to do business in this Commonwealth and offering to
18 pay the fair and usual compensation for the services.
19 Section 713. (a) As used in this section, the word
20 "insurer" includes two or more affiliated insurers:
21 (1) under common management; or
22 (2) under common controlling ownership or under other common
23 effective legal control and in fact engaged in joint or
24 cooperative underwriting, investment management, marketing,
25 servicing or administration of their business and affairs as
26 insurers.
27 (b) An insurer or rating organization may not:
28 (1) monopolize or attempt to monopolize, or combine or
29 conspire with any other person or persons, or monopolize the
30 business of insurance of any kind, subdivision, or class
19930S0001B0788 - 70 -
1 thereof;
2 (2) agree with any other insurer or rating organization to
3 charge or adhere to any rate, although insurers and rating
4 organizations may continue to exchange statistical information;
5 (3) make any agreement with any other insurer, rating
6 organization or other person to unreasonably restrain trade;
7 (4) make any agreement with any other insurer, rating
8 organization, or other person where the effect of the agreement
9 may be substantially to lessen competition in the business of
10 insurance of any kind, subdivision, or class; or
11 (5) make any agreement with any other insurer or rating
12 organization to refuse to deal with any person in connection
13 with the sale of insurance.
14 (c) An insurer may not acquire or retain any capital stock
15 or assets of, or have any common management with, any other
16 insurer if such acquisition, retention, or common management
17 substantially lessens competition in the business of insurance
18 of any kind, subdivision, or class.
19 (d) A rating organization or member or subscriber thereof
20 may not interfere with the right of any insurer to make its
21 rates independently of that rating organization or to charge
22 rates different from the rates made by that rating organization.
23 (e) Except as required under section 707, a rating
24 organization may not have or adopt any rule or exact any
25 agreement, formulate or engage in any program which would
26 require any member, subscriber or other insurer to:
27 (1) utilize some or all of its services;
28 (2) adhere to its rates, rating plan, rating systems,
29 underwriting rules; or
30 (3) prevent any insurer from acting independently.
19930S0001B0788 - 71 -
1 Section 714. Any rate in violation of section 713 shall be
2 disapproved by the commissioner in accordance with the
3 procedures prescribed in section 710, and each violator shall be
4 subject to the penalties provided in section 720.
5 Section 715. The commissioner may maintain an action to
6 enjoin any violation of section 713.
7 Section 716. Notwithstanding any other provision of this
8 article, upon written application of an insurer stating its
9 reasons therefor, accompanied by the written consent of the
10 insured or prospective insured, filed with and approved by the
11 commissioner, a rate in excess of that provided by a filing
12 otherwise applicable may be used as to any specific risk.
13 Section 717. (a) Each rating organization and every insurer
14 to which this article applies which makes its own rates shall
15 provide within this Commonwealth reasonable means whereby any
16 person aggrieved by the application of its rating system may be
17 heard in person or by the person's authorized representative on
18 the person's written request to review the manner in which such
19 rating system has been applied in connection with the insurance
20 afforded the aggrieved person.
21 (b) If the rating organization or insurer fails to grant or
22 reject the aggrieved person's request within thirty days after
23 it is made, the applicant may proceed in the same manner as if
24 the application had been rejected.
25 (c) Any party affected by the action of that rating
26 organization or insurer on the request may, within thirty days
27 after written notice of that action, make application, in
28 writing, for an appeal to the commissioner, setting forth the
29 basis for the appeal and the grounds to be relied upon by the
30 applicant.
19930S0001B0788 - 72 -
1 (d) The commissioner shall review the application, and if
2 the commissioner finds that the application is made in good
3 faith, and that it sets forth on its face grounds which
4 reasonably justify holding a hearing, the commissioner shall
5 conduct a hearing held on not less than ten days' written notice
6 to the applicant and to the rating organization or insurer. The
7 commissioner, after hearing, shall affirm or reverse the action.
8 Section 718. (a) Cooperation among rating organizations or
9 among rating organizations and insurers in ratemaking or in
10 other matters within the scope of this article is authorized, if
11 the filings resulting from that cooperation are subject to all
12 the provisions of this article which are applicable to filings
13 generally.
14 (b) The commissioner may review these cooperative activities
15 and practices, and if, after hearing, the commissioner finds
16 that any activity or practice is unfair, unreasonable, or
17 otherwise inconsistent with this article, the commissioner may
18 issue a written order specifying in what respects that activity
19 or practice is unfair, unreasonable, or otherwise inconsistent
20 with this article, and requiring the discontinuance of that
21 activity or practice.
22 Section 719. (a) A person or organization may not wilfully
23 withhold information from or knowingly give false or misleading
24 information which will affect the rates or premiums chargeable
25 under this article to:
26 (1) the commissioner; or
27 (2) any rating organization or any insurer.
28 (b) A violation of this section shall subject the one who
29 commits that violation to the penalties provided in section 720,
30 and anyone who violates this section with intent to deceive
19930S0001B0788 - 73 -
1 commits perjury, and is subject to prosecution therefor in a
2 court of competent jurisdiction.
3 Section 720. (a) Any person, organization, or insurer found
4 by the commissioner after notice and hearing to be guilty of a
5 violation of any provision of this article, including a
6 regulation of the commissioner adopted under this article may be
7 ordered to pay a penalty of five hundred dollars ($500) for each
8 violation. Upon finding such violation to be wilful, the
9 commissioner may impose a penalty of not more than one thousand
10 dollars ($1,000) for each such violation in addition to any
11 other penalty provided by law. The commissioner has the right to
12 suspend or revoke or refuse to renew the license of any person,
13 organization, or insurer for violation of any of the provisions
14 of this article.
15 (b) The commissioner may determine when a suspension or
16 revocation of license will become effective, and the suspension
17 or revocation shall remain in effect for the period fixed by the
18 commissioner unless the commissioner modifies or rescinds the
19 suspension or revocation, or until the order upon which the
20 suspension or revocation is based is modified or reversed as the
21 result of an appeal therefrom.
22 (c) A fine may not be imposed nor a license suspended or
23 revoked by the commissioner except upon written order stating
24 the commissioner's findings, made after a hearing held on not
25 less than ten days' written notice to the person, organization,
26 or insurer specifying the alleged violation.
27 Section 721. All decisions and findings of the commissioner
28 under this article shall be subject to judicial review in
29 accordance with 2 Pa.C.S. (relating to administrative law and
30 procedure).
19930S0001B0788 - 74 -
1 Section 722. The commissioner shall report to the General
2 Assembly annually, beginning on December 31, 1993, on the
3 status, operation and procedures for the determination of
4 classification systems as they apply to this article. THE <--
5 COMMISSIONER SHALL HOLD AT LEAST ONE PUBLIC HEARING REGARDING
6 THE REASONABLENESS OF SUCH CLASSIFICATION SYSTEMS PRIOR TO
7 SUBMITTING THE FIRST ANNUAL REPORT TO THE GENERAL ASSEMBLY.
8 ARTICLE VIII.
9 SELF-INSURANCE POOLING
10 Section 801. The following words and phrases when used in
11 this article shall have the meanings given to them in this
12 section unless the context clearly indicates otherwise:
13 "Actuarially appropriate loss reserves" shall mean those
14 reserves needed to pay known claims for compensation and
15 expenses associated therewith and claims for compensation
16 incurred but not reported and expenses associated therewith.
17 "Administrator" means an individual, partnership or
18 corporation engaged by a fund's plan committee to carry out the
19 policies established by the plan committee and to provide day-
20 to-day management of the fund.
21 "Compensation" includes compensation paid under this act or
22 the Occupational Disease Act.
23 "Department" means the Department of Labor and Industry of
24 the Commonwealth.
25 "Employer" means an employer as defined in section 103 of
26 this act or as defined in section 103 of the Occupational
27 Disease Act, where applicable.
28 "Excess insurance" means insurance, purchased from an
29 insurance company appropriately approved or authorized or
30 licensed in this Commonwealth covering losses in excess of an
19930S0001B0788 - 75 -
1 amount established between the group and the insurer up to the
2 limits of coverage set forth in the insurance contract on a
3 specific per occurrence or per accident or annual aggregate
4 basis.
5 "Fund" means a group self-insurance fund organized by
6 employers to pool workers' compensation liabilities and approved
7 by the department under the authority of this act. A fund shall
8 not be deemed to be an insurer or insurance company and shall
9 not be subject to the provisions of the insurance laws and
10 regulations, except as specifically otherwise provided herein.
11 "Homogeneous employer" means employers who have been assigned
12 to the same classification series for at least one year or are
13 engaged in the same or similar types of business, including
14 political subdivisions.
15 "Independent actuary" means a member in good standing of the
16 Casualty Actuarial Society and a member in good standing of the
17 American Academy of Actuaries who has been identified by the
18 Academy as meeting its qualification standards for signing
19 casualty loss reserve opinions. Said actuary must not be an
20 officer, director or employe of the fund or a member of the fund
21 for which he or she is providing reports, certifications or
22 services.
23 "Insolvent fund" means the inability of a fund to pay its
24 outstanding liabilities as they mature, as may be shown either
25 by an excess of its required reserves and other liabilities over
26 its assets or by not having sufficient assets to reinsure all of
27 its outstanding liabilities after paying all accrued claims owed
28 by it.
29 "Permit" means the document issued by the department to a
30 fund which authorizes the fund to operate as a fund under the
19930S0001B0788 - 76 -
1 provisions of this act.
2 "Plan committee" means a committee composed of
3 representatives of each employer participating in a fund.
4 "Political subdivision" means any county, city, borough,
5 incorporated town, township, school district, vocational school
6 district and county institution district, municipal authority or
7 other entity created by a political subdivision pursuant to law.
8 "Security" means surety bonds, cash, negotiable securities of
9 the United States Government or the Commonwealth or other
10 negotiable securities, such as letters of credit, acceptable to
11 the Insurance Department which are posted by the fund to
12 guaranty the payment of compensation.
13 "Surplus" means that amount of moneys found in the trust to
14 be in excess of all fixed costs and incurred losses attributed
15 to the pool net any occurrence or aggregate excess insurance.
16 "Trust" means a written contract signed by the members of the
17 fund which separates the legal and equitable rights to the
18 moneys held by an independent trustee as a fiduciary for the
19 benefit of employes of employers participating in the fund.
20 Section 802. (a) Employers shall be permitted to pool their
21 liabilities under this act and the Occupational Disease Act and
22 their employers' liability through participation in a fund
23 approved by the department.
24 (b) A group of homogeneous employers may be approved by the
25 department to act as a fund if the proposed group:
26 (1) Includes five or more homogeneous employers.
27 (2) Is comprised of at least five members of which each have
28 been employers for at least three each years prior to the filing <--
29 of the group's application.
30 (3) Has been created in good faith for the purpose of
19930S0001B0788 - 77 -
1 becoming a fund.
2 (4) Has, except for political subdivisions, an aggregate net
3 worth of the employers participating calculated according to
4 generally accepted accounting principles which equals or exceeds
5 one million dollars ($1,000,000) or such amount as may be
6 adjusted and promulgated annually by the department and
7 published in the Pennsylvania Bulletin to take effect January 1
8 of each year.
9 (5) Has a combined annual payroll of fund members multiplied
10 by the rate utilized by the State Workmen's Insurance Fund which
11 is equal to or greater than five hundred thousand dollars
12 ($500,000) as adjusted annually by the percentage increase in
13 the Statewide average weekly wage or such amount as may be
14 adjusted and promulgated annually by the department and
15 published in the Pennsylvania Bulletin to take effect January 1
16 of each year.
17 (6) Guarantees benefit levels equal to those required by
18 this act and the Occupational Disease Act.
19 (7) Demonstrates sufficient aggregate financial strength and
20 liquidity to assure that all obligations under this act and the
21 Occupational Disease Act will be met as required by that act and
22 proposes a plan for the prompt payment of such benefits.
23 Information documenting an individual member's financial
24 strength and liquidity shall be presented to the department upon
25 the department's request or with the application as required by
26 the department.
27 (8) Executes a trust agreement under which each member
28 agrees to jointly and severally assume and discharge the
29 liabilities arising under this act and the Occupational Disease
30 Act of each and every party to such agreement.
19930S0001B0788 - 78 -
1 (9) Files with the department the proposed trust agreement.
2 (10) Provides for excess insurance with retention amounts in
3 such amount as the department deems acceptable on a single
4 accident (single occurrence) and aggregate excess basis. The
5 department may waive the requirement for one or both types of
6 excess insurance if convinced that the fund's financial strength
7 is sufficient to assure payment of its obligations under this
8 act and the Occupational Disease Act.
9 (11) Provides security in a form and amount prescribed by
10 the department.
11 (12) Provides letters of intent from prospective fund
12 members and evidence that each prospective member:
13 (i) Has never defaulted on compensation due under this act
14 or the Occupational Disease Act as an individual self-insurer.
15 (ii) Has not been delinquent in payment of or canceled for
16 non-payment of workers' compensation premiums for a period of at
17 least two years prior to application.
18 (iii) Has not been found to have violated section 305 or
19 section 435 of this act or the Occupational Disease Act as an
20 individual self-insurer.
21 (iv) Has not been and is not in default on or owes money
22 assessed under this act or the Occupational Disease Act.
23 (13) Provides that the fund will initiate and maintain a
24 loss prevention and safety program of the nature and extent that
25 would be required of members under the provisions of this act,
26 the Occupational Disease Act or regulations promulgated
27 hereunder.
28 (14) Provides for assessment upon employers participating in
29 the fund to establish and maintain actuarially appropriate loss
30 reserves and a plan for payment of such assessments.
19930S0001B0788 - 79 -
1 (15) Provides proof of competent personnel and ample
2 facilities within its own organization with respect to claims
3 administration, underwriting matters, loss prevention and safety
4 engineering or presents a contract with a reputable service
5 company to provide such assistance.
6 (16) Meets the other criteria established by this act or by
7 the department pursuant to regulations promulgated under this
8 act or the Occupational Disease Act.
9 (c) Each application for approval of a fund shall be
10 accompanied by a nonrefundable fee of one thousand dollars
11 ($1,000), payable to the department which shall be deposited in
12 the Workmen's Compensation Administration Fund.
13 Section 803. (a) (1) The department shall, in accordance
14 with section 802, review, approve or disapprove fund
15 applications under such rules and requirements relating to
16 applications under section 305 of this act and the Occupational
17 Disease Act as may be applicable and such rules and regulations
18 as are specifically adopted with regard to fund applications.
19 (2) During the pendency of the processing of any fund
20 application, the group of employers shall not operate as a fund.
21 (b) Permits shall identify an annual reporting period for
22 the fund as established by the department.
23 Section 804. All permits issued under this article shall
24 remain in effect unless terminated at the request of the fund or
25 revoked by the department.
26 Section 805. (a) If at any time the fund is found to be
27 insolvent, fails to pay any required assessments under this act
28 or the Occupational Disease Act, or fails to comply with any
29 provision of this act or the Occupational Disease Act or with
30 any rules promulgated thereunder, the department may revoke its
19930S0001B0788 - 80 -
1 permit after notice and opportunity for a hearing.
2 (b) In the case of revocation of a permit, the department
3 may require the fund to insure or reinsure all incurred
4 liability with an authorized insurer. All fund members shall
5 immediately obtain coverage required by this act.
6 Section 806. (a) Members of said fund shall pay a minimum
7 of twenty-five per centum of their annual assessment into the
8 fund on or before the inception of the fund. The balance of the
9 annual assessments shall be paid to the fund on a monthly,
10 quarterly or semiannual basis as required by the fund's bylaws
11 and approved by the department.
12 (b) Each member's annual assessment to the fund shall equal
13 such member's annual payroll times the applicable rates utilized
14 by the State Workmen's Insurance Fund minus the premium discount
15 specified in Schedule Y as approved by the commissioner.
16 Dividends may be returned to members in accordance with section
17 809.
18 (c) Nothing contained in this section shall preclude the
19 assessment and payment of supplemental assessments as provided
20 in section 810.
21 Section 807. After the final permit approval date of the
22 fund, prospective new members of the fund shall submit an
23 application for membership to the fund's plan committee or
24 administrator in a form approved by the department. This
25 application shall include an agreement of joint and several
26 liability as required in section 803. The administrator or plan
27 committee may approve the application for membership pursuant to
28 the bylaws of the fund. The application approved by the fund
29 shall be filed with the department. The fund shall retain the
30 authority to reject any applicant.
19930S0001B0788 - 81 -
1 Section 808. (a) Individual members may elect to terminate
2 their participation in a fund or be subject to cancellation by
3 the fund pursuant to the bylaws of the fund for non-payment of
4 premium or other violations. Any member withdrawing from a fund
5 or member terminated by the fund for non-payment of assessments
6 shall remain fully obligated for claims incurred during the
7 period of its membership in accord with fund bylaws, including,
8 but not limited to, amounts owed as annual or supplemental
9 assessments. Notice of termination of any participant shall be
10 filed with the fund. The fund shall attach any such notices of
11 termination to the renewal application filed with the
12 department.
13 (b) The fund shall notify the department immediately if
14 termination of a member causes the fund to fail to meet the
15 requirements of clause (b) of section 802. Within fifteen days
16 of the notice of withdrawal or decision to expel, the fund shall
17 advise the department of its plan to bring the fund into
18 compliance with clause (b) of section 802. If the plan does not
19 bring the fund into compliance with the requirements, the
20 department shall immediately review and revoke its permit.
21 (c) The department shall not grant the request of any fund
22 to terminate its permit unless the fund has insured or reinsured
23 all incurred workers' compensation obligations with an
24 authorized insurer under an agreement filed with and approved in
25 writing by the department. These obligations shall include both
26 known claims and expenses associated therewith and claims
27 incurred but not reported and expenses associated therewith.
28 These same requirements shall apply where the department revokes
29 a permit.
30 Section 809. Any fund may return to its members dividends
19930S0001B0788 - 82 -
1 based upon the recommendation of an independent actuary.
2 Dividends shall not be returned if the payment of such dividends
3 would impair the fund's ability to meet its obligations under
4 this act or the Occupational Disease Act, nor shall dividends be
5 returned prior to the beginning of the thirteenth month
6 following the expiration of the preceding annual reporting
7 period. The initial dividend payment for any annual reporting
8 period shall not exceed thirty per centum of the surplus
9 available for the applicable annual reporting period. The fund
10 may, however, seek annual approval for payment of dividends from
11 the surplus remaining from any annual reporting period which has
12 been completed for at least twenty-five months or longer and may
13 include such dividend payments with initial dividend payments
14 from the subsequent annual reporting period.
15 Section 810. (a) If the assets of a fund are at any time
16 insufficient to enable the fund to discharge its legal
17 liabilities and other obligations and to maintain the
18 actuarially appropriate loss reserves required of it under
19 paragraph (14) of clause (b) of section 802, the fund shall
20 forthwith make up the deficiency or levy an assessment upon the
21 fund members for the amount needed to make up the deficiency.
22 (b) In the event of a deficiency in any annual reporting
23 period, such deficiency shall be made up immediately, either
24 from surplus from a year other than the current year, assessment
25 of the fund members if ordered by the fund or such alternate
26 method as the department may approve or direct.
27 (c) If the fund fails to assess its members or to otherwise
28 make up such deficit within thirty days the department shall
29 order it to do so.
30 (d) If the fund fails to make the required assessment of its
19930S0001B0788 - 83 -
1 members within thirty days after the department orders it to do
2 so, or if the deficiency is not fully made up within sixty days
3 after the date on which such assessment is made or within such
4 longer period of time as may be specified by the department, the
5 fund shall be deemed to be insolvent.
6 (e) The department shall proceed against an insolvent fund
7 in the same manner as the department would proceed against an
8 insurer under Article IX.
9 (f) In addition, in the event of the liquidation or default
10 of a fund, the department may levy an assessment upon the fund
11 members for such an amount as the department determines to be
12 necessary to discharge all liabilities of the fund including the
13 reasonable cost of liquidation and shall deposit such
14 assessments into the Self-insurance Guaranty Fund for
15 distribution and payment by the Guaranty Fund as provided for in
16 Article IX.
17 Section 811. The annual assessment of each fund member shall
18 be based upon the annual payroll of fund members multiplied by
19 the rates as utilized by the State Workmen's Insurance Fund for
20 members minus any premium discounts. A fund may deviate from
21 these rates and establish its own rates with the approval of an
22 independent actuary and the department.
23 Section 812. Each fund shall request classifications for its
24 participants from the bureau or bureaus approved by the
25 commissioner and shall utilize those classifications making
26 assessments based upon rates as utilized by the State Workmen's
27 Insurance Fund for such classification except as provided in
28 section 811. The fund shall pay the appropriate bureau a
29 reasonable charge, approved by the department, for this service.
30 The fund may appeal classifications as provided in the
19930S0001B0788 - 84 -
1 applicable sections of the Insurance Company Law of 1921 for
2 other employers.
3 Section 813. Each fund may invest any surplus moneys not
4 needed for current obligations in United States Government
5 obligations, United States Treasury Notes, investment share
6 accounts in any savings and loan association whose deposits are
7 insured by a Federal agency and certificates of deposit issued
8 by a duly chartered commercial bank. Deposits in savings and
9 loan associations and commercial banks shall be limited to
10 institutions in this Commonwealth and shall not exceed the
11 federally insured amount in any one account. Investments may
12 also be made in any permitted investments of capital or surplus
13 of stock casualty insurance companies set forth in section 602
14 or 603 of the Insurance Company Law of 1921, as may be
15 authorized by regulation approved by the commissioner.
16 Section 814. (a) Funds approved under this article shall
17 purchase excess insurance by reason of any single accident or
18 any single occurrence as provided in section 653 of the
19 Insurance Company Law of 1921 and aggregate excess insurance.
20 The department may waive the requirement for either single
21 accident (single occurrence) or aggregate excess insurance or
22 the requirement for both single accident (single occurrence) and
23 aggregate excess insurance.
24 (b) A policy of insurance by an insurance carrier may
25 include provisions for aggregate excess insurance in addition to
26 the single accident (single occurrence) excess insurance which
27 is authorized under section 653 of the Insurance Company Law of
28 1921.
29 Section 815. (a) A report shall be prepared by each fund
30 for each annual reporting period and shall be filed with the
19930S0001B0788 - 85 -
1 department and made available to each fund member.
2 (b) The information contained in the annual report shall
3 include, for each member of the fund and the fund itself:
4 (1) Summary loss reports.
5 (2) An annual statement of the financial condition of the
6 fund prepared by a certified public accountant and performed in
7 accordance with generally accepted accounting principles.
8 (3) Reports of outstanding liabilities showing the number of
9 claims, amounts paid to date and current reserves as certified
10 by an independent actuary.
11 (4) Such other information as required by regulation of the
12 department as may be applicable to applicants for self-insurance
13 under section 305 of this act and the Occupational Disease Act
14 or regulations in regard to fund applications.
15 (c) The annual report shall be accompanied by a one thousand
16 dollar evaluation fee.
17 (d) The department may, at any time, examine the affairs,
18 transactions, accounts, records and assets of a fund and the
19 fund shall make all such items as are needed for such
20 examination available to the department. The department shall
21 bill the fund for the reasonable costs associated with such
22 examinations.
23 (e) If at any time there is a change in the fund, during an
24 annual reporting period other than as set forth in section 808,
25 that affects the ability of the fund to comply with the
26 requirements of clause (b) of section 802, the fund shall notify
27 the department of the change within thirty days after such
28 change.
29 Section 816. Each fund shall be assessed annually by the
30 department in a like manner and amount as other insurers or
19930S0001B0788 - 86 -
1 self-insurers are now or hereafter assessed under this act and
2 the Occupational Disease Act and shall pay such assessment in
3 accordance with this act and the Occupational Disease Act. All
4 contributions received in accordance with this section shall be
5 deposited into the appropriate fund as required by the
6 applicable provision of law.
7 Section 817. Any group of five homogeneous employers who
8 will provide to the fund an annual volume of premium of at least
9 five hundred thousand dollars ($500,000) may become subscribers
10 as a group to the State Workmen's Insurance Fund for the purpose
11 of insuring therein their liability to those of their employes.
12 Such group shall become legally obligated to pay any employe
13 compensation required by this act because of bodily injury by
14 accident or disease, including death at any time resulting
15 therefrom, sustained by such employe arising out of and in the
16 course of his employment. Such group shall make a written
17 application for subscription for group insurance to the board.
18 Such application shall designate the name of the group
19 subscriber and shall include such information as determined by
20 the board as will allow the board to identify the employers and
21 to adequately assess risks and premiums to be charged to
22 employers to be insured by the fund under the group
23 subscription.
24 Section 818. The department is authorized to promulgate
25 rules and regulations for the administration and enforcement of
26 this article.
27 ARTICLE IX.
28 SELF-INSURANCE GUARANTY FUND
29 Section 901. The following words and phrases when used in
30 this article shall have the meanings given to them in the THIS <--
19930S0001B0788 - 87 -
1 section unless the context clearly indicates otherwise:
2 "Compensation" means benefits paid pursuant to sections 306
3 and 307.
4 "Employer" means a self-insured employer or the employer as
5 defined in this act.
6 "Guaranty Fund" or "fund" means the Self-Insurance Guaranty
7 Fund established in section 902 for injuries and exposures <--
8 occurring on or after July 1, 1992. DEFAULTS WHICH OCCUR ON OR <--
9 AFTER THE EFFECTIVE DATE OF THIS ARTICLE.
10 "Security" means surety bonds, cash, negotiable securities of
11 the United States Government or the Commonwealth or other
12 negotiable securities, such as letter of credit, acceptable to
13 the Insurance Department which are posted by the fund to
14 guaranty the payment of workers' compensation benefits.
15 "Self-insurer" means an employer exempted under section 305
16 or a group self-insurance fund permitted to operate under
17 Article VIII.
18 Section 902. (a) (1) There is hereby established a special
19 fund to be known as the Self-Insurance Guaranty Fund.
20 (2) The fund shall be maintained as two distinct custodial
21 accounts in the State Treasury as separate and distinct accounts
22 subject to the procedures and provisions set forth in this
23 article.
24 (b) The moneys in each custodial account shall consist of
25 security and assessments, as defined in section 907 and interest
26 accumulated thereon.
27 (c) The administrator shall establish and maintain the
28 following two distinct and separate custodial accounts. The
29 moneys and other assets in each account are not to be commingled
30 or used to pay claims from the other account.
19930S0001B0788 - 88 -
1 (1) Custodial account for self-insured employers for the
2 exclusive benefit of claims arising from defaulting individual
3 self-insured employers.
4 (2) Custodial account for self-insurance pooling as defined
5 under section 801 for the exclusive benefit of claims arising
6 from defaulting members of pooling arrangements.
7 (d) The secretary shall be the administrator of the fund and
8 shall have the power to collect, dispense and disperse money
9 from the fund.
10 Section 903. The fund shall be maintained to make payments
11 to any claimant or his dependents upon the default of the self-
12 insurer liable to pay compensation due under this act and the
13 Occupational Disease Act or costs associated therewith and shall
14 be maintained in an amount sufficient to pay such compensation
15 and costs or reasonably anticipated to be needed by virtue of
16 default by self-insurers.
17 Section 904. (a) When a self-insurer fails to pay
18 compensation when due, the department shall determine the
19 reasons for such failure.
20 (b) If the department determines that the failure to pay
21 compensation is due to the self-insurer's financial inability to
22 pay compensation, the department shall notify the self-insurer
23 of same and direct compensation to be paid within fifteen days
24 of such notice.
25 (c) If the self-insurer fails to pay the compensation as
26 directed and within the time set forth in this section, the
27 department shall declare the self-insurer in default.
28 (d) Whenever the department determines that a default has
29 occurred it shall:
30 (1) Investigate the circumstances surrounding the default,
19930S0001B0788 - 89 -
1 the amount of security available and the ability of the self-
2 insured to cure the default.
3 (2) Determine whether the liabilities of the self-insurer
4 for compensation exceed or are less than the security:
5 (i) If the liabilities are less than the security, the
6 department shall demand the custodian of the security utilize
7 the security to cure the default and the department shall
8 monitor the situation to insure that compensation is paid as due
9 under this act or the Occupational Disease Act.
10 (ii) If at any time the liabilities exceed or can reasonably
11 be expected to exceed the security, in the opinion of the
12 department, the department may order payment of the security
13 into the fund's appropriate custodial account, and shall order
14 payment from the Guaranty Fund, as appropriate, to cure the
15 default and insure that compensation is paid as due under this
16 act or the Occupational Disease Act.
17 Section 905. (a) When payments are ordered from the
18 Guaranty Fund's appropriate custodial account, the fund assumes
19 the rights and obligations of the self-insurer under this act or
20 the Occupational Disease Act with regard to the payment of
21 compensation and shall have and may exercise the rights set
22 forth in this section.
23 (b) The Guaranty Fund shall have the right to:
24 (1) Institute and prosecute legal action against any self-
25 insurer and each and every member of a fund, jointly and
26 severally, on behalf of the employes of the self-insured
27 employer or fund members' employes and their dependents to
28 require the payment of compensation and the performance of any
29 other obligations of the self-insurer under this act or the
30 Occupational Disease Act.
19930S0001B0788 - 90 -
1 (2) Appear and represent the Guaranty Fund in any
2 proceedings in bankruptcy involving the self-insurer on whose
3 behalf payments were made, including the ability to appear and
4 move to lift any stay orders affecting payment of compensation.
5 (3) Obtain, in any manner or by the use of any process or
6 procedure, including, but not limited to, the commencement and
7 prosecution of legal action, reimbursement from a self-insurer
8 and its successors, assigns and estate all moneys paid on
9 account of the self-insurer's obligation assumed by the fund,
10 including, but not limited to, reimbursement for all
11 compensation paid as well as reasonable administrative and legal
12 costs associated with such payment.
13 (4) Purchase reinsurance and take any and all other action
14 which effects the purpose of the Guaranty Fund.
15 Section 906. (a) (1) Security or funds from security
16 demanded and paid to the department under section 904 shall be
17 deposited into the Guaranty Fund.
18 (2) These funds and interest thereon shall be segregated in
19 individual custodial accounts within the Guaranty Fund by the
20 custodian and maintained solely for the payment of compensation
21 or costs associated therewith upon order of the department to
22 the employes of the defaulting self-insurer providing the
23 security from the appropriate custodial account.
24 (3) If there are funds from security or interest thereon
25 remaining in the individual account after all outstanding
26 obligations of the insolvent self-insurer have been satisfied
27 and the costs of administration and defense have been paid, such
28 amount as remains shall be returned upon order of the department
29 from the Guaranty Fund individual account to the self-insurer.
30 (b) Assessments made under section 907 and interest thereon
19930S0001B0788 - 91 -
1 shall be deposited into the Guaranty Fund's appropriate
2 custodial account.
3 Section 907. (a) On a date to be determined by the
4 department following the effective date of this article,
5 employers who are self-insurers as of that effective date shall
6 pay an initial assessment of one-half per centum of the
7 compensation paid by each self-insurer in the year preceding the
8 assessment. Self-insurers who, prior to such effective date,
9 were not self-insurers, shall pay an assessment based on one-
10 half per centum of their modified manual premium for the twelve
11 months immediately prior to becoming self-insurers.
12 (b) (1) The department may, in addition to the initial
13 assessment, from time to time, assess each self-insurer a pro
14 rata share of the amounts needed for the fund to carry out the
15 requirements of this article.
16 (2) Such assessments shall be based on the ratio that each
17 private self-insurer's payments of compensation bears to the
18 total compensation paid by all self-insurers in the year
19 preceding the year of assessment.
20 (3) In no event shall a self-insurer be assessed in any one
21 calendar year more than one per centum of the compensation paid
22 by that self-insurer during the previous calendar year.
23 (c) A self-insurer which ceases to be a self-insurer shall
24 be liable for any and all assessments made pursuant to this
25 section during the period following the date its authority to
26 self-insure is withdrawn, revoked or surrendered until such time
27 as it has discharged all obligations to pay compensation which
28 arose during the period of time said former self-insurer was
29 self-insured. Assessments of such a former self-insurer shall be
30 based on the compensation paid by the former self-insurer during
19930S0001B0788 - 92 -
1 the preceding calendar year on claims that arose during the
2 period of time said former self-insurer was self-insured.
3 Section 908. The department may promulgate rules and
4 regulations for the administration and enforcement of this
5 article.
6 ARTICLE X.
7 HEALTH AND SAFETY
8 Section 1001. (a) Notwithstanding any other provision of
9 law, an insurer desiring to write workers' compensation
10 insurance in this Commonwealth shall maintain or provide
11 accident prevention services as a prerequisite for a license to
12 write such insurance. Proof of compliance with this section
13 shall be provided to the commissioner. Such services shall be
14 adequate to furnish accident prevention required by the nature
15 of its business or its policyholders' operations and shall
16 include surveys, recommendations, training programs,
17 consultations, analyses of accident causes, industrial hygiene
18 and industrial health services to implement the program of
19 accident prevention services. The insurer, pursuant to its
20 responsibilities under this section, shall employ or otherwise
21 make available qualified accident and illness prevention
22 personnel. Such personnel shall meet the qualifications set
23 forth in regulations issued by the department.
24 (b) A self-insured employer shall maintain an accident and
25 illness prevention program as a prerequisite for retention of
26 its self-insured status. Such program shall be adequate to
27 furnish accident prevention required by the nature of its
28 business and shall include surveys, recommendations, training
29 programs, consultations, analyses of accident causes, industrial
30 hygiene and industrial health services. The self-insured
19930S0001B0788 - 93 -
1 employer pursuant to its responsibilities under this section,
2 shall employ or otherwise make available qualified accident and
3 illness prevention personnel. Such personnel shall meet the
4 qualifications set forth in regulations issued by the
5 department.
6 (c) The department may conduct inspections to determine the
7 adequacy of the accident prevention services required by this
8 section at least once every two years for each insurer.
9 (d) Notice that services required by this section are
10 available to the employer from an insurer must appear in no less
11 than ten-point bold type and must accompany each workers'
12 compensation insurance policy delivered or issued for delivery
13 in this Commonwealth.
14 (e) At least once each year each insurer must submit to the
15 department detailed information on the type of accident
16 prevention services offered or provided to the insurer's
17 policyholders. The information must include:
18 (1) The amount of money spent by the insurer on accident
19 prevention services.
20 (2) The number and qualifications of field safety
21 representatives employed by the insurer.
22 (3) The number of site inspections performed.
23 (4) Any accident prevention services for which the insurer
24 contracts.
25 (5) A breakdown of the premium size of the risks to which
26 the insurer provided services.
27 (6) Evidence of the effectiveness of and accomplishments in
28 accident prevention.
29 (f) Failure to maintain or provide the accident prevention
30 services required by this section shall constitute a continuing
19930S0001B0788 - 94 -
1 civil violation subject to a maximum fine of two thousand
2 dollars ($2,000) per day for each day the accident prevention
3 services are not maintained or provided. Each day of
4 noncompliance with this section is a separate violation. All
5 fines recovered under this section shall be paid to the
6 department and deposited by the department into the Health and
7 Safety Account of the Workmen's Compensation Administration Fund
8 created by section 446 of this act.
9 (g) An insurer and its agents, servants and employes shall <--
10 not be liable on any civil cause of action or proceeding arising
11 out of, or based upon, allegations and pleadings relating to
12 compliance with the provisions of this article: Provided,
13 however, That this immunity shall not affect the liability of
14 the employer or insurer for compensation as otherwise provided
15 in this act.
16 (G) THE INSURER, THE AGENT, SERVANT OR EMPLOYE OF THE <--
17 INSURER AND THE PAST AND PRESENT EMPLOYER AND EMPLOYE MEMBERS OF
18 THE SAFETY COMMITTEE ESTABLISHED UNDER SECTION 1002 AND ANY
19 COLLECTIVE BARGAINING REPRESENTATIVE SHALL NOT BE LIABLE ON ANY
20 CAUSE OF ACTION OR IN ANY PROCEEDING, CIVIL OR CRIMINAL, ARISING
21 OUT OF OR BASED UPON ALLEGATIONS AND PLEADINGS RELATING TO THE
22 PERFORMANCE OF SERVICES UNDER OR IN COMPLIANCE WITH THIS
23 ARTICLE. THIS IMMUNITY SHALL NOT, HOWEVER, AFFECT THE LIABILITY
24 OF THE EMPLOYER OR THE INSURER FOR COMPENSATION AS OTHERWISE
25 PROVIDED IN THIS ACT. THE RECOMMENDATIONS, FINDINGS AND MINUTES
26 OF A SAFETY COMMITTEE SHALL NOT BE ADMISSIBLE EVIDENCE IN ANY
27 CIVIL ACTION FILED ON BEHALF OF AN EMPLOYE AGAINST A THIRD PARTY
28 REGARDING ANY INJURY INCURRED IN THE COURSE AND SCOPE OF
29 EMPLOYMENT.
30 Section 1002. (a) An insured employer may make application
19930S0001B0788 - 95 -
1 to the department for the certification of any established
2 safety committee operative within its workplace, developed for
3 the purpose of hazard detection and accident prevention. The
4 department shall develop such certification criteria.
5 (b) Upon the renewal of the employer's workers' compensation
6 policy next following receipt of department certification, the
7 employer shall receive a five per centum discount in the rate or
8 rates applicable to the policy for a period of one year.
9 ARTICLE XI.
10 INSURANCE FRAUD
11 Section 1101. The following words and phrases when used in
12 this article shall have the meanings given to them in this
13 section unless the context clearly indicates otherwise:
14 "Attorney" means an individual admitted by the Pennsylvania
15 Supreme Court to practice law in this Commonwealth.
16 "Health care professional" means a person licensed or
17 certified pursuant to law to perform health care activities.
18 "Insurance claim" means a claim for payment or other benefits
19 pursuant to an insurance policy or agreement for coverage of <--
20 health or hospital services. FOR WORKERS' COMPENSATION. <--
21 "Insurance policy" means a document setting forth the terms
22 and conditions of a contract of insurance or agreement for the <--
23 coverage of health or hospital services. WORKERS' COMPENSATION. <--
24 "Insurer" means a company, association or exchange defined by
25 section 101 of the Insurance Company Law of 1921; an
26 unincorporated association of underwriting members; a hospital
27 plan corporation; a professional health services plan
28 corporation; a health maintenance organization; a fraternal
29 benefit society; and a self-insured health care entity under the
30 act of October 15, 1975 (P.L.390, No.111), known as the "Health
19930S0001B0788 - 96 -
1 Care Services Malpractice Act."
2 "Person" means an individual, corporation, partnership,
3 association, joint-stock company, trust or unincorporated
4 organization. The term includes any individual, corporation,
5 association, partnership, reciprocal exchange, interinsurer,
6 Lloyd's insurer, fraternal benefit society, beneficial
7 association and any other legal entity engaged or proposing to
8 become engaged, either directly or indirectly, in the business
9 of insurance, including agents, brokers, adjusters and health
10 care plans as defined in 40 Pa.C.S. Chs. 61 (relating to
11 hospital plan corporations), 63 (relating to professional health
12 services plan corporations), 65 (relating to fraternal benefit
13 societies) and 67 (relating to beneficial societies) and the act
14 of December 29, 1972 (P.L.1701, No.364), known as the "Health
15 Maintenance Organization Act." For purposes of this article,
16 health care plans, fraternal benefit societies and beneficial
17 societies shall be deemed to be engaged in the business of
18 insurance.
19 "Statement" means any oral or written presentation or other
20 evidence of loss, injury or expense, including, but not limited
21 to, any notice, statement, proof of loss, bill of lading,
22 receipt for payment, invoice, account, estimate of property
23 damages, bill for services, diagnosis, prescription, hospital or
24 doctor records, X-ray, test result or computer-generated
25 documents.
26 Section 1102. A person commits an offense if the person does
27 any of the following:
28 (1) Knowingly and with the intent to defraud a State or
29 local government agency files, presents or causes to be filed
30 with or presented to the government agency a document that
19930S0001B0788 - 97 -
1 contains false, incomplete or misleading information concerning
2 any fact or thing material to the agency's determination in
3 approving or disapproving a workers' compensation insurance rate
4 filing, a workers' compensation transaction or other workers'
5 compensation insurance action which is required or filed in
6 response to an agency's request.
7 (2) Knowingly and with the intent to defraud any insurer,
8 presents or causes to be presented to any insurer any statement
9 forming a part of, or in support of, a workers' compensation
10 insurance claim that contains any false, incomplete or
11 misleading information concerning any fact or thing material to
12 the workers' compensation insurance claim.
13 (3) Knowingly and with the intent to defraud any insurer,
14 assists, abets, solicits or conspires with another to prepare or
15 make any statement that is intended to be presented to any
16 insurer in connection with, or in support of, a workers'
17 compensation insurance claim that contains any false, incomplete
18 or misleading information concerning any fact or thing material
19 to the workers' compensation insurance claim.
20 (4) Engages in unlicensed agent or broker activity as
21 defined by the act of May 17, 1921 (P.L.789, No.285), known as
22 "The Insurance Department Act of one thousand nine hundred and
23 twenty-one," knowingly and with the intent to defraud an insurer
24 or the public.
25 (5) Knowingly benefits, directly or indirectly, from the
26 proceeds derived from a violation of this section due to the
27 assistance, conspiracy or urging of any person.
28 (6) Is the owner, administrator or employe of any health
29 care facility and knowingly allows the use of such facility by
30 any person in furtherance of a scheme or conspiracy to violate
19930S0001B0788 - 98 -
1 any of the provisions of this article SECTION. <--
2 (7) Knowingly AND WITH THE INTENT TO DEFRAUD assists, abets, <--
3 solicits or conspires with any person who engages in an unlawful
4 act under this section.
5 (8) Makes or causes to be made any knowingly false or
6 fraudulent statement with regard to entitlement to benefits with
7 the intent to discourage an injured worker from claiming
8 benefits or pursuing a claim.
9 (9) KNOWINGLY AND WITH THE INTENT TO DEFRAUD MAKES ANY FALSE <--
10 STATEMENT FOR THE PURPOSE OF AVOIDING OR DIMINISHING THE AMOUNT
11 OF THE PAYMENT IN PREMIUMS TO AN INSURER OR SELF-INSURANCE FUND.
12 Section 1103. (a) A lawyer may not compensate or give
13 anything of value to a nonlawyer to recommend or secure
14 employment by a client or as a reward for having made a
15 recommendation resulting in employment by a client; except that
16 the lawyer may pay:
17 (1) the reasonable cost of advertising or written
18 communication as permitted by the rules of professional conduct;
19 or
20 (2) the usual charges of a not-for-profit lawyer referral
21 service or other legal service organization.
22 Upon a conviction of an offense under this clause, the
23 prosecutor shall certify the conviction to the disciplinary
24 board of the Supreme Court for appropriate action, including
25 suspension or disbarment.
26 (b) With respect to an A WORKERS' COMPENSATION insurance <--
27 benefit or claim, a health care provider may not compensate or
28 give anything of value to a person to recommend or secure the
29 provider's service to or employment by a patient or as a reward
30 for having made a recommendation resulting in the provider's
19930S0001B0788 - 99 -
1 service to or employment by a patient; except that the provider
2 may pay the reasonable cost of advertising or written
3 communication as permitted by rules of professional conduct.
4 Upon a conviction of an offense under this clause, the
5 prosecutor shall certify the conviction to the appropriate
6 licensing board in the Department of State which shall suspend
7 or revoke the health care provider's license.
8 (c) A lawyer or health care provider may not compensate or
9 give anything of value to a person for providing names,
10 addresses, telephone numbers or other identifying information of
11 individuals seeking or receiving medical or rehabilitative care
12 for accident, sickness or disease, except to the extent a
13 referral and receipt of compensation is permitted under
14 applicable professional rules of conduct. A person may not
15 knowingly transmit such referral information to a lawyer or
16 health care professional for the purpose of receiving
17 compensation or anything of value. Attempts to circumvent this
18 clause through use of any other person, including, but not
19 limited to, employes, agents or servants, shall also be
20 prohibited.
21 Section 1104. If an insurance claim is made by means of
22 computer billing tapes or other electronic means, it shall be a
23 rebuttable presumption that the person knowingly made the claim
24 if the person has advised the insurer in writing that claims
25 will be submitted by use of computer billing tapes or other
26 electronic means.
27 Section 1105. (a) A person who violates section 1102 shall
28 be guilty of a felony of the third degree., and, upon conviction <--
29 thereof, shall be sentenced to pay a fine of not more than fifty
19930S0001B0788 - 100 -
1 thousand dollars or double the value of the fraud, or to undergo
2 imprisonment for a period of not more than seven years, or both.
3 (b) A person who violates section 1103 shall be guilty of a
4 misdemeanor of the first degree., and, upon conviction thereof, <--
5 shall be sentenced to pay a fine of not more than twenty
6 thousand dollars ($20,000) or double the amount of the fraud, or
7 both.
8 (c) A health care professional PROVIDER or lawyer who is <--
9 guilty of an offense under section 1102 while acting on behalf
10 of others shall be subject to disciplinary action, including
11 suspension or revocation of a license or certificate or
12 recommendation for disbarment to the Supreme Court. SUSPENSION <--
13 OR DISBARMENT, ON THE SAME BASIS AS A HEALTH CARE PROVIDER OR
14 LAWYER WHO IS GUILTY OF AN OFFENSE UNDER SECTION 1102.
15 Section 1106. The court may, in addition to any other
16 sentence authorized by law, sentence a person convicted of
17 violating this section to make restitution under 18 Pa.C.S §
18 1106 (relating to restitution for injuries to person or
19 property).
20 Section 1107. An insurer and any agent, servant or employe
21 thereof acting in the course and scope of his employment, and <--
22 the division, acting pursuant to section 1207, shall be immune
23 from civil or criminal liability arising from the supply or
24 release of written or oral information to any entity duly
25 authorized to receive such information by Federal or State law,
26 or by Insurance Department regulations, only if the information
27 is supplied to the agency in connection with an allegation of
28 fraudulent conduct on the part of any person relating to a
29 violation of this article AND THE INSURER, AGENT, SERVANT OR <--
30 EMPLOYE HAS REASON TO BELIEVE THAT THE INFORMATION SUPPLIED IS
19930S0001B0788 - 101 -
1 RELATED TO THE ALLEGATION OF FRAUD.
2 Section 1108. Nothing in this article shall be construed to
3 prohibit any conduct by an attorney or law firm which is
4 expressly permitted by the Rules of Professional Conduct of the
5 Supreme Court, by statute or by regulation, or prohibit any
6 conduct by a health care professional PROVIDER which is <--
7 expressly permitted by law or regulation.
8 Section 1109. (a) The district attorneys of the several
9 counties shall have authority to investigate and to institute
10 criminal proceedings for any violation of this article.
11 (b) In addition to the authority conferred upon the Attorney
12 General by the act of October 15, 1980 (P.L.950, No.164), known
13 as the "Commonwealth Attorneys Act," the Attorney General shall
14 have the authority to investigate and to institute criminal
15 proceedings for any violation of this section or any series of
16 such violations involving more than one county of this
17 Commonwealth or involving any county of this Commonwealth and
18 another state. No person charged with a violation of this
19 article by the Attorney General shall have standing to challenge
20 the authority of the Attorney General to investigate or
21 prosecute the case, and, if any such challenge is made, the
22 challenge shall be dismissed and no relief shall be available in
23 the courts of the Commonwealth to the person making the
24 challenge.
25 Section 1110. Nothing contained in this article shall be
26 construed to limit the regulatory or investigative authority of
27 any department or agency of the Commonwealth whose functions
28 might relate to persons, enterprises or matters falling within
29 the scope of this article.
30 ARTICLE XII. <--
19930S0001B0788 - 102 -
1 FRAUD ENFORCEMENT
2 Section 1201. The following words and phrases when used in
3 this article shall have the meanings given to them in this
4 section unless the context clearly indicates otherwise:
5 "Department" means the Insurance Department of the
6 Commonwealth.
7 "Division" means the Workers' Compensation Fraud Enforcement
8 Division established in section 1202.
9 Section 1202. (a) There is established within the
10 department a Workers' Compensation Fraud Enforcement Division to
11 enforce the provisions of Article XI and to administer the
12 provisions of this article.
13 (b) If, by its own inquiries or as a result of complaints,
14 the division has reason to believe that a person has engaged in
15 or is engaging in an act or practice that violates Article XI,
16 the division may make those investigations within or outside
17 this Commonwealth that it deems necessary to determine whether
18 any person has violated or is about to violate any provision of
19 Article XI, or to aid in the enforcement of this article.
20 (c) For the purposes of an investigation under this article,
21 the commissioner or any officer designated by the commissioner
22 may administer oaths and affirmations, subpoena witnesses,
23 compel their attendance, take evidence and require the
24 production of any books, papers, correspondence, memoranda,
25 agreements or other documents or records which the commissioner
26 deems relevant or material to the inquiry.
27 (d) If any matter which the division seeks to obtain by
28 request is located outside this Commonwealth, the person so
29 requested may make it available to the division or its
30 representative to be examined at the place where it is located.
19930S0001B0788 - 103 -
1 The division may designate representatives, including officials
2 of the state in which the matter is located, to inspect the
3 matter on its behalf, and the division may respond to similar
4 requests from officials of other states.
5 (e) Except as provided in clause (f), the department's
6 papers, documents, reports or evidence relative to the subject
7 of investigation under this section shall not be subject to
8 public inspection for as long a period as the commissioner deems
9 reasonably necessary to complete the investigation, to protect
10 the person investigated from unwarranted injury or to serve the
11 public interest. Such papers, documents, reports or evidence
12 shall not be subject to subpoena or subpoena duces tecum until
13 opened for public inspection by the commissioner and a hearing,
14 unless the commissioner otherwise consents or, after notice to
15 the commissioner and a hearing, the Commonwealth Court
16 determines that the public interest and any ongoing
17 investigation by the commissioner would not be unnecessarily
18 jeopardized by compliance with the subpoena duces tecum.
19 (f) The division shall furnish all papers, documents,
20 reports, complaints or other facts or evidence to any police,
21 sheriff or other law enforcement agency or governmental entity
22 duly authorized to receive such information, when so requested,
23 and shall assist and cooperate with those agencies.
24 (g) The commissioner shall ensure that the division
25 aggressively pursues all reported incidents of probable workers'
26 compensation fraud, as defined in Article XI, and forward to the
27 appropriate disciplinary body the names, along with all
28 supporting evidence, of individuals licensed under the laws of
29 this Commonwealth suspected of actively engaging in fraudulent
30 activity. The division shall report to the commissioner any
19930S0001B0788 - 104 -
1 insurer suspected of actively engaging in the fraudulent denial
2 of claims.
3 Section 1203. (a) To fund the investigation and prosecution
4 of workers' compensation fraud there shall be an annual
5 assessment, payable in each fiscal year in which the assessment
6 is made, on insurers and self-insurers under this act. The
7 commissioner shall make the assessment and collect moneys based
8 on the ratio that such insurer's or self-insurer's payments of
9 compensation bear to the total compensation paid in the
10 preceding calendar year in which the assessment is made. The
11 assessment shall be made in accordance with the following
12 provisions:
13 (1) The aggregate amount of the assessment shall be
14 determined by the commissioner or his designees, pursuant to
15 paragraphs (3), (4) and (5).
16 (2) The amount collected, together with the fines collected
17 for violations of the unlawful acts enumerated in Article XI
18 shall be deposited in the Workers' Compensation Fraud
19 Enforcement Account, which is hereby created as a restricted
20 account, separate and apart from all other public moneys or
21 funds of the Commonwealth, for use in carrying out the
22 provisions of this act.
23 (3) Any funds not expended in the fiscal year for which they
24 have been assessed shall be applied to satisfy, for the
25 immediately following fiscal year, the minimum total amount
26 required by paragraph (4) and thereby reduce the annual
27 assessment by the commissioner.
28 (4) For the 1993-1994 fiscal year the total amount of
29 revenue derived from the annual assessment pursuant to this
30 clause shall, together with the total funds collected pursuant
19930S0001B0788 - 105 -
1 to fines imposed for unlawful acts enumerated in Article XI, not
2 be less than two million dollars and not more than three million
3 dollars.
4 (5) In subsequent fiscal years the total revenue derived
5 from the assessments shall not increase by a greater percentage
6 than the annual percentage increase in the Consumer Price Index
7 for all Urban Wage Earners during the prior calendar year, as
8 certified by the commissioner as of June 30 of the fiscal year
9 in which the new assessment is to be made.
10 (6) After incidental expenses, sixty per centum of the funds
11 to be used for the purposes of this section shall be provided to
12 the division for investigative work, and forty per centum of the
13 funds shall be distributed to district attorneys, pursuant to a
14 determination by the commissioner as to the most effective
15 distribution of moneys for purposes of the investigation and
16 prosecution of workers' compensation insurance fraud cases. The
17 commissioner shall consider population and historical incident
18 of insurance fraud when awarding money to district attorneys.
19 (b) Each district attorney desiring a portion of the funds
20 shall submit to the division a plan detailing his projected use
21 of any moneys which may be provided. The plan shall include a
22 detailed accounting of assessed funds received and expended in
23 prior years, including at a minimum:
24 (1) the amount of funds received and expended;
25 (2) the uses to which those funds were put, including
26 payment of salaries and expenses, purchase of equipment and
27 supplies and other expenditures by type;
28 (3) result achieved as a consequence of expenditures made,
29 including the number of investigations, arrests, indictments,
30 convictions and the amounts originally claimed in cases
19930S0001B0788 - 106 -
1 prosecuted compared to payment actually made in those cases; and
2 (4) other relevant information which the division may
3 reasonably require. The plan shall be submitted within ninety
4 days of the deadline established by the division.
5 (c) Any district attorney receiving funds under this section
6 shall submit an annual report to the division regarding the
7 success of their efforts.
8 (d) Documents required under this section shall be public
9 records.
10 Section 1204. The commissioner shall annually compile and
11 report to the General Assembly on or before March 1 the
12 following information for the previous fiscal year:
13 (1) The number of cases reported to the division.
14 (2) The number of cases rejected for which an investigation
15 was not initiated by the division due to insufficient evidence
16 to proceed, and the number of reported cases rejected for which
17 an investigation was not initiated by the division due to any
18 other reason.
19 (3) The number of cases that were prosecuted in cooperation
20 with Commonwealth licensing agencies.
21 (4) The number of cases prosecuted using funds received
22 under Article XI.
23 (5) An estimate of the economic value of insurance fraud by
24 type of insurance fraud.
25 (6) Recommendations on ways insurance fraud may be reduced.
26 (7) A summary of the division's activities aimed at reducing
27 fraud in conjunction with other law enforcement agencies.
28 (8) A summary of the division's activities with respect to
29 the reduction of fraudulent denials and payment of compensation.
30 Section 1205. (a) Each insurer licensed to write workers'
19930S0001B0788 - 107 -
1 compensation insurance in this Commonwealth shall institute and
2 maintain a workers' compensation antifraud plan. The antifraud
3 plan of insurers licensed on or after the effective date of this
4 act shall be filed with the department on or before one hundred
5 twenty days after the enactment of this act. All changes to the
6 antifraud plan shall be filed with the department within thirty
7 days after it has been modified.
8 (b) The antifraud plan of each insurer shall establish
9 specific procedures:
10 (1) To prevent insurance fraud, including internal fraud
11 involving employes or company representatives, fraud resulting
12 from misrepresentation on applications for insurance coverage
13 and claims fraud.
14 (2) To review claims in order to detect evidence of possible
15 insurance fraud and to investigate claims where fraud is
16 suspected.
17 (3) To report fraud to appropriate law enforcement agencies
18 and to cooperate with such agencies in their prosecution of
19 fraud cases.
20 (4) To undertake civil actions against persons who have
21 engaged in fraudulent activities.
22 (5) To report fraud-related data to the division.
23 (6) To ensure that costs incurred as a result of detecting
24 insurance fraud are not included in any rate base affecting the
25 premium rates as provided in section 1206.
26 (c) Antifraud plans shall be filed with the department. If,
27 after review, the commissioner finds that the antifraud plan
28 does not comply with subsection (b), the antifraud plan may be
29 disapproved. Notice of disapproval shall include a statement of
30 the specific reasons for such disapproval. Any plan disapproved
19930S0001B0788 - 108 -
1 by the commissioner must be refiled within sixty days of the
2 date of the notice of disapproval. The commissioner may audit
3 insurers to ensure compliance with antifraud plans.
4 (d) All insurers shall annually provide to the department a
5 summary report on actions taken under the plan to prevent and
6 combat insurance fraud, including, but not limited to, measures
7 taken to protect and ensure the integrity of electronic data-
8 processing-generated data and manually compiled data,
9 statistical data on the amount of resources committed to
10 combating fraud and the amount of fraud identified and recovered
11 during the reporting period.
12 (e) Insurers that fail to file timely antifraud plans as
13 required by subsections (a) and (c) are subject to the penalty
14 provisions of section 320 of the Insurance Company Law of 1921.
15 Insurers that do not make a good faith attempt to file an
16 antifraud plan which complies with subsection (b) shall also be
17 subject to the penalty provisions of section 320 of the
18 Insurance Company Law of 1921: Provided, That no penalty may be
19 imposed for the first filing made by an insurer under this
20 article. Insurers that fail to follow the antifraud plan shall
21 be subject to a civil penalty for each violation, not to exceed
22 ten thousand dollars ($10,000) at the discretion of the
23 commissioner after consideration of all relevant factors,
24 including the wilfulness of any violation.
25 (f) No later than one hundred twenty days after enactment of
26 this act, all applications for workers' compensation insurance,
27 renewals and claims forms shall contain a statement that clearly
28 states in substance the following:
29 "Any person who knowingly and with intent to injure or
30 defraud any insurer, files an application or claim
19930S0001B0788 - 109 -
1 containing any false, incomplete or misleading
2 information shall, upon conviction, be guilty of a felony
3 of the third degree and subject to pay a fine of not more
4 than fifty thousand dollars ($50,000) or double the value
5 of the fraud, or to undergo imprisonment for a period of
6 not more than seven years, or both."
7 Section 1206. Any insurer licensed to write workers'
8 compensation insurance in this Commonwealth shall ensure that
9 costs associated with detecting insurance fraud are not included
10 in any rate base effecting premium rates and not increase
11 premium rates to recover costs associated with the compliance of
12 Articles XI and this article.
13 Section 1207. (a) The division shall maintain and operate a
14 depository data base containing concluded and current fraudulent
15 claims investigations. The data contained shall be limited to
16 information which the commissioner determines is necessary for
17 the aggressive and effective investigation and monitoring of
18 workers' compensation insurance fraud claims.
19 (b) Upon written request to an insurer by an authorized
20 governmental agency, an insurer or agent authorized by the
21 insurer to act on its behalf shall release to the division all
22 relevant information deemed important to the division by the
23 commissioner relating to any specific workers' compensation
24 fraud investigation.
25 (c) (1) When an insurer knows or reasonably knows the
26 identity of a person who it has reason to believe committed a
27 fraudulent act relating to a workers' compensation insurance
28 claim or has knowledge of a fraudulent act which is reasonably
29 believed not to have been reported to an authorized agency, the
30 insurer or its agent shall notify the local district attorney
19930S0001B0788 - 110 -
1 and the division. The insurer shall state in its notice the
2 basis of its knowledge or reasonable belief.
3 (2) (i) If, by its own inquiries or as a result of
4 complaints or as a result of notification by an insurer, the
5 division reasonably knows the identity of a person who it has
6 reason to believe committed a fraudulent act relating to a
7 workers' compensation insurance claim, written notification
8 shall be provided to all such persons no later than sixty days
9 from the time the division reasonably knew the identity of the
10 person believed to have committed a fraudulent act.
11 (ii) This notification shall include the basis of knowledge
12 or reasonable belief.
13 (iii) The division shall provide all persons who are
14 implicated in the notice with an opportunity to present
15 exculpatory evidence.
16 (iv) Such requirement shall be applicable to all law
17 enforcement agencies, including, but not limited to, district
18 attorneys.
19 (d) An insurer providing information to an authorized
20 governmental agency pursuant to this section shall provide the
21 information within a reasonable time, but no later than thirty
22 days after the date on which the duty to report arose.
23 (e) (1) Any information acquired pursuant to this article
24 shall not be part of the public record. Except as otherwise
25 provided by law, any authorized governmental agency, insurer or
26 agent which receives any information furnished pursuant to this
27 article shall not release that information to any person not
28 authorized to receive the information under this article. A
29 person who violates this clause is guilty of a misdemeanor of
30 the third degree.
19930S0001B0788 - 111 -
1 (2) The evidence or information described in this section
2 shall be privileged and shall not be subject to subpoena or
3 subpoena duces tecum in a civil or criminal proceeding, unless,
4 after reasonable notice to any insurer, an agent or authorized
5 governmental agency which has an interest in the information,
6 and a hearing, the court determines that the public interest and
7 any ongoing investigation by the authorized governmental agency,
8 insurer or agent, will not be jeopardized by its disclosure or
9 by the issuance of and compliance with a subpoena or subpoena
10 duces tecum.
11 (3) No insurer, or agent authorized by an insurer to act on
12 its behalf, who furnishes information, written or oral, pursuant
13 to this article, and no authorized governmental agency or its
14 employes who furnish or receive information, written or oral,
15 pursuant to this article or assists in any investigation of a
16 suspected violation of Article XI conducted by an authorized
17 governmental agency shall be subject to any civil liability in a
18 cause or action of any kind where the insurer, authorized agent
19 or authorized governmental agency acts in good faith, without
20 malice, and reasonably believes that the action taken was
21 warranted by the then-known facts, obtained by reasonable
22 efforts. Nothing in this article is intended to, nor does in any
23 way or manner, abrogate or lessen the existing common law or
24 statutory privileges and immunities of an insurer or agent
25 authorized by the insurer to act on its behalf, or any
26 authorized governmental agency or its employes.
27 (4) The department shall provide access for the Majority
28 Chairmen and the Minority Chairmen of the Appropriations
29 Committee and the Banking and Insurance Committee of the Senate
30 and the Majority Chairmen and the Minority Chairmen of the
19930S0001B0788 - 112 -
1 Appropriations Committee and the Insurance Committee of the
2 House of Representatives to the depository data base for
3 purposes consistent with this article.
4 SECTION 1111. ALL FINES AND PENALTIES IMPOSED FOLLOWING A <--
5 CONVICTION FOR A VIOLATION OF THIS ARTICLE SHALL BE COLLECTED IN
6 THE MANNER PROVIDED BY LAW AND SHALL BE PAID IN THE FOLLOWING
7 MANNER:
8 (1) IF THE PROSECUTOR IS A DISTRICT ATTORNEY, THE FINES AND
9 PENALTIES SHALL BE PAID INTO THE OPERATING FUND OF THE COUNTY IN
10 WHICH THE DISTRICT ATTORNEY IS ELECTED.
11 (2) IF THE PROSECUTOR IS THE ATTORNEY GENERAL, THE FINES AND
12 PENALTIES SHALL BE PAID INTO THE STATE TREASURY.
13 ARTICLE XII.
14 FRAUD ENFORCEMENT
15 SECTION 1201. THE FOLLOWING WORDS AND PHRASES WHEN USED IN
16 THIS ARTICLE SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS
17 SECTION UNLESS THE CONTEXT CLEARLY INDICATES OTHERWISE:
18 "ANTIFRAUD PLAN" MEANS THE INSURANCE ANTIFRAUD PLAN REQUIRED
19 TO BE FILED AND MAINTAINED PURSUANT TO THIS ARTICLE.
20 "COMMISSIONER" MEANS THE INSURANCE COMMISSIONER OF THE
21 COMMONWEALTH.
22 "DEPARTMENT" MEANS THE INSURANCE DEPARTMENT OF THE
23 COMMONWEALTH.
24 SECTION 1202. (A) THE DEPARTMENT IS AUTHORIZED TO REFER TO
25 THE APPROPRIATE LAW ENFORCEMENT OFFICIAL VIOLATIONS OF ARTICLE
26 XI IF THE DEPARTMENT HAS REASON TO BELIEVE THAT A PERSON HAS
27 ENGAGED IN OR IS ENGAGING IN AN ACT OR PRACTICE THAT VIOLATES
28 ARTICLE XI.
29 (B) THE DEPARTMENT SHALL FURNISH ALL PAPERS, DOCUMENTS,
30 REPORTS, COMPLAINTS OR OTHER FACTS OR EVIDENCE TO ANY POLICE,
19930S0001B0788 - 113 -
1 SHERIFF OR OTHER LAW ENFORCEMENT AGENCY OR GOVERNMENTAL ENTITY
2 DULY AUTHORIZED TO RECEIVE SUCH INFORMATION, WHEN SO REQUESTED,
3 AND SHALL ASSIST AND COOPERATE WITH THOSE AGENCIES.
4 SECTION 1203. A WORKERS' COMPENSATION INSURER SHALL
5 INSTITUTE AND MAINTAIN AN INSURANCE ANTIFRAUD PLAN.
6 SECTION 1204. ALL WORKERS' COMPENSATION INSURERS SHALL
7 ANNUALLY PROVIDE TO THE DEPARTMENT A SUMMARY REPORT ON ACTIONS
8 TAKEN UNDER AN ANTIFRAUD PLAN TO PREVENT AND COMBAT INSURANCE
9 FRAUD, INCLUDING, BUT NOT LIMITED TO, MEASURES TAKEN TO PROTECT
10 AND ENSURE THE INTEGRITY OF ELECTRONIC DATA PROCESSING-GENERATED
11 DATA AND MANUALLY COMPILED DATA, STATISTICAL DATA ON THE AMOUNT
12 OF RESOURCES COMMITTED TO COMBATING FRAUD AND THE AMOUNT OF
13 FRAUD IDENTIFIED AND RECOVERED DURING THE REPORTING PERIOD.
14 SECTION 1205. (A) EVERY WORKERS' COMPENSATION INSURER, AND
15 ITS EMPLOYES, AGENTS AND BROKERS, ARE AUTHORIZED TO REFER TO THE
16 APPROPRIATE LAW ENFORCEMENT OFFICIAL VIOLATIONS OF ARTICLE XI IF
17 THE INSURER, EMPLOYE, AGENT OR BROKER HAS REASON TO BELIEVE THAT
18 A PERSON HAS ENGAGED IN OR IS ENGAGING IN AN ACT OR PRACTICE
19 THAT VIOLATES ARTICLE XI.
20 (B) THE INSURER, ITS EMPLOYES, AGENTS AND BROKERS, SHALL
21 FURNISH ALL PAPERS, DOCUMENTS, REPORTS, COMPLAINTS OR OTHER
22 FACTS OR EVIDENCE TO ANY POLICE, SHERIFF OR OTHER LAW
23 ENFORCEMENT AGENCY OR GOVERNMENTAL ENTITY DULY AUTHORIZED TO
24 RECEIVE SUCH INFORMATION, WHEN SO REQUESTED, AND SHALL ASSIST
25 AND COOPERATE WITH THOSE AGENCIES.
26 ARTICLE XIII.
27 BUSINESS-LABOR ADVOCATE
28 SECTION 1301. AS USED IN THIS ARTICLE:
29 "DEPARTMENT" MEANS THE INSURANCE DEPARTMENT OF THE
30 COMMONWEALTH.
19930S0001B0788 - 114 -
1 SECTION 1302. (A) THERE IS HEREBY ESTABLISHED WITHIN THE
2 DEPARTMENT OF LABOR AND INDUSTRY, THE OFFICE OF BUSINESS-LABOR
3 ADVOCATE TO REPRESENT THE INTEREST OF EMPLOYERS AND EMPLOYES AS
4 A PARTY IN PROCEEDINGS BEFORE THE DEPARTMENT OR ANY COURT
5 INVOLVING FILINGS BY RATING ORGANIZATIONS AND INSURERS PURSUANT
6 TO ARTICLE VII OF THIS ACT. THE OFFICE SHALL BE SUPERVISED BY
7 THE BUSINESS-LABOR ADVOCATE.
8 (B) THE BUSINESS-LABOR ADVOCATE SHALL BE APPOINTED BY THE
9 GOVERNOR, WITH THE ADVICE AND CONSENT OF A MAJORITY OF THE
10 MEMBERS ELECTED TO THE SENATE, AND SHALL BE A PERSON WHO IS
11 QUALIFIED BY REASON OF TRAINING, EXPERIENCE AND ATTAINMENT.
12 (C) ANY INDIVIDUAL WHO IS APPOINTED TO THE POSITION OF
13 BUSINESS-LABOR ADVOCATE SHALL NOT SEEK ELECTION NOR ACCEPT
14 APPOINTMENT TO ANY PUBLIC OFFICE DURING HIS TENURE AS BUSINESS-
15 LABOR ADVOCATE AND FOR A PERIOD OF TWO YEARS AFTER HIS
16 APPOINTMENT IS SERVED OR TERMINATED.
17 (D) THE SECRETARY OF LABOR AND INDUSTRY SHALL HAVE
18 ADMINISTRATIVE RESPONSIBILITIES FOR THE OFFICE ONLY AND SHALL
19 NOT BE RESPONSIBLE, IN ANY MANNER, FOR THE POLICIES, PROCEDURES
20 OR OTHER SUBSTANTIVE MATTERS DEVELOPED BY THE OFFICE OF
21 BUSINESS-LABOR ADVOCATE IN CARRYING OUT ITS DUTIES UNDER THIS
22 ACT.
23 SECTION 1303. THE BUSINESS-LABOR ADVOCATE, WITH THE APPROVAL
24 OF THE SECRETARY OF LABOR AND INDUSTRY, SHALL APPOINT ATTORNEYS
25 AS ASSISTANT BUSINESS-LABOR ADVOCATES AND SUCH ADDITIONAL
26 CLERICAL, TECHNICAL AND PROFESSIONAL STAFF AS MAY BE APPROPRIATE
27 AND MAY CONTRACT FOR SUCH ADDITIONAL SERVICES AS SHALL BE
28 NECESSARY FOR THE PERFORMANCE OF HIS FUNCTION. THE COMPENSATION
29 OF THE BUSINESS-LABOR ADVOCATE, ASSISTANT BUSINESS-LABOR
30 ADVOCATES AND SUCH CLERICAL, TECHNICAL AND PROFESSIONAL STAFF
19930S0001B0788 - 115 -
1 SHALL BE SET BY THE EXECUTIVE BOARD. NEITHER THE BUSINESS-LABOR
2 ADVOCATE NOR ANY ASSISTANT BUSINESS-LABOR ADVOCATE OR OTHER
3 STAFF EMPLOYE SHALL, WHILE SERVING IN SUCH POSITION, ENGAGE IN
4 ANY BUSINESS, VOCATION OR OTHER EMPLOYMENT OR HAVE OTHER
5 INTERESTS, INCONSISTENT WITH HIS OFFICIAL RESPONSIBILITIES.
6 SECTION 1304. (A) THE BUSINESS-LABOR ADVOCATE MAY EXERCISE
7 DISCRETION IN DETERMINING THE INTEREST OF EMPLOYERS AND EMPLOYES
8 WHICH WILL BE ADVOCATED IN ANY PARTICULAR PROCEEDING AND, IN SO
9 DETERMINING, SHALL CONSIDER THE PUBLIC INTEREST, THE RESOURCES
10 AVAILABLE AND THE SUBSTANTIALITY OF THE EFFECT OF THE PROCEEDING
11 ON THEIR INTEREST. THE BUSINESS-LABOR ADVOCATE MAY REFRAIN FROM
12 INTERVENING WHEN IN HIS JUDGMENT SUCH IS NOT NECESSARY TO
13 REPRESENT ADEQUATELY THEIR INTEREST.
14 (B) ANY ACTION BROUGHT BY THE BUSINESS-LABOR ADVOCATE BEFORE
15 THE DEPARTMENT OR A COURT SHALL BE BROUGHT IN THE NAME OF THE
16 BUSINESS-LABOR ADVOCATE. AT SUCH TIME AS THE BUSINESS-LABOR
17 ADVOCATE DETERMINES, IN ACCORDANCE WITH APPLICABLE TIME
18 LIMITATIONS, TO INITIATE, INTERVENE, OR OTHERWISE PARTICIPATE IN
19 A PROCEEDING, HE SHALL ISSUE PUBLICLY A WRITTEN STATEMENT, A
20 COPY OF WHICH HE SHALL FILE IN THE PROCEEDING IN ADDITION TO ANY
21 REQUIRED ENTRY OF HIS APPEARANCE, STATING CONCISELY THE SPECIFIC
22 INTEREST OF EMPLOYERS AND EMPLOYES TO BE PROTECTED.
23 SECTION 1305. THE DEPARTMENT SHALL NOTIFY, OR REQUIRE THE
24 RATING ORGANIZATION OR INSURER TO NOTIFY, THE BUSINESS-LABOR
25 ADVOCATE OF ANY FILING PURSUANT TO ARTICLE VII OF THIS ACT IN A
26 MANNER TO ASSURE THE BUSINESS-LABOR ADVOCATE REASONABLE NOTICE
27 AND ADEQUATE TIME TO DETERMINE WHETHER TO INTERVENE IN THE
28 RELEVANT PROCEEDING.
29 SECTION 1306. THE BUSINESS-LABOR ADVOCATE SHALL TRANSMIT TO
30 THE GOVERNOR, THE SECRETARY OF LABOR AND INDUSTRY AND THE
19930S0001B0788 - 116 -
1 GENERAL ASSEMBLY, AND SHALL MAKE AVAILABLE TO THE PUBLIC, AN
2 ANNUAL REPORT ON THE CONDUCT OF THE OFFICE OF BUSINESS-LABOR
3 ADVOCATE.
4 SECTION 1307. IN ADDITION TO ANY OTHER ASSESSMENT AUTHORIZED
5 BY SECTION 446, AN ADDITIONAL ANNUAL ASSESSMENT SHALL BE MADE ON
6 INSURERS AS A PERCENTAGE OF THE TOTAL COMPENSATION PAID, FOR THE
7 PURPOSE OF FUNDING THE OPERATIONS OF THE OFFICE OF BUSINESS-
8 LABOR ADVOCATE. ASSESSMENTS UNDER THIS SECTION SHALL BE MADE BY
9 THE DEPARTMENT AND DEPOSITED INTO THE WORKMEN'S COMPENSATION
10 ADMINISTRATION FUND IN A RESTRICTED ACCOUNT TO BE USED BY THE
11 OFFICE OF BUSINESS-LABOR ADVOCATE. THE TOTAL AMOUNT ASSESSED
12 SHALL BE THE AMOUNT OF THE BUDGET APPROVED ANNUALLY BY THE
13 GENERAL ASSEMBLY FOR THE OFFICE OF BUSINESS-LABOR ADVOCATE.
14 SECTION 1308. NOTHING CONTAINED IN THIS ARTICLE SHALL IN ANY
15 WAY LIMIT THE RIGHT OF ANY PERSON TO BRING A PROCEEDING BEFORE
16 EITHER THE DEPARTMENT OR A COURT.
17 SECTION 21. NO LATER THAN DECEMBER 31, 1993, THE SECRETARY
18 OF LABOR AND INDUSTRY SHALL SUBMIT TO THE GENERAL ASSEMBLY AN
19 ANALYSIS OF THE AVERAGE WORKLOAD PER WORKERS' COMPENSATION JUDGE
20 AND A PLAN TO REDUCE THE DELAYS IN DECIDING WORKERS'
21 COMPENSATION PETITIONS, INCLUDING ANY NECESSARY INCREASES IN THE
22 NUMBER OF JUDGES AND SUPPORTING STAFF.
23 Section 22. Notwithstanding any other provision of law to
24 the contrary, regulations promulgated under the authority of
25 section 306(f.1)(3)(ii) of the act, as amended by this act,
26 shall not be subject to the provisions of the act of October 15,
27 1980 (P.L.950, No.164), known as the Commonwealth Attorneys Act,
28 or the act of June 25, 1982 (P.L.633, No.181), known as the
29 Regulatory Review Act.
30 Section 22.1 23. The Commonwealth, its political <--
19930S0001B0788 - 117 -
1 subdivisions, their officials and employees acting within the
2 scope of their duties shall enjoy and benefit from sovereign and
3 official immunity from claims of subrogation or reimbursement
4 from a claimant's tort recovery with respect to workers'
5 compensation benefits.
6 Section 23. (a) In order to provide an efficient <--
7 implementation of this act and to assure fair and equitable
8 treatment of insureds and insurers, the order and adjudication
9 issued by the commissioner, dated after the effective date of
10 this act, In re Workers' Compensation Rate Revision Proposal C-
11 330 (Docket No. R91-09-21) and pending, is set aside as being in
12 conflict with this act.
13 (b) The commissioner shall issue a revised order, based upon
14 the data provided in the rate filing for the order which is set
15 aside under subsection (a) and the record relating to that
16 filing, approving manual rates to be applicable to all new and
17 renewal policies. In this revised determination of rates, the
18 commissioner shall make an adjustment to reflect the savings
19 estimated to be produced by the limitations on payments to
20 health care providers and by the other changes included in this
21 act and shall give due consideration to the extension of trend
22 factors for an additional year and the change in the Statewide
23 average weekly wage as of January 1, 1993.
24 (c) Any insured that received an increase in premium cost as
25 a result of the order and adjudication set aside under
26 subsection (a) shall receive a pro rata discount on future
27 policy renewals based on the relative difference between the
28 revised rates issued under subsection (b) and the rate which was
29 imposed as a result of the order and adjudication set aside
30 under subsection (a).
19930S0001B0788 - 118 -
1 Section 24. For purposes of the initial filing only,
2 notwithstanding any other provisions of this act, the following
3 provision shall apply:
4 (1) Each rating organization shall file, within 60 days
5 of the effective date of this act, a loss cost filing
6 pursuant to section 709(c) of Article VII of the act for new
7 and renewal policies for workers' compensation insurance.
8 Such filing shall be subject to approval or disapproval by
9 the commissioner pursuant to Article VII of the act, but such
10 approval or disapproval shall be made not later than 30
11 calendar days after first receipt of the loss cost filing.
12 (2) In the absence of an order approving or disapproving
13 the loss cost filing within 30 calendar days of its first
14 receipt, the filing shall be deemed to meet all the
15 requirements of this act.
16 (3) No later than 30 days from the date of the actual or
17 deemed approval of the above loss cost filing, each
18 individual insurer shall file for the commissioner's approval
19 or disapproval provisions for loss adjustment, expenses,
20 assessments, taxes and profit and contingency allowances. The
21 effective date of such filings shall be the date specified in
22 the filing.
23 (4) On or before March 1, 1993, the commissioner shall
24 publish an aggregate factor for loss adjustment expenses,
25 assessments, taxes, profits and contingency allowances which
26 insurers may use in the foregoing initial filings. Any
27 insurer filing which uses an aggregate factor not in excess
28 of the foregoing factor shall be deemed approved upon filing
29 for purposes of this section.
30 (5) The commissioner shall publish different aggregate
19930S0001B0788 - 119 -
1 factors for policies sold through independent agents and for
2 policies sold directly to insurers.
3 SECTION 24. (A) BY ADJUDICATION AND ORDER ISSUED OCTOBER <--
4 21, 1992, THE INSURANCE COMMISSIONER APPROVED A 24.26% RATE
5 INCREASE FOR WORKERS' COMPENSATION INSURANCE POLICIES MADE
6 EFFECTIVE ON AND AFTER DECEMBER 1,1992. SINCE DECEMBER 1, 1992,
7 INSURERS HAVE BEEN ISSUING AND RENEWING WORKERS' COMPENSATION
8 INSURANCE POLICIES USING THE 24.26% RATE INCREASE APPROVED BY
9 THE INSURANCE COMMISSIONER. THE RATE INCREASE APPROVED BY THE
10 INSURANCE COMMISSIONER WAS BASED UPON FINDINGS SHE MADE APPLYING
11 PROVISIONS OF THE ACT OF JUNE 2, 1915 (P.L.736, NO.338), KNOWN
12 AS THE PENNSYLVANIA WORKMEN'S COMPENSATION ACT, AND THE ACT OF
13 MAY 17, 1921 (P.L.682, NO.284), KNOWN AS THE INSURANCE COMPANY
14 LAW OF 1921, THEN IN FORCE TO THE FACTUAL RECORD PRESENTED TO
15 HER AND WAS NECESSARILY BASED UPON AN ASSUMPTION THAT THE
16 PROVISIONS OF THE PENNSYLVANIA WORKMEN'S COMPENSATION ACT, THEN
17 IN FORCE WOULD REMAIN SUBSTANTIALLY UNCHANGED DURING THE
18 EFFECTIVENESS OF THE RATE WHICH SHE APPROVED.
19 (B) THE GENERAL ASSEMBLY HEREBY FINDS THAT THE REFORMS OF
20 THIS ACT REDUCE THE COSTS TO INSURERS OF PROVIDING WORKERS'
21 COMPENSATION INSURANCE TO PENNSYLVANIA'S EMPLOYERS SUBSTANTIALLY
22 BELOW THE COSTS WHICH WOULD HAVE BEEN INCURRED ABSENT THESE
23 REFORMS. THE GENERAL ASSEMBLY FINDS FURTHER THAT WITHOUT AN
24 IMMEDIATE REDUCTION IN INSURANCE PREMIUM RATES, INSURERS WOULD
25 ATTAIN A WINDFALL OF PROFITS, EMPLOYERS WOULD BE SUBJECTED TO
26 EXCESSIVE WORKERS' COMPENSATION INSURANCE PREMIUMS, AND THE
27 ECONOMY OF THIS COMMONWEALTH WOULD BE NEEDLESSLY BURDENED. IN
28 ADDITION, THE GENERAL ASSEMBLY FINDS THAT REGARDING THOSE
29 EMPLOYERS TO WHOM INSURANCE POLICIES WERE ISSUED OR FOR WHOM
30 INSURANCE POLICIES WERE RENEWED SINCE DECEMBER 1, 1992, FAIRNESS
19930S0001B0788 - 120 -
1 AND EQUITY REQUIRE THAT THOSE INSUREDS RECEIVE SAVINGS UNDER
2 THIS ACT COMMENSURATE WITH THE BALANCE OF TIME REMAINING BEFORE
3 THE EXPIRATION OF THEIR POLICY PERIODS.
4 (C) IN ORDER TO PROVIDE FOR AN EFFICIENT IMPLEMENTATION OF
5 THIS ACT, TO ASSURE FAIR AND EQUITABLE TREATMENT OF INSURERS AND
6 INSUREDS, AND TO EFFECT AN OVERALL REASONABLE ACCOMMODATION OF
7 THE RESPECTIVE RIGHTS, RESPONSIBILITIES AND INTERESTS OF
8 INSURERS, INSUREDS AND THE PUBLIC, ANY RATE FILING PENDING
9 BEFORE THE INSURANCE COMMISSIONER OR APPROVED BY THE
10 COMMISSIONER BUT NOT YET EFFECTIVE IS HEREBY DISAPPROVED AS
11 BEING IN CONFLICT WITH THIS ACT.
12 (D) FOR THE SAME PURPOSES STATED IN SUBSECTION (C), THE
13 GENERAL ASSEMBLY ENACTS THE FOLLOWING INTERIM RATES AND
14 SCHEDULES:
15 (1) FOR ALL WORKERS' COMPENSATION INSURANCE POLICIES
16 ISSUED OR RENEWED WITH A POLICY PERIOD EFFECTIVE ON OR AFTER
17 THE EFFECTIVE DATE OF ARTICLE VII OF THE ACT, INSURERS SHALL
18 CHARGE THE RATES WHICH WERE IN EFFECT PRIOR TO DECEMBER 1,
19 1992, SUBJECT TO ADJUSTMENT BY THE COMMISSIONER PURSUANT TO
20 PARAGRAPH (2).
21 (2) WITHIN 60 DAYS OF THE EFFECTIVE DATE OF ARTICLE VII
22 OF THE ACT, THE COMMISSIONER SHALL ISSUE AN ORDER APPROVING
23 MANUAL RATES TO BE APPLICABLE, FOR THE ENTIRE POLICY PERIOD,
24 TO ALL NEW AND RENEWAL POLICIES OF WORKERS' COMPENSATION
25 INSURANCE WITH A POLICY PERIOD COMMENCING ON OR AFTER THE
26 EFFECTIVE DATE OF ARTICLE VII, AND TO BE APPLICABLE ON A PRO
27 RATA BASIS TO POLICIES WITH POLICY PERIOD EFFECTIVE DATES
28 BETWEEN DECEMBER 1, 1992, AND THE EFFECTIVE DATE OF ARTICLE
29 VII OF THE ACT. IN THE DETERMINATION OF RATES PROVIDED IN
30 THIS PARAGRAPH, THE COMMISSIONER SHALL GIVE DUE CONSIDERATION
19930S0001B0788 - 121 -
1 TO THE CHANGES MADE BY THIS ACT AND SUCH OTHER FACTORS AS THE
2 COMMISSIONER MIGHT DEEM RELEVANT.
3 (3) WITHIN 60 DAYS AFTER THE DATE OF THE COMMISSIONER'S
4 ORDER, INSURERS SHALL ISSUE ADJUSTED PREMIUM NOTICES AND, IF
5 APPROPRIATE, MAKE REFUNDS OR AFFORD CREDITS TO INSUREDS
6 CONSISTENT WITH THE DETERMINATION OF THE COMMISSIONER.
7 Section 25. (a) The following act and parts of acts are
8 repealed, to the extent specified:
9 Section 654 of the act of May 17, 1921 (P.L.682, No.284),
10 known as The Insurance Company Law of 1921, except with regard
11 to insurance as to liability under the Longshore and Harbor
12 Workers' Compensation Act (44 Stat. 1424, 23 U.S.C. § 901 et
13 seq.).
14 75 Pa.C.S. §§ 1735 and 1737, absolutely.
15 (b) The provisions of 75 Pa.C.S. §§ 1720 and 1722 are
16 repealed insofar as they relate to workers' compensation
17 payments or other benefits under the Workers' Compensation Act.
18 (c) All other acts and parts of acts are repealed insofar as
19 they are inconsistent with this act.
20 Section 26. This act shall take effect as follows: <--
21 (1) Articles VIII and IX of the act shall take effect in
22 120 days.
23 (2) Article VII of the act shall take effect
24 immediately.
25 (3) Section 25(a) of this act shall take effect January
26 1, 1993.
27 (4) Section 23 of this act and this section shall take
28 effect immediately.
29 (5) The remainder of this act shall take effect in 60
30 days.
19930S0001B0788 - 122 -
1 SECTION 26. THIS ACT SHALL TAKE EFFECT AS FOLLOWS: <--
2 (1) THE ADDITION OF SECTION 324 OF THE ACT SHALL TAKE
3 EFFECT JULY 1, 1994.
4 (2) THE ADDITION OF ARTICLE VII OF THE ACT SHALL TAKE
5 EFFECT IMMEDIATELY.
6 (3) THE ADDITION OF ARTICLES VIII AND IX OF THE ACT
7 SHALL TAKE EFFECT IN 120 DAYS.
8 (4) SECTIONS 24 AND 25(A) OF THIS ACT SHALL TAKE EFFECT
9 IMMEDIATELY.
10 (5) THE REMAINDER OF THIS ACT SHALL TAKE EFFECT IN 60
11 DAYS.
L22L77JLW/19930S0001B0788 - 123 -