PRIOR PRINTER'S NO. 1120 PRINTER'S NO. 1240
No. 1014 Session of 1993
INTRODUCED BY SCANLON, HOLL, WILLIAMS, AFFLERBACH, LAVALLE,
STAPLETON, O'PAKE, JONES, MUSTO, FATTAH, HELFRICK, SHUMAKER,
SALVATORE AND FISHER, APRIL 27, 1993
SENATOR SCANLON, BANKING AND INSURANCE, AS AMENDED, MAY 11, 1993
AN ACT
1 Amending the act of May 17, 1921 (P.L.789, No.285), entitled, as
2 amended, "An act relating to insurance; establishing an
3 insurance department; and amending, revising, and
4 consolidating the law relating to the licensing,
5 qualification, regulation, examination, suspension, and
6 dissolution of insurance companies, Lloyds associations,
7 reciprocal and inter-insurance exchanges, and certain
8 societies and orders, the examination and regulation of fire
9 insurance rating bureaus, and the licensing and regulation of
10 insurance agents and brokers; the service of legal process
11 upon foreign insurance companies, associations or exchanges;
12 providing penalties, and repealing existing laws,"
13 authorizing the licensing of lending institutions and bank
14 holding companies to sell credit unemployment insurance.
15 The General Assembly of the Commonwealth of Pennsylvania
16 hereby enacts as follows:
17 Section 1. Section 641 of the act of May 17, 1921 (P.L.789,
18 No.285), known as The Insurance Department Act of 1921, added
19 December 30, 1974 (P.L.1148, No.365), is amended to read:
20 Section 641. Lending Institutions, Public Utilities and
21 Holding Companies Not to be Licensed.--(a) As used in this
22 section:
23 (1) "Lending institution" means any institution that accepts
1 deposits and lends money in the Commonwealth of Pennsylvania,
2 including banks and savings and loan associations, but excluding
3 insurance companies.
4 (2) "Public utility" means a private employer subject to the
5 jurisdiction of the Pennsylvania Public Utility Commission and
6 engaged in the business of rendering electric, gas, water and
7 steam heat services to the public in this Commonwealth:
8 Provided, however, That the term "public utility" shall not
9 include rural electrification cooperatives.
10 (3) The terms "subsidiary" and "affiliate" shall be defined
11 in the regulations promulgated by the Insurance Commissioner,
12 except that "affiliate" shall not apply to an entity which owns
13 an interest in another company or corporation where the
14 ownership interest is not sufficient to permit exercise of
15 effective control, and does not involve direct or indirect
16 ownership or control of five per centum or more of the voting
17 stock of such company or corporation. Nor shall it apply to an
18 entity whose stock is owned by another, provided that the amount
19 of stock owned by any one company or corporation does not permit
20 effective control and does not exceed five per centum of the
21 voting stock of the entity. The term "affiliate" shall, subject
22 to the provisions to invest in stock contained in this
23 subsection, include bank holding company, savings and loan
24 holding company, and public utility holding company as
25 hereinafter defined.
26 (4) "Bank holding company" shall mean and include the
27 definition of such term in section two of an act of Congress
28 entitled the "Bank Holding Company Act of 1956," as amended:
29 Provided, however, That if on or before the effective date of
30 this act, a bank holding company has been granted an exemption
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1 by the Board of Governors of the Federal Reserve System pursuant
2 to section 4(d) of the Bank Holding Company Act of 1956, as
3 amended, such bank holding company shall not be held to be a
4 bank holding company within the meaning of section 2 of the Bank
5 Holding Company Act of 1956, as amended.
6 (5) "Credit life, health, and accident insurance" means
7 insurance on the life and health of a borrower from a lending
8 institution to secure the repayment of the amount borrowed, in
9 accordance with regulations promulgated by the Insurance
10 Commissioner.
11 (5.1) "Credit unemployment insurance" means insurance on a
12 debtor to provide indemnity for payments becoming due on a
13 specific loan or other credit transaction while the debtor is
14 unemployed as defined in the policy.
15 (6) "Title insurance" shall mean and include the definition
16 of such term in section seven hundred and one of the act of May
17 17, 1921 (P.L.682, No.284), known as "The Insurance Company Law
18 of 1921."
19 (7) A "savings and loan holding company" shall mean and
20 include the definition of such term as defined in Title 12,
21 United States Code, sections 1730a (a) (1) (D) (E) (F).
22 (8) "Public utility holding company" shall mean and include
23 the definition of such term as defined in Title 15, United
24 States Code, sections 79b (a) (7), including electric, gas,
25 water and steam heat services.
26 (9) "Deposits" shall mean and include the definition of such
27 term as set forth in Title 12, United States Code, section 1813
28 (l), (1), (2), (3), (4), (5).
29 (b) No lending institution, public utility, bank holding
30 company, savings and loan holding company or any subsidiary or
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1 affiliate of the foregoing, or officer or employe thereof, may,
2 directly or indirectly, be licensed or admitted as an insurer or
3 be licensed to sell insurance in this State either as a broker
4 or as an agent except that a lending institution or bank holding
5 company, subsidiary or affiliate of a lending institution may be
6 licensed to sell credit life, health and accident insurance and
7 credit unemployment insurance, AS REGULATED UNDER THE ACT OF <--
8 SEPTEMBER 2, 1961 (P.L.1232, NO.540), KNOWN AS THE "MODEL ACT
9 FOR THE REGULATION OF CREDIT LIFE INSURANCE AND CREDIT ACCIDENT
10 AND HEALTH INSURANCE," and to sell and underwrite title
11 insurance in accordance with regulations promulgated by the
12 Insurance Commissioner.
13 (c) The Insurance Commissioner is authorized to promulgate
14 regulations in order to effectuate the purposes of this section,
15 which are to help maintain the separation between lending
16 institutions and public utilities and the insurance business and
17 to minimize the possibilities of unfair competitive practices by
18 lending institutions and public utilities against insurance
19 companies, agents and brokers.
20 Section 2. This act shall take effect in 60 days.
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