PRINTER'S NO. 564
No. 510 Session of 2007
INTRODUCED BY COHEN, CALTAGIRONE, FREEMAN, BLACKWELL, CURRY,
FABRIZIO, GEORGE, JOSEPHS, MAHONEY, McGEEHAN, OLIVER,
PALLONE, PETRONE, PRESTON, PYLE, SABATINA, SHIMKUS, STABACK,
STURLA, WATERS, YOUNGBLOOD, KIRKLAND AND HORNAMAN,
FEBRUARY 26, 2007
REFERRED TO COMMITTEE ON INSURANCE, FEBRUARY 26, 2007
AN ACT
1 Amending the act of July 22, 1974 (P.L.589, No.205), entitled
2 "An act relating to unfair insurance practices; prohibiting
3 unfair methods of competition and unfair or deceptive acts
4 and practices; and prescribing remedies and penalties,"
5 further providing for definitions, for unfair acts and for
6 exclusions.
7 The General Assembly of the Commonwealth of Pennsylvania
8 hereby enacts as follows:
9 Section 1. Section 3 of the act of July 22, 1974 (P.L.589,
10 No.205), known as the Unfair Insurance Practices Act, amended
11 April 4, 1996 (P.L.100, No.24) and July 7, 2006 (P.L.363,
12 No.78), is amended to read:
13 Section 3. Definitions.--As used in this act:
14 "Abuse" has the meaning given in 23 Pa.C.S. § 6102(a)
15 (relating to definitions), notwithstanding the limited
16 applicability provision in paragraph (5) of the definition of
17 "abuse" in 23 Pa.C.S. § 6102(a). The term also means attempting
18 to cause or intentionally, knowingly or recklessly causing
1 damage to property so as to intimidate or attempt to control the
2 behavior of another person covered under 23 Pa.C.S. Ch. 61
3 (relating to protection from abuse).
4 "Commissioner" means the Insurance Commissioner of the
5 Commonwealth of Pennsylvania.
6 "Family or household members" has the meaning given in 23
7 Pa.C.S. § 6102(a) (relating to definitions).
8 "Insurance policy" or "insurance contract" means any contract
9 of insurance, indemnity, health care, suretyship, title
10 insurance, or annuity issued, proposed for issuance or intended
11 for issuance by any person.
12 "Person" means:
13 (1) any individual, corporation, association, partnership,
14 reciprocal exchange, inter-insurer, Lloyds insurer, fraternal
15 benefit society, beneficial association, agent, broker, adjuster
16 and any other legal entity engaged in the business of
17 insurance[, including agents, brokers and adjusters and also
18 means health care plans as defined in 40 Pa.S. Ch.61 relating to
19 hospital plan corporations, 40 Pa.S. Ch.63 relating to
20 professional health services plan corporations, 40 Pa.S. Ch.65
21 relating to fraternal and beneficial societies, 40 Pa.S. Ch.67
22 relating to beneficial societies and the act of December 29,
23 1972 (P.L.1701, No.364), known as the "Voluntary Nonprofit
24 Health Service Act of 1972."];
25 (2) a health care plan as defined in 40 Pa.C.S. Ch. 61
26 (relating to hospital plan corporations), 40 Pa.C.S. Ch. 63
27 (relating to professional health services plan corporations), 40
28 Pa.C.S. Ch. 67 (relating to beneficial societies), Article XXIV
29 of the act of act of May 17, 1921 (P.L.682, No.284), known as
30 "The Insurance Company Law of 1921" and the act of December 29,
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1 1972 (P.L.1701, No.364), known as the "Health Maintenance
2 Organization Act";
3 (3) a self-insured or multiple employer welfare arrangement
4 not exempt from State regulation by the Employee Retirement
5 Income Security Act of 1974 (Public Law 93-406, 29 U.S.C. § 1001
6 et seq.); and
7 (4) an employer-organized insurance association.
8 For purposes of this act, health care plans, fraternal benefit
9 societies and beneficial societies shall be deemed to be engaged
10 in the business of insurance.
11 "Renewal" or "to renew" means the issuance and delivery by an
12 insurer of a policy superseding at the end of the policy period
13 a policy previously issued and delivered by the same insurer,
14 such renewal policy to provide types and limits of coverage at
15 least equal to those contained in the policy being superseded,
16 or the issuance and delivery of a certificate or notice
17 extending the term of a policy beyond its policy period or term
18 with types and limits of coverage at least equal to those
19 contained in the policy being extended: Provided, however, That
20 any policy with a policy period or term of less than twelve
21 months or any period with no fixed expiration date shall for the
22 purpose of this act be considered as if written for successive
23 policy periods or terms of twelve months.
24 "Victim" means an individual who is or has been subjected to
25 abuse.
26 "Victim of abuse" means an individual who is a victim or an
27 individual who seeks or has sought medical or psychological
28 treatment for abuse, protection from abuse or shelter from
29 abuse.
30 Section 2. Section 5(a)(7) of the act is amended and
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1 subsection (a) is amended by adding a paragraph to read:
2 Section 5. Unfair Methods of Competition and Unfair or
3 Deceptive Acts or Practices Defined.--(a) "Unfair methods of
4 competition" and "unfair or deceptive acts or practices" in the
5 business of insurance means:
6 * * *
7 (7) Unfairly discriminating by means of:
8 (i) making or permitting any unfair discrimination between
9 individuals of the same class and equal expectation of life in
10 the rates charged for any contract of life insurance or of life
11 annuity or in the dividends or other benefits payable thereon,
12 or in any other of the terms and conditions of such contract; or
13 (ii) making or permitting any unfair discrimination between
14 individuals of the same class and of essentially the same hazard
15 in the amount of premium, policy, fees or rates charged for any
16 policy or contract of insurance or in the benefits payable
17 thereunder, or in any of the terms or conditions of such
18 contract, or in any other manner whatever; [or]
19 (iii) making or permitting any unfair discrimination between
20 individuals of the same class and essentially the same hazard
21 with regard to underwriting standards and practices or
22 eligibility requirements by reason of race, religion,
23 nationality or ethnic group, age, sex, family size, occupation,
24 place of residence or marital status. The terms "underwriting
25 standards and practices" or "eligibility rules" do not include
26 the promulgation of rates if made or promulgated in accordance
27 with the appropriate Rate Regulatory Act of this Commonwealth
28 and regulations promulgated by the commissioner pursuant to such
29 act[.]; or
30 (iv) making or permitting any unfair discrimination in
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1 reimbursement rates of health care providers for identical
2 services under a State-funded program if such rates were not
3 approved by the commissioner.
4 * * *
5 (15) Knowingly doing any of the following:
6 (i) Requiring an insured to obtain drugs from a mail-order
7 pharmacy as a condition of obtaining the payment for the
8 prescription drugs.
9 (ii) Imposing upon an insured who is not utilizing a mail-
10 order pharmacy a copayment fee or other condition not imposed
11 upon insureds utilizing a mail-order pharmacy.
12 (iii) Denying or impairing the right of an insured to
13 determine from where drugs are dispensed.
14 (iv) Making or permitting any unfair discrimination in
15 reimbursement rates of health care providers for identical
16 services under a State-funded program if such rates were not
17 approved by the commissioner.
18 * * *
19 Section 3. Section 14 of the act is amended to read:
20 Section 14. Exclusions.--Health care plans administered by
21 joint boards of trustees pursuant to section 302 of the Labor
22 Management Relations Act, 29 U.S.C. § 141, et seq., and employer
23 administered health care plans pursuant to collective bargaining
24 agreements which pay benefits from the assets of the trust or
25 the funds of the employer as opposed to payments through an
26 insurance company shall not be subject to any of the provisions
27 of this act except section 5(a)(15).
28 Section 4. The amendment or addition of sections 5(a)(7) and
29 (15) and 14 of the act shall apply to insurance policies issued
30 or renewed on or after the effective date of this section.
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1 Section 5. This act shall take effect in 60 days.
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