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                                                       PRINTER'S NO. 565

THE GENERAL ASSEMBLY OF PENNSYLVANIA


HOUSE BILL

No. 511 Session of 2007


        INTRODUCED BY COHEN, FREEMAN, CALTAGIRONE, BLACKWELL, CURRY,
           FABRIZIO, GEORGE, JOSEPHS, MAHONEY, McGEEHAN, OLIVER,
           PALLONE, PETRONE, PRESTON, PYLE, SABATINA, SHIMKUS, STABACK,
           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
    19  damage to property so as to intimidate or attempt to control the

     1  behavior of another person covered under 23 Pa.C.S. Ch. 61
     2  (relating to protection from abuse).
     3     "Commissioner" means the Insurance Commissioner of the
     4  Commonwealth of Pennsylvania.
     5     "Family or household members" has the meaning given in 23
     6  Pa.C.S. § 6102(a) (relating to definitions).
     7     "Insurance policy" or "insurance contract" means any contract
     8  of insurance, indemnity, health care, suretyship, title
     9  insurance, or annuity issued, proposed for issuance or intended
    10  for issuance by any person.
    11     "Person" means:
    12     (1)  any individual, corporation, association, partnership,
    13  reciprocal exchange, inter-insurer, Lloyds insurer, fraternal
    14  benefit society, beneficial association, agent, broker, adjuster
    15  and any other legal entity engaged in the business of
    16  insurance[, including agents, brokers and adjusters and also
    17  means health care plans as defined in 40 Pa.S. Ch.61 relating to
    18  hospital plan corporations, 40 Pa.S. Ch.63 relating to
    19  professional health services plan corporations, 40 Pa.S. Ch.65
    20  relating to fraternal and beneficial societies, 40 Pa.S. Ch.67
    21  relating to beneficial societies and the act of December 29,
    22  1972 (P.L.1701, No.364), known as the "Voluntary Nonprofit
    23  Health Service Act of 1972."];
    24     (2)  a health care plan as defined in 40 Pa.C.S. Ch. 61
    25  (relating to hospital plan corporations), 40 Pa.C.S. Ch. 63
    26  (relating to professional health services plan corporations), 40
    27  Pa.C.S. Ch. 67 (relating to beneficial societies), Article XXIV
    28  of the act of act of May 17, 1921 (P.L.682, No.284), known as
    29  "The Insurance Company Law of 1921" and the act of December 29,
    30  1972 (P.L.1701, No.364), known as the "Health Maintenance
    20070H0511B0565                  - 2 -     

     1  Organization Act";
     2     (3)  a self-insured or multiple employer welfare arrangement
     3  not exempt from State regulation by the Employee Retirement
     4  Income Security Act of 1974 (Public Law 93-406, 29 U.S.C. § 1001
     5  et seq.); and
     6     (4)  an employer-organized insurance association.
     7  For purposes of this act, health care plans, fraternal benefit
     8  societies and beneficial societies shall be deemed to be engaged
     9  in the business of insurance.
    10     "Renewal" or "to renew" means the issuance and delivery by an
    11  insurer of a policy superseding at the end of the policy period
    12  a policy previously issued and delivered by the same insurer,
    13  such renewal policy to provide types and limits of coverage at
    14  least equal to those contained in the policy being superseded,
    15  or the issuance and delivery of a certificate or notice
    16  extending the term of a policy beyond its policy period or term
    17  with types and limits of coverage at least equal to those
    18  contained in the policy being extended: Provided, however, That
    19  any policy with a policy period or term of less than twelve
    20  months or any period with no fixed expiration date shall for the
    21  purpose of this act be considered as if written for successive
    22  policy periods or terms of twelve months.
    23     "Victim" means an individual who is or has been subjected to
    24  abuse.
    25     "Victim of abuse" means an individual who is a victim or an
    26  individual who seeks or has sought medical or psychological
    27  treatment for abuse, protection from abuse or shelter from
    28  abuse.
    29     Section 2.  Section 5(a)(7) of the act is amended and
    30  subsection (a) is amended by adding a paragraph to read:
    20070H0511B0565                  - 3 -     

     1     Section 5.  Unfair Methods of Competition and Unfair or
     2  Deceptive Acts or Practices Defined.--(a)  "Unfair methods of
     3  competition" and "unfair or deceptive acts or practices" in the
     4  business of insurance means:
     5     * * *
     6     (7)  Unfairly discriminating by means of:
     7     (i)  making or permitting any unfair discrimination between
     8  individuals of the same class and equal expectation of life in
     9  the rates charged for any contract of life insurance or of life
    10  annuity or in the dividends or other benefits payable thereon,
    11  or in any other of the terms and conditions of such contract; or
    12     (ii)  making or permitting any unfair discrimination between
    13  individuals of the same class and of essentially the same hazard
    14  in the amount of premium, policy, fees or rates charged for any
    15  policy or contract of insurance or in the benefits payable
    16  thereunder, or in any of the terms or conditions of such
    17  contract, or in any other manner whatever; [or]
    18     (iii)  making or permitting any unfair discrimination between
    19  individuals of the same class and essentially the same hazard
    20  with regard to underwriting standards and practices or
    21  eligibility requirements by reason of race, religion,
    22  nationality or ethnic group, age, sex, family size, occupation,
    23  place of residence or marital status. The terms "underwriting
    24  standards and practices" or "eligibility rules" do not include
    25  the promulgation of rates if made or promulgated in accordance
    26  with the appropriate Rate Regulatory Act of this Commonwealth
    27  and regulations promulgated by the commissioner pursuant to such
    28  act[.]; or
    29     (iv)  making or permitting any unfair discrimination by
    30  reclassifying or otherwise effecting a change in classification
    20070H0511B0565                  - 4 -     

     1  of an insured based on a factor related to the health status or
     2  past medical claims of the insured.
     3     (v)  making or permitting any unfair discrimination in
     4  reimbursement rates of health care providers for identical
     5  services under a State-funded program if such rates were not
     6  approved by the commissioner.
     7     (vi)  Increasing the amount of a premium based on a factor
     8  related to the health status of an insured.
     9     * * *
    10     (15)  Knowingly doing any of the following:
    11     (i)  Requiring an insured to obtain drugs from a mail-order
    12  pharmacy as a condition of obtaining the payment for the
    13  prescription drugs.
    14     (ii)  Imposing upon an insured who is not utilizing a mail-
    15  order pharmacy a copayment fee or other condition not imposed
    16  upon insureds utilizing a mail-order pharmacy.
    17     (iii)  Denying or impairing the right of an insured to
    18  determine from where drugs are dispensed.
    19     (iv)  Making or permitting any unfair discrimination by
    20  reclassifying or otherwise effecting a change in classification
    21  of an insured based on a factor related to the gender of the
    22  insured.
    23     * * *
    24     Section 3.  Section 14 of the act is amended to read:
    25     Section 14.  Exclusions.--Health care plans administered by
    26  joint boards of trustees pursuant to section 302 of the Labor
    27  Management Relations Act, [29 U.S.C. § 141, et seq.] 1947 (61
    28  Stat. 136, 29 U.S.C. § 141 et seq.), and employer administered
    29  health care plans pursuant to collective bargaining agreements
    30  which pay benefits from the assets of the trust or the funds of
    20070H0511B0565                  - 5 -     

     1  the employer as opposed to payments through an insurance company
     2  shall not be subject to any of the provisions of this act except
     3  section 5(a)(15).
     4     Section 4.  The amendment or addition of sections 5(a)(7) and
     5  (15) and 14 of the act shall apply to insurance policies issued
     6  or renewed on or after the effective date of this section.
     7     Section 5.  This act shall take effect in 60 days.
















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