PRINTER'S NO. 565
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. A30L40JAM/20070H0511B0565 - 6 -