See other bills
under the
same topic
PRIOR PRINTER'S NO. 2552
PRINTER'S NO. 2991
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1851
Session of
2017
INTRODUCED BY PICKETT, BAKER, SCHLEGEL CULVER, DeLUCA, MILLARD,
WARD, D. COSTA, BRADFORD, M. QUINN AND WHEELAND,
OCTOBER 10, 2017
AS REPORTED FROM COMMITTEE ON INSURANCE, HOUSE OF
REPRESENTATIVES, AS AMENDED, FEBRUARY 5, 2018
AN ACT
Amending the act of May 17, 1921 (P.L.789, No.285), entitled "An
act relating to insurance; establishing an insurance
department; and amending, revising, and consolidating the law
relating to the licensing, qualification, regulation,
examination, suspension, and dissolution of insurance
companies, Lloyds associations, reciprocal and inter-
insurance exchanges, and certain societies and orders, the
examination and regulation of fire insurance rating bureaus,
and the licensing and regulation of insurance agents and
brokers; the service of legal process upon foreign insurance
companies, associations or exchanges; providing penalties,
and repealing existing laws," in examinations, further
providing for purpose and providing for scheduling
conference, for budget estimate and revisions, for billing
invoices and for annual examination and analysis report.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 901 of the act of May 17, 1921 (P.L.789,
No.285), known as The Insurance Department Act of 1921, is
amended to read:
Section 901. Purpose.--The purpose of this article is to
provide an effective and efficient system for examining the
activities, operations, financial condition and affairs of all
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
persons transacting the business of insurance in this
Commonwealth and all persons otherwise subject to the
jurisdiction of the department. The provisions of this article
are intended to enable the department to adopt a flexible system
of examinations which directs resources as may be deemed
appropriate and necessary for the administration of the
insurance and insurance related laws of this Commonwealth. This
article recognizes the commitment of the department to work with
the insurance industry to utilize the most efficient means to
conduct examinations, minimize costs, facilitate cooperation and
communication between insurers and the department, increase
transparency and increase efficiencies to the greatest extent
possible.
Section 2. The act is amended by adding sections to read:
Section 904.1. Scheduling Conference.--Prior to commencing
examination field work under this article, the department shall
hold a scheduling conference with a company to discuss the
following:
(1) The purpose and scope of the examination.
(2) The estimated costs for the examination.
(3) The types of information that the company will be asked
to produce.
(4) The most efficient means of conducting the examination.
(5) Any alternative approaches in conducting the examination
that would be more convenient, less burdensome or less expensive
for the company while still providing for an effective
examination by the department.
Section 904.2. Budget Estimate and Revisions.--(a) No more
than thirty days after the scheduling conference under section
904.1 has been conducted, the department shall provide the
20170HB1851PN2991 - 2 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
company with a detailed written budget estimate for the
examination that must, for each forthcoming phase of the
examination, as appropriate:
(1) Identify the individuals or firms performing the
examination and their daily or hourly rates.
(2) Provide an estimate of travel, lodging, meal and other
administrative or supply costs.
(3) Estimate the length of time to conduct on-site and off-
site examination activities.
(b) Within fifteen days of receipt of a budget estimate
under subsection (a), the company and the department shall have
an additional discussion regarding the most efficient means of
conducting the examination and producing information. If
necessary, revisions of the budget estimate shall be made.
(c) The time periods under subsections (a) and (b) may be
extended if the company and the department mutually agree to the
extension.
(d) At any time during the examination, the department shall
hold another scheduling conference with the company in
accordance with section 904.1 and provide a revised budget
estimate as set forth in subsection (a) if:
(1) the department determines that the cost of the
examination will exceed the budget estimate by more than ten per
centum; or
(2) there is a material change in staffing assignments.
Section 904.3. Billing Invoices.--(a) The following shall
apply for each billing invoice submitted to a company regarding
examination work:
(1) An invoice which is submitted by a contractor of the
department must contain an itemized and detailed description of
20170HB1851PN2991 - 3 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
charges on a quarterly hour basis by the examiner, including the
applicable billing rates and a per charge description of related
travel or other expenses.
(2) An invoice which is submitted by the department directly
must contain instructions on how a company may obtain an
itemized and detailed description of the charges.
(3) An invoice shall be submitted to a company on a monthly
basis as soon as practicable but no later than sixty days after
the date on which the billed activity was performed.
(4) An invoice must provide a due date of no fewer than
thirty days after the bill is submitted to the company.
(5) An invoice must contain an explanation of the invoicing
process and the procedure for resolving billing disputes.
(b) To the extent possible, the department shall follow the
procedures under subsection (a) for billing invoices submitted
by third-party consultants retained as described under section
905.1(a)(2), (3), (4), (5) or (6).
Section 905.1. Annual Examination and Analysis Report.--(a)
Within thirty days of the end of each fiscal year, the
department shall publish a report setting forth, for the
immediately prior fiscal year, the total amount of money that
the department billed to companies and contractors of the
department which were BILLED TO COMPANIES BY THE DEPARTMENT AND
ITS CONTRACTORS retained in each of the following categories:
(1) Financial examinations conducted under section 904.
(2) Market conduct examinations conducted under section 904.
(3) Examinations conducted under section 1406 of the act of
May 17, 1921 (P.L.682, No.284), known as "The Insurance Company
Law of 1921."
(4) The review of transactions under any of the following
20170HB1851PN2991 - 4 -
<--
<--
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
sections of "The Insurance Company Law of 1921":
(i) Section 803-A.
(ii) Section 807-A.
(iii) Section 1402.
(iv) Section 1405.
(5) The solvency monitoring of companies under any of the
following:
(i) Section 507-A.
(ii) Section 506-B.
(iii) Section 2607 of "The Insurance Company Law of 1921."
(6) Other subsequently enacted statutory provisions that
provide for the retention of third-party consultants.
(b) The report under this section must:
(1) separately list the identity of each contractor retained
by the department and the amount of money paid by companies to
that contractor BILLED BY THE CONTRACTOR TO COMPANIES ;
(2) disclose the total amount of deposits into the Insurance
Regulation and Oversight Fund under section 4(a)(3) of the act
of July 2, 2013 (P.L.255, No.46), known as the "Insurance
Regulation and Oversight Fund Act," as a result of financial and
market regulation activities for which regulated entities are
responsible to pay; and
(3) include an analysis of the effectiveness of the
procedures under this article and recommendations to further
improve the efficiency and transparency of the examination
processes.
Section 3. This act shall take effect in 60 days.
20170HB1851PN2991 - 5 -
<--
<--
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27