A02804
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1680
Session of
2021
INTRODUCED BY PICKETT, JUNE 23, 2021
REFERRED TO COMMITTEE ON INSURANCE, JUNE 23, 2021
AN ACT
Amending the act of July 22, 1974 (P.L.589, No.205), entitled
"An act relating to unfair insurance practices; prohibiting
unfair methods of competition and unfair or deceptive acts
and practices; and prescribing remedies and penalties,"
providing for policy changes.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of July 22, 1974 (P.L.589, No.205), known
as the Unfair Insurance Practices Act, is amended by adding a
section to read:
Section 5.1. Policy Changes.--(a) Notwithstanding the
definition of "renewal" or "to renew" in section 3, an insurer
may change the types and limits of coverage at renewal that
reduce those contained in the policy being superseded if the
insurer has met the requirements of this section.
(b) An insurer may change the types and limits of coverage
at renewal that reduce those contained in the policy being
superseded if the insurer has filed with the commissioner a
request for the proposed policy changes no fewer than ninety
days prior to the effective date of the proposed changes. The
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request shall, at a minimum, include the following:
(1) The proposed effective date of the proposed changes.
(2) The number of insureds within this Commonwealth who will
be affected by the proposed changes.
(3) The number of claims, evaluated on an annual basis, that
the insurer anticipates might be impacted by the proposed
changes.
(4) The total dollar value of the losses and expenses
associated with the claims identified in paragraph (3).
(5) The overall average premium increase or decrease caused
by the proposed changes.
(6) The reasons for requesting the changes.
(7) A copy of the "Notice of Policy Changes" that will be
issued to the affected policyholders.
(c) The commissioner shall approve or deny the proposed
changes. In reviewing filings made under this section, the
commissioner may consider whether shall consider whether the
renewal policy provides types and limits of coverage that are
substantially similar to those contained in the policy being
superseded and whether the proposed changes are in the public
interest. In determining whether the proposed changes are in
the public interest, making this determination, the commissioner
may consider, but shall not be limited to, the following:
(1) The impact on the premiums and rates of the policy, with
and without the proposed changes.
(2) The number of insureds within this Commonwealth who will
be affected by the proposed changes.
(3) The number of claims, evaluated on an annual basis, that
the insurer anticipates might be impacted by the proposed
changes.
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(4) The total dollar value of the losses and expenses
associated with the claims identified in paragraph (3).
(5) Whether the proposed changes are consistent with policy
language found in the insurance market.
(6) Whether the proposed changes are sought to reflect
changes in the insurer's reinsurance coverage.
(7) Whether the proposed changes are in response to a change
in the laws of this Commonwealth.
(8) Whether the proposed "Notice of Policy Changes" meets
the requirements of the notice under subsection (e).
(9) Whether and to what extent the benefits to be provided
under the new policy are lesser in quantity and quality than the
benefits provided in the policy being superseded.
(d) Notwithstanding subsection (b), an insurer may not
change a provision in a policy that reimburses an insured for a
loss based upon replacement cost to a provision that reimburses
an insured for actual cost value.
(e) No changes made in accordance with this section shall be
effective until the insurer provides the insured with notice of
the changes at least thirty days prior to the effective date of
the changes. The notice shall be on a form prescribed and
approved by the Insurance Department and shall, at a minimum,
meet the following standards:
(1) The notice shall be in twelve-point font and clearly
labeled "Notice of Policy Changes."
(2) The notice shall prominently state "Attention: Your
Coverage is Changing" immediately below the label.
(3) The notice shall include the name of the insurance
company that issued the policy.
(4) The notice shall include the policy number that is being
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changed.
(5) The notice shall clearly describe, in narrative form,
the changes being made to the policy . , including, but not
limited to, specifying how the change decreases coverage and to
what extent.
(6) The notice shall advise the insured of possible
eligibility for insurance under the act of July 31, 1968
(P.L.738, No.233), known as "The Pennsylvania Fair Plan Act."
(7) The notice shall advise of the change in premium, if
any, caused by the changes made to the policy.
(8) The notice shall provide a telephone number and email
address that the insured may use to contact the insurer to
obtain further information on the changes in terms and
conditions of the policy or reduction in coverage.
(f) An insurer who has filed a proposed change request may
request an administrative hearing if the commissioner denies the
filing. The hearing shall be conducted in accordance with 2
Pa.C.S. (relating to administrative law and procedure).
(g) Any filing approved by the Insurance Department under
this section shall be posted on the publicly accessible Internet
website of the Insurance Department no later than seven days
after approval and shall remain available on that website for
one year after the renewal effective date of the filing.
Section 2. This act shall take effect in 60 days.
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