PRINTER'S NO. 52
No. 63 Session of 1991
INTRODUCED BY LESCOVITZ, CAWLEY AND COLAIZZO, JANUARY 15, 1991
REFERRED TO COMMITTEE ON INSURANCE, JANUARY 15, 1991
AN ACT
1 Amending the act of May 17, 1921 (P.L.789, No.285), entitled, as
2 amended, "An act relating to insurance; establishing an
3 insurance department; and amending, revising, and
4 consolidating the law relating to the licensing,
5 qualification, regulation, examination, suspension, and
6 dissolution of insurance companies, Lloyds associations,
7 reciprocal and inter-insurance exchanges, and certain
8 societies and orders, the examination and regulation of fire
9 insurance rating bureaus, and the licensing and regulation of
10 insurance agents and brokers; the service of legal process
11 upon foreign insurance companies, associations or exchanges;
12 providing penalties, and repealing existing laws," further
13 providing for transactions in this Commonwealth involving
14 group or blanket insurance or group annuities; prohibiting
15 certain advertisements; and providing penalties.
16 The General Assembly of the Commonwealth of Pennsylvania
17 hereby enacts as follows:
18 Section 1. Section 208(e)(5) and (5.1) of the act of May 17,
19 1921 (P.L.789, No.285), known as The Insurance Department Act of
20 one thousand nine hundred and twenty-one, amended or added July
21 9, 1976 (P.L.912, No.166), are amended to read:
22 Section 208. Certificates of Authority To Do Business.--* *
23 *
24 (e) The provisions of this section shall not apply to the
1 following:
2 * * *
3 (5) [Transactions in this Commonwealth, except group credit
4 life or group credit accident and health insurance transactions,
5 involving group or blanket insurance policies or group annuity
6 contracts where the group policy or contract is issued and
7 delivered pursuant to the group or blanket insurance or group
8 annuity laws of a jurisdiction in which the insurer is
9 authorized to do an insurance business and in which the
10 policyholder is domiciled or has its principal place of business
11 or otherwise has a bona fide situs.] (i) Transactions in this
12 Commonwealth where:
13 (A) The master policy was lawfully issued and delivered in
14 and pursuant to the laws of the state in which the insurer was
15 authorized to do an insurance business and in which the
16 policyholder was domiciled or otherwise had a bona fide situs.
17 (B) The insurer complies with clause (5.1).
18 (C) The insurer does not comply with clause (5.1) but shall
19 be required to submit certificates to the Insurance Department
20 thirty days in advance of their offer for sale in this
21 Commonwealth if the insured is a group insurance trust or any
22 other entity owned, established by, affiliated with or
23 controlled by an insurer solely for marketing a master policy
24 underwritten by an insurer.
25 (ii) For the purposes of this clause, insurer shall include
26 any group insurance trust or any other entity owned, established
27 by, affiliated with or controlled by an insurer marketing a
28 master policy underwritten by an insurer.
29 (5.1) [Transactions in this Commonwealth, except group
30 credit life or group credit accident and health insurance
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1 transactions, involving a group or blanket insurance policy or
2 group annuity contract not exempt under the provisions of clause
3 (5) of this subsection, shall nonetheless be exempt from the
4 provisions of this section if:
5 (i) they involve a group which conforms to one of the
6 definitions of eligibility for group coverage contained in the
7 laws of this Commonwealth; and,
8 (ii) the group policy or contract is lawfully issued without
9 this Commonwealth in a jurisdiction in which the insurer is
10 authorized to do an insurance business.
11 It shall be the responsibility of the insurer claiming exemption
12 under this subsection to demonstrate compliance with each of the
13 above conditions.] Transactions in this Commonwealth involving
14 any group life, group accident and health insurance, or blanket
15 accident and health insurance offered, delivered or issued for
16 delivery by any insurer to residents of this Commonwealth under
17 a policy of group life or accident and health insurance or
18 blanket accident and health insurance issued outside this
19 Commonwealth which comply with all laws relating to group
20 insurance issued within this Commonwealth, except:
21 (i) As those laws include a definition of group.
22 (ii) Group insurance issued to ten or more members or
23 employes of the same employer, or employes or members of any
24 trade or professional association, or members of a labor union,
25 or members of any other similar association, where such
26 association or union has a constitution or bylaws and is formed
27 and operated in good faith for purposes other than that of
28 obtaining insurance, provides significant benefits to the
29 membership other than insurance, and which is not owned by,
30 established by, affiliated with or controlled by the insurer.
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1 (iii) Particular policies if the commissioner determines,
2 pursuant to regulation, that application of this section to such
3 policies is inappropriate and not consistent with the purposes
4 of this section.
5 * * *
6 Section 2. The act is amended by adding sections to read:
7 Section 208.1. Improper Advertising.--No insurer shall
8 advertise policies as being at "group rates" or "low group
9 rates" unless such policies are less expensive than the same
10 policy if sold to individuals without the group mass marketing
11 technique.
12 Section 223. Additional Fines.--Notwithstanding any
13 enforcement or penalty provisions under this act or the act of
14 July 22, 1974 (P.L.589, No.205), known as the "Unfair Insurance
15 Practices Act," the Insurance Commissioner, upon a determination
16 that any provision of section 208(e)(5) or (5.1) or section
17 208.1 has been violated, may fine the violator a sum not to
18 exceed five thousand dollars ($5,000) for each offense.
19 Section 3. This act shall take effect in 60 days.
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