PRINTER'S NO. 284
No. 263 Session of 1987
INTRODUCED BY ITKIN, SEVENTY, RYBAK, VAN HORNE, JOHNSON,
BELARDI, VEON, TIGUE, TRELLO, MERRY, PRESTON, CALTAGIRONE,
WOGAN, OLASZ, McCALL, FARGO, PUNT, MORRIS, BLAUM, BATTISTO,
COLAFELLA, McVERRY, REBER, WOZNIAK AND COWELL, FEBRUARY 10,
1987
REFERRED TO COMMITTEE ON INSURANCE, FEBRUARY 10, 1987
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,"
13 authorizing the licensing of lending institutions, public
14 utilities, bank holding companies and savings and loan
15 holding companies to sell credit unemployment insurance.
16 The General Assembly of the Commonwealth of Pennsylvania
17 hereby enacts as follows:
18 Section 1. Section 641 of the act of May 17, 1921 (P.L.789,
19 No.285), known as The Insurance Department Act of one thousand
20 nine hundred and twenty-one, added December 30, 1974 (P.L.1148,
21 No.365), is amended to read:
22 Section 641. Lending Institutions, Public Utilities and
23 Holding Companies Not to be Licensed.--(a) As used in this
1 section:
2 (1) "Lending institution" means any institution that accepts
3 deposits and lends money in the Commonwealth of Pennsylvania,
4 including banks and savings and loan associations, but excluding
5 insurance companies.
6 (2) "Public utility" means a private employer subject to the
7 jurisdiction of the Pennsylvania Public Utility Commission and
8 engaged in the business of rendering electric, gas, water and
9 steam heat services to the public in this Commonwealth:
10 Provided, however, That the term "public utility" shall not
11 include rural electrification cooperatives.
12 (3) The terms "subsidiary" and "affiliate" shall be defined
13 in the regulations promulgated by the Insurance Commissioner,
14 except that "affiliate" shall not apply to an entity which owns
15 an interest in another company or corporation where the
16 ownership interest is not sufficient to permit exercise of
17 effective control, and does not involve direct or indirect
18 ownership or control of five per centum or more of the voting
19 stock of such company or corporation. Nor shall it apply to an
20 entity whose stock is owned by another, provided that the amount
21 of stock owned by any one company or corporation does not permit
22 effective control and does not exceed five per centum of the
23 voting stock of the entity. The term "affiliate" shall, subject
24 to the provisions to invest in stock contained in this
25 subsection, include bank holding company, savings and loan
26 holding company, and public utility holding company as
27 hereinafter defined.
28 (4) "Bank holding company" shall mean and include the
29 definition of such term in section two of an act of Congress
30 entitled the "Bank Holding Company Act of 1956," as amended:
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1 Provided, however, That if on or before the effective date of
2 this act, a bank holding company has been granted an exemption
3 by the Board of Governors of the Federal Reserve System pursuant
4 to section 4(d) of the Bank Holding Company Act of 1956, as
5 amended, such bank holding company shall not be held to be a
6 bank holding company within the meaning of section 2 of the Bank
7 Holding Company Act of 1956, as amended.
8 (5) "Credit life, health, and accident insurance" means
9 insurance on the life and health of a borrower from a lending
10 institution to secure the repayment of the amount borrowed, in
11 accordance with regulations promulgated by the Insurance
12 Commissioner.
13 (5.1) "Credit unemployment insurance" means insurance on the
14 employment of a borrower from a lending institution to secure
15 the repayment of the amount borrowed, in accordance with the
16 regulations promulgated by the Insurance Commissioner.
17 (6) "Title insurance" shall mean and include the definition
18 of such term in section seven hundred and one of the act of May
19 17, 1921 (P.L.682, No.284), known as "The Insurance Company Law
20 of 1921."
21 (7) A "savings and loan holding company" shall mean and
22 include the definition of such term as defined in Title 12,
23 United States Code, sections 1730a (a) (1) (D) (E) (F).
24 (8) "Public utility holding company" shall mean and include
25 the definition of such term as defined in Title 15, United
26 States Code, sections 79b (a) (7), including electric, gas,
27 water and steam heat services.
28 (9) "Deposits" shall mean and include the definition of such
29 term as set forth in Title 12, United States Code, section 1813
30 (l), (1), (2), (3), (4), (5).
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1 (b) No lending institution, public utility, bank holding
2 company, savings and loan holding company or any subsidiary or
3 affiliate of the foregoing, or officer or employe thereof, may,
4 directly or indirectly, be licensed or admitted as an insurer or
5 be licensed to sell insurance in this State either as a broker
6 or as an agent except that a lending institution or bank holding
7 company, subsidiary or affiliate of a lending institution may be
8 licensed to sell credit life, health and accident insurance and
9 credit unemployment insurance and to sell and underwrite title
10 insurance in accordance with regulations promulgated by the
11 Insurance Commissioner.
12 (c) The Insurance Commissioner is authorized to promulgate
13 regulations in order to effectuate the purposes of this section,
14 which are to help maintain the separation between lending
15 institutions and public utilities and the insurance business and
16 to minimize the possibilities of unfair competitive practices by
17 lending institutions and public utilities against insurance
18 companies, agents and brokers.
19 Section 2. This act shall take effect in 60 days.
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