PRIOR PRINTER'S NO. 284 PRINTER'S NO. 2720
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 9, 1987
AS REPORTED FROM COMMITTEE ON INSURANCE, HOUSE OF REPRESENTATIVES, AS AMENDED, JANUARY 25, 1988
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
1 Holding Companies Not to be Licensed.--(a) As used in this 2 section: 3 (1) "Lending institution" means any institution that accepts 4 deposits OR, IN THE CASE OF CREDIT UNIONS AND FEDERAL CREDIT <-- 5 UNIONS, PAYMENTS ON SHARES, and lends money in the Commonwealth 6 of Pennsylvania, including banks, CREDIT UNIONS AND FEDERAL <-- 7 CREDIT UNIONS and savings and loan associations, but excluding 8 insurance companies. 9 (2) "Public utility" means a private employer subject to the 10 jurisdiction of the Pennsylvania Public Utility Commission and 11 engaged in the business of rendering electric, gas, water and 12 steam heat services to the public in this Commonwealth: 13 Provided, however, That the term "public utility" shall not 14 include rural electrification cooperatives. 15 (3) The terms "subsidiary" and "affiliate" shall be defined 16 in the regulations promulgated by the Insurance Commissioner, 17 except that "affiliate" shall not apply to an entity which owns 18 an interest in another company or corporation where the 19 ownership interest is not sufficient to permit exercise of 20 effective control, and does not involve direct or indirect 21 ownership or control of five per centum or more of the voting 22 stock of such company or corporation. Nor shall it apply to an 23 entity whose stock is owned by another, provided that the amount 24 of stock owned by any one company or corporation does not permit 25 effective control and does not exceed five per centum of the 26 voting stock of the entity. The term "affiliate" shall, subject 27 to the provisions to invest in stock contained in this 28 subsection, include bank holding company, savings and loan 29 holding company, and public utility holding company as 30 hereinafter defined. 19870H0263B2720 - 2 -
1 (4) "Bank holding company" shall mean and include the 2 definition of such term in section two of an act of Congress 3 entitled the "Bank Holding Company Act of 1956," as amended: 4 Provided, however, That if on or before the effective date of 5 this act, a bank holding company has been granted an exemption 6 by the Board of Governors of the Federal Reserve System pursuant 7 to section 4(d) of the Bank Holding Company Act of 1956, as 8 amended, such bank holding company shall not be held to be a 9 bank holding company within the meaning of section 2 of the Bank 10 Holding Company Act of 1956, as amended. 11 (5) "Credit life, health, and accident insurance" means 12 insurance on the life and health of a borrower from a lending 13 institution to secure the repayment of the amount borrowed, in 14 accordance with regulations promulgated by the Insurance 15 Commissioner. 16 (5.1) "Credit unemployment insurance" means insurance on the 17 employment of a borrower from a lending institution to secure 18 the repayment of the amount borrowed, in accordance with the 19 regulations promulgated by the Insurance Commissioner. 20 (6) "Title insurance" shall mean and include the definition 21 of such term in section seven hundred and one of the act of May 22 17, 1921 (P.L.682, No.284), known as "The Insurance Company Law 23 of 1921." 24 (7) A "savings and loan holding company" shall mean and 25 include the definition of such term as defined in Title 12, 26 United States Code, sections 1730a (a) (1) (D) (E) (F). 27 (8) "Public utility holding company" shall mean and include 28 the definition of such term as defined in Title 15, United 29 States Code, sections 79b (a) (7), including electric, gas, 30 water and steam heat services. 19870H0263B2720 - 3 -
1 (9) "Deposits" shall mean and include the definition of such 2 term as set forth in Title 12, United States Code, section 1813 3 (l), (1), (2), (3), (4), (5). 4 (b) No lending institution, public utility, bank holding 5 company, savings and loan holding company or any subsidiary or 6 affiliate of the foregoing, or officer or employe thereof, may, 7 directly or indirectly, be licensed or admitted as an insurer or 8 be licensed to sell insurance in this State either as a broker 9 or as an agent except that a lending institution or bank holding 10 company, subsidiary or affiliate of a lending institution may be 11 licensed to sell credit life, health and accident insurance and 12 credit unemployment insurance and to sell and underwrite title 13 insurance in accordance with regulations promulgated by the 14 Insurance Commissioner. 15 (c) The Insurance Commissioner is authorized to promulgate 16 regulations in order to effectuate the purposes of this section, 17 which are to help maintain the separation between lending 18 institutions and public utilities and the insurance business and 19 to minimize the possibilities of unfair competitive practices by 20 lending institutions and public utilities against insurance 21 companies, agents and brokers. 22 Section 2. This act shall take effect in 60 days. A16L40JLW/19870H0263B2720 - 4 -