SENATE AMENDED
PRIOR PRINTER'S NOS. 2455, 2862, 3519, PRINTER'S NO. 3886
3687
No. 1980 Session of 1977
INTRODUCED BY MRS. HARPER, MESSRS. GIAMMARCO, JONES, KOWALYSHYN,
C. GEORGE, RAPPAPORT, MRS. SCANLON, MESSRS. LAUGHLIN, GRAY,
CASSIDY, BORSKI, SCHWEDER, DOMBROWSKI, MRS. WISE, MESSRS.
RICHARDSON, BARBER, WIGGINS, KUKOVICH, BROWN, MELUSKEY,
McLANE, O'DONNELL, GATSKI, MRS. KELLY, MESSRS. LINCOLN,
GREENFIELD, BERLIN, RENWICK, WILLIAMS, COHEN, FRYER AND
PRENDERGAST, DECEMBER 14, 1977
AS AMENDED ON SECOND CONSIDERATION, IN SENATE,
SEPTEMBER 26, 1978
AN ACT
1 Amending the act of July 19, 1974 (P.L.489, No.176), entitled
2 "An act providing for a compensation system for persons
3 injured in motor vehicle accidents; requiring insurance for
4 all motor vehicles required to be registered in Pennsylvania;
5 defining compensable damage in motor vehicle accident cases;
6 establishing an assigned claims plan; providing for
7 arbitration; imposing powers and duties on courts, the
8 Department of Transportation and the Insurance Commissioner;
9 prohibiting certain discrimination; and providing penalties,"
10 AUTHORIZING CERTAIN PERSONS TO TREAT THEIR NO-FAULT INSURANCE <--
11 AS PRIMARY; providing for the disclosure of certain
12 information and FOR TEMPORARY SUSPENSION OF SECURITY <--
13 REQUIREMENTS UNDER CERTAIN CIRCUMSTANCES, imposing certain
14 powers and duties on the commissioner, and further providing
15 for expense benefits.
16 The General Assembly of the Commonwealth of Pennsylvania
17 hereby enacts as follows:
18 SECTION 1. SECTION 104, ACT OF JULY 19, 1974 (P.L.489, <--
19 NO.176), KNOWN AS THE "PENNSYLVANIA NO-FAULT MOTOR VEHICLE
20 INSURANCE ACT," IS AMENDED BY ADDING A SUBSECTION TO READ:
1 § 104. REQUIRED MOTOR VEHICLE INSURANCE.
2 * * *
3 (A.1) AN OWNER OF A MOTOR VEHICLE, OTHER THAN A MOTORCYCLE,
4 WHO HAS PROVIDED SECURITY IN ACCORDANCE WITH THE PROVISIONS OF
5 SUBSECTION (A) AND WHO HAS ONE OR MORE VEHICLES NOT IN USE FOR
6 PERIODS OF TIME IN EXCESS OF SIXTY CONSECUTIVE CALENDAR DAYS,
7 MAY OBTAIN FROM HIS INSURER AN AGREEMENT TO THE POLICY OF
8 INSURANCE SUSPENDING TEMPORARILY ALL COVERAGES PROVIDED THEREIN
9 WITH THE EXCEPTION OF PERSONAL INJURY PROTECTION, IN WHOLE OR IN
10 PART, FOR THE DURATION OF TIME SUCH VEHICLE MAY NOT BE IN USE.
11 IN ALL SUCH CASES, AN OWNER OF SUCH A MOTOR VEHICLE SHALL NOT BE
12 REQUIRED TO SURRENDER THE REGISTRATION CERTIFICATE AND LICENSE
13 PLATES TO THE DEPARTMENT AS PROVIDED IN SUBSECTION (D). THE
14 COMMISSIONER SHALL PROMULGATE REASONABLE AND NECESSARY RULES AND
15 REGULATIONS GOVERNING SUCH AGREEMENTS BETWEEN AN OWNER AND HIS
16 INSURER INCLUDING PROVISIONS FOR AN EQUITABLE REDUCTION FROM THE
17 ANNUAL POLICY PREMIUM OF THE INSURER.
18 * * *
19 Section 1 2. Subsection (a) of section 105, subsection (a) <--
20 of section 108 and, subsection (a) of section 202, SUBSECTION <--
21 (D) OF SECTION 203, SUBSECTION (A) OF SECTION 207, SECTIONS 208
22 AND 504, act of July 19, 1974 (P.L.489, No.176), known as the <--
23 "Pennsylvania No-fault Motor Vehicle Insurance Act," OF THE ACT <--
24 are amended OR ADDED to read: <--
25 § 105. Availability of insurance.
26 (a) Plan.--
27 (1) The commissioner shall establish and implement or
28 approve and supervise a plan assuring that any required no-
29 fault benefits and tort liability coverages for motor
30 vehicles will be conveniently and expeditiously available,
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1 subject only to payment or provisions for payment of the
2 premium, to each individual who cannot conveniently obtain
3 insurance through ordinary methods at rates not in excess of
4 those applicable to similarly situated individuals under the
5 plan. The plan may provide reasonable means for the transfer
6 of individuals insured thereunder into the ordinary market,
7 at the same or lower rates, pursuant to regulations
8 established by the commissioner. The plan may be implemented
9 by assignment of applicants among insurers, pooling, any
10 joint insuring or reinsuring arrangement, or any other
11 method, that results in all applicants being conveniently
12 afforded the insurance coverages on reasonable and not
13 unfairly discriminatory terms.
14 (2) The plan shall make available added loss benefits
15 and tort liability coverage together with other contract
16 provisions which the commissioner determines are reasonably
17 needed by applicants and are commonly afforded in voluntary
18 markets. The plan must also assure that there is available
19 through the private sector or otherwise to all applicants
20 adequate premium financing or provision for the installment
21 payment of premiums subject to customary terms and
22 conditions.
23 (3) All insurers writing no-fault benefits and tort
24 liability coverages in this Commonwealth shall participate in
25 the plan. The plan shall provide for equitable apportionment,
26 among all participating insurers writing any insurance
27 coverage required under the plan, of the financial burdens of
28 insurance provided to applicants under the plan and the costs
29 of operation of the plan.
30 (4) Subject to the supervision and approval of the
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1 commissioner, insurers may consult and agree with each other
2 and with other appropriate persons as to the organization,
3 administration, and operation of the plan and as to rates and
4 rate modifications for insurance coverages provided under the
5 plan. Rates and rate modifications adopted or charged for
6 insurance coverages provided under the plan shall:
7 (A) be first adopted or approved by the
8 commissioner; and
9 (B) be reasonable and not unfairly discriminatory
10 among similarly situated applicants for insurance
11 pursuant to regulations established by the commissioner.
12 (5) To carry out the objectives of this subsection, the
13 commissioner may adopt rules, make orders, enter into
14 agreements with other governmental and private entities and
15 individuals, and form and operate or authorize the formation
16 and operation of bureaus and other legal entities.
17 (6) Every individual who procures the required no-fault
18 benefits and tort liability coverages through the plan shall
19 be informed at the time of application that the insurance
20 will be procured through the plan and such individual shall
21 also be informed of the reason for his placement through the
22 plan. The plan application shall also include a prominently
23 displayed disclosure statement in contrasting ink immediately
24 above the applicant's signature line stating that such
25 application is for automobile insurance coverage through the
26 Pennsylvania Automobile Insurance Plan and that such plan is
27 known as the Assigned Risk Plan. The commissioner shall issue
28 regulations prescribing language and procedure for
29 disclosure.
30 * * *
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1 § 108. Assigned claims plan.
2 (a) General.--
3 (1) If this act is in effect on the date when the
4 accident resulting in injury occurs, a victim or the survivor
5 or survivors of a deceased victim may obtain basic benefits
6 through the assigned claims plan established pursuant to
7 subsection (b) of this section, if basic loss insurance:
8 (A) is not applicable to the injury for a reason
9 other than those specified in the provisions on
10 ineligible claimants;
11 [(B) is not applicable to the injury because the <--
12 victim converted a motor vehicle while he was under
13 fifteen years of age;
14 (C)] (B) applicable to the injury cannot be <--
15 identified;
16 [(D)] (C) applicable to the injury is inadequate to <--
17 provide the contracted-for benefits because of financial
18 inability of an obligor to fulfill its obligations; or
19 [(E)] (D) benefits are refused by an obligor for a <--
20 reason other than that the individual is not entitled in
21 accordance with this act to receive the basic loss
22 benefits claimed.
23 (2) If a claim qualifies for assignment under paragraph
24 (1)[(C), (D), or (E)] (B), (C), OR (D) of this subsection, <--
25 the assigned claims bureau or any insurer to whom the claim
26 is assigned is subrogated to all rights of the claimant
27 against the obligor legally obligated to provide basic
28 benefits to the claimant, or against any successor in
29 interest to or substitute for such obligor for such benefits
30 as are provided by the assignee.
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1 (3) If an individual receives basic loss benefits
2 through the assigned claims plan for any reason other than
3 because of the financial inability of an obligor to fulfill
4 its obligation or as a result of the provisions of section
5 202(a), all benefits or advantages that such individual
6 receives or is entitled to receive as a result of such
7 injury, other than life insurance benefits or benefits by way
8 of succession at death or in discharge of familial
9 obligations of support, shall be subtracted from loss in
10 calculating net loss.
11 (4) An assigned claim of an individual who does not
12 comply with the requirement of providing security for the
13 payment of basic restoration benefits, or of an individual as
14 to whom the security is invalidated because of his fraud or
15 willful misconduct, is subject to:
16 (A) all the maximum optional deductibles and
17 exclusions required to be offered; and
18 (B) a deduction in the amount of five hundred
19 dollars ($500) for each year or part thereof of the
20 period of his continuous failure to provide security,
21 applicable to any benefits otherwise payable except basic
22 benefits for allowable expense.
23 (5) An obligor, other than a self-insurer or obligated <--
24 government, who has provided allowable expense benefits
25 pursuant to section 202(a) may recover from the assigned
26 claims plan such amounts provided in excess of one hundred
27 thousand dollars ($100,000).
28 * * *
29 § 202. Basic loss benefits.
30 (a) Allowable expense limits.--Allowable expense, as defined
19770H1980B3886 - 6 -
1 in section 103 of this act shall be provided or the equivalent
2 in the form of a contract to provide for services required UP TO <--
3 AN AMOUNT OF ONE HUNDRED THOUSAND DOLLARS ($100,000) PER VICTIM.
4 There shall be no monetary limit on the amount of allowable <--
5 expense provided to an insured other than the limits stated in
6 the definition of "allowable expense" in section 103 of this
7 act. Any allowable expense benefits in excess of one hundred
8 thousand dollars ($100,000) provided by an obligor, other than a
9 self-insurer or an obligated government, under this subsection
10 shall be recoverable by said obligor from the assigned claims
11 plan pursuant to section 108 of this act. The claim resulting in
12 such benefits shall be continually serviced by said obligor.
13 * * *
14 § 203. COLLATERAL BENEFITS. <--
15 * * *
16 (D) AN OWNER OR OPERATOR OF A MOTOR VEHICLE WHO IS INSURED
17 UNDER A MEDICARE OR OTHER PROGRAM DESIGNED FOR RETIRED PERSONS
18 MAY ELECT TO HAVE HIS NO-FAULT INSURANCE BE PRIMARY.
19 § 207. ADDED LOSS BENEFITS.
20 [(A) MANDATORY OFFERING.--OBLIGORS PROVIDING SECURITY FOR
21 THE PAYMENT OF BASIC LOSS BENEFITS SHALL OFFER OR OBLIGATE
22 THEMSELVES TO PROVIDE ADDED LOSS BENEFITS FOR INJURY OR DAMAGE
23 ARISING OUT OF THE OWNERSHIP, MAINTENANCE, OR USE OF A MOTOR
24 VEHICLE, INCLUDING:
25 (1) LOSS EXCLUDED FROM BASIC LOSS BENEFITS BY LIMITS ON
26 ALLOWABLE EXPENSE, WORK LOSS, REPLACEMENT SERVICES LOSS, AND
27 SURVIVOR'S LOSS;
28 (2) BENEFITS FOR DAMAGE TO PROPERTY;
29 (3) BENEFITS FOR LOSS OF USE OF A MOTOR VEHICLE;
30 (4) BENEFITS FOR EXPENSE FOR REMEDIAL RELIGIOUS
19770H1980B3886 - 7 -
1 TREATMENT AND CARE;
2 (5) FOR PHYSICAL DAMAGE TO A MOTOR VEHICLE, A COVERAGE
3 FOR ALL COLLISION AND UPSET DAMAGE, SUBJECT TO AN OPTIONAL
4 DEDUCTIBLE; AND
5 (6) FOR ECONOMIC DETRIMENT, A COVERAGE FOR WORK LOSS
6 SUSTAINED BY A VICTIM IN EXCESS OF LIMITATIONS ON BASIC LOSS
7 BENEFITS FOR WORK LOSS.]
8 (A) MANDATORY OFFERING.--OBLIGORS PROVIDING SECURITY FOR THE
9 PAYMENT OF BASIC LOSS BENEFITS SHALL OFFER OR OBLIGATE
10 THEMSELVES TO PROVIDE ADDED LOSS BENEFITS FOR INJURY OR DAMAGE
11 ARISING OUT OF THE OWNERSHIP, MAINTENANCE, OR USE OF A MOTOR
12 VEHICLE, INCLUDING:
13 (1) INCREASED LIMITS ON WORK LOSS, REPLACEMENT SERVICES
14 LOSS, AND SURVIVOR'S LOSS AND INCREASED LIMITS UP TO AT LEAST
15 TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000) IN REGULAR
16 INCREMENTS ON ALLOWABLE EXPENSE;
17 (2) INCREASED LIMITS ON BODILY INJURY AND PROPERTY
18 DAMAGE LIABILITY;
19 (3) LOSS OF USE OF A MOTOR VEHICLE;
20 (4) COVERAGE FOR EXPENSE FOR REMEDIAL RELIGIOUS
21 TREATMENT AND CARE; AND
22 (5) FOR PHYSICAL DAMAGE TO A MOTOR VEHICLE, A COVERAGE
23 FOR ALL COLLISION AND UPSET DAMAGE AND COMPREHENSIVE MATERIAL
24 DAMAGE, SUBJECT TO AN OPTIONAL DEDUCTIBLE.
25 * * *
26 § 208. INELIGIBLE CLAIMANTS.
27 (A) CONVERTER.--
28 (1) [EXCEPT AS PROVIDED FOR ASSIGNED CLAIMS, A] A
29 CONVERTER OF A MOTOR VEHICLE IS INELIGIBLE TO RECEIVE NO-
30 FAULT BENEFITS, INCLUDING BENEFITS OTHERWISE DUE HIM AS A
19770H1980B3886 - 8 -
1 SURVIVOR, FROM ANY SOURCE OTHER THAN A CONTRACT OF INSURANCE
2 UNDER WHICH HE IS AN INSURED, FOR ANY INJURY ARISING OUT OF
3 THE MAINTENANCE OR USE OF THE CONVERTED VEHICLE. IF A
4 CONVERTER DIES FROM SUCH INJURIES, HIS SURVIVOR OR SURVIVORS
5 ARE NOT ENTITLED TO NO-FAULT BENEFITS FOR SURVIVOR'S LOSS
6 FROM ANY SOURCE OTHER THAN A CONTRACT OF INSURANCE UNDER
7 WHICH THE CONVERTER IS AN INSURED.
8 (2) FOR PURPOSES OF THIS SUBSECTION AND SUBSECTION (C)
9 OF SECTION 111 OF THIS ACT, AN INDIVIDUAL IS NOT A CONVERTER
10 OF A MOTOR VEHICLE IF HE USED IT IN THE GOOD FAITH BELIEF
11 THAT HE WAS LEGALLY ENTITLED TO DO SO.
12 (B) INTENTIONAL INJURIES.--
13 (1) AN INDIVIDUAL WHO INTENTIONALLY INJURES HIMSELF OR
14 ANOTHER INDIVIDUAL IS INELIGIBLE TO RECEIVE NO-FAULT BENEFITS
15 FOR INJURY ARISING OUT OF HIS ACTS, INCLUDING BENEFITS
16 OTHERWISE DUE HIM AS A SURVIVOR. IF AN INDIVIDUAL DIES AS A
17 RESULT OF INTENTIONALLY INJURING HIMSELF, HIS SURVIVOR OR
18 SURVIVORS ARE NOT ENTITLED TO NO-FAULT BENEFITS FOR
19 SURVIVOR'S LOSS. AN INDIVIDUAL INTENTIONALLY INJURES HIMSELF
20 OR ANOTHER INDIVIDUAL IF HE ACTS OR FAILS TO ACT FOR THE
21 PURPOSE OF CAUSING SUCH INJURY OR WITH KNOWLEDGE THAT SUCH
22 INJURY IS SUBSTANTIALLY CERTAIN TO FOLLOW. [AN] FOR PURPOSES
23 OF THIS SUBSECTION AND SECTION 111(C), AN INDIVIDUAL DOES NOT
24 INTENTIONALLY INJURE HIMSELF OR ANOTHER INDIVIDUAL:
25 (A) MERELY BECAUSE HIS ACT OR FAILURE TO ACT IS
26 INTENTIONAL OR DONE WITH HIS REALIZATION THAT IT CREATES
27 A GRAVE RISK OF CAUSING INJURY; OR
28 (B) IF THE ACT OR OMISSION CAUSING THE INJURY IS FOR
29 THE PURPOSE OF AVERTING BODILY HARM TO HIMSELF OR ANOTHER
30 INDIVIDUAL.
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1 [(2) FOR PURPOSES OF SECTION 111(C) AND SECTION 206 OF
2 THIS ACT, AN INDIVIDUAL DOES NOT INTENTIONALLY INJURE HIMSELF
3 OR ANOTHER INDIVIDUAL MERELY BECAUSE HIS ACT OR FAILURE TO
4 ACT IS INTENTIONAL OR DONE WITH HIS REALIZATION THAT IT
5 CREATES A GRAVE RISK OF HARM.]
6 (C) OWNERSHIP AND OCCUPANCY OF A MOTOR VEHICLE WITHOUT
7 SECURITY.--
8 FOR THE PURPOSE OF THIS SUBSECTION, AN INDIVIDUAL WHO AT
9 THE TIME OF THE ACCIDENT WAS THE OWNER OF A MOTOR VEHICLE
10 WHICH WAS REGISTERED OR OPERATED IN THIS COMMONWEALTH AND WAS
11 AN OCCUPANT OF SUCH MOTOR VEHICLE WITH RESPECT TO WHICH
12 SECURITY WAS NOT IN EFFECT AND THEREFORE WAS NOT IN
13 COMPLIANCE WITH SECTION 104 SHALL NOT BE ENTITLED TO NO-FAULT
14 BENEFITS. IF SUCH INDIVIDUAL DIES FROM SUCH INJURIES, HIS
15 SURVIVOR OR SURVIVORS ARE NOT ENTITLED TO NO-FAULT BENEFITS
16 FOR SURVIVOR'S LOSS.
17 (D) NON-RESIDENT OCCUPANTS.--
18 FOR THE PURPOSES OF THIS SUBSECTION, AN INDIVIDUAL WHO,
19 AT THE TIME OF THE ACCIDENT, WAS NOT A RESIDENT OF THIS
20 STATE, WAS AN OCCUPANT OF A MOTOR VEHICLE NOT REGISTERED IN
21 THIS STATE AND WITH RESPECT TO WHICH SECURITY WAS NOT IN
22 EFFECT AND THEREFORE WAS NOT IN COMPLIANCE WITH SECTION 104
23 SHALL NOT BE ENTITLED TO NO-FAULT BENEFITS. IF SUCH
24 INDIVIDUAL DIES FROM SUCH INJURIES, HIS SURVIVOR OR SURVIVORS
25 ARE NOT ENTITLED TO NO-FAULT BENEFITS FOR SURVIVOR'S LOSS.
26 § 504. POLICY REQUIREMENTS AND PREMIUM CHANGES.
27 (A) REQUIREMENTS FOR WRITING INSURANCE.--ALL INSURERS
28 LICENSED IN THIS COMMONWEALTH AND DESIRING TO QUALIFY TO WRITE
29 INSURANCE APPLICABLE TO MOTOR VEHICLE ACCIDENTS SUBSEQUENT TO
30 THE EFFECTIVE DATE OF THIS ACT, SHALL, AS A CONDITION OF
19770H1980B3886 - 10 -
1 QUALIFICATIONS, PREPARE AND FILE POLICY FORMS AND INSURANCE
2 RATES, FOR COVERAGES EFFECTED BY THIS ACT. SUCH POLICY FORMS AND
3 RATES SHALL BE FILED WITH THE OFFICE OF THE INSURANCE
4 COMMISSIONER OF THIS COMMONWEALTH WITHIN THREE MONTHS FROM
5 ENACTMENT HEREOF.
6 (B) INITIAL PREMIUM CHARGES.--THE PREMIUMS CHARGED BY ANY
7 INSURER DURING THE FIRST TWELVE-MONTH PERIOD FOLLOWING THE
8 EFFECTIVE DATE OF THIS ACT FOR BASIC LOSS INSURANCE BENEFITS
9 TOGETHER WITH SECURITY REQUIRED FOR THE PAYMENT OF TORT
10 JUDGMENTS SHALL NOT EXCEED EIGHTY-FIVE PER CENT (85%) OF THE
11 COMBINED PREMIUMS FOR:
12 (1) BODILY INJURY LIABILITY INSURANCE FOR THE SAME
13 LIMITS REQUIRED IN THIS ACT; AND
14 (2) MEDICAL PAYMENTS INSURANCE IN THE AMOUNT OF ONE
15 THOUSAND DOLLARS ($1,000) APPROVED BY THE COMMISSIONER FOR
16 ANY INSURER AND IN EFFECT ON THE DATE THIS ACT BECOMES
17 EFFECTIVE.
18 (C) LIMITATION ON PREMIUM INCREASES.--NO INSURER SHALL
19 INCREASE THE PREMIUM RATE OF AN OWNER OF A POLICY SOLELY BECAUSE
20 ONE OR MORE OF THE NAMED INSUREDS UNDER THE POLICY MADE A CLAIM
21 UNDER THE POLICY AND WAS PAID THEREON UNLESS IT IS DETERMINED
22 THAT THE NAMED INSURED WAS AT FAULT IN CONTRIBUTING TO THE
23 ACCIDENT GIVING RISE TO THE CLAIM. THE INSURANCE COMMISSIONER
24 SHALL PROMULGATE RULES AND REGULATIONS ESTABLISHING GUIDELINES
25 AND PROCEDURES FOR DETERMINING FAULT OF AN INSURED FOR THE
26 PURPOSES OF THIS SUBSECTION.
27 (D) REVIEW BY COMMISSIONER.--UPON ENACTMENT OF THIS <--
28 PROVISION THE COMMISSIONER SHALL PERIODICALLY REVIEW ALLOWABLE
29 EXPENSE LOSSES AND PROJECTED LOSS SAVINGS RESULTING FROM
30 PROVISIONS OF SECTION 202(A). IN NO CASE SHALL PREMIUM COSTS FOR
19770H1980B3886 - 11 -
1 MANDATORY INCREASED LIMITS OF OFFERINGS EXCEED WHAT MAY BE
2 ACTUARIALLY JUSTIFIABLE BASED UPON THE COMMISSIONER'S AFORESAID
3 REVIEW.
4 (D) REDUCTION OF RATES.--UPON THE EFFECTIVE DATE OF THIS <--
5 ACT, AND CONTINUING UNTIL SUCH TIME AS THE INSURANCE
6 COMMISSIONER SHALL MAKE A DETERMINATION PURSUANT TO THE ACT OF
7 JUNE 11, 1947 (P.L.538, NO.246), KNOWN AS "THE CASUALTY AND
8 SURETY RATE REGULATORY ACT" OF THE ADEQUACY OF RATES BEING
9 CHARGED FOR THE AMENDED BASIC LOSS BENEFITS, BUT NOT IN EXCESS
10 OF TWELVE MONTHS, THE RATE APPLICABLE FOR BASIC LOSS BENEFITS
11 INSURANCE SHALL BE REDUCED TEN PERCENT (10%).
12 Section 2 3. This act shall take effect in 60 90 days. <--
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