PRINTER'S NO. 2757
No. 2122 Session of 1988
INTRODUCED BY O'DONNELL, JANUARY 27, 1988
REFERRED TO COMMITTEE ON INSURANCE, JANUARY 27, 1988
AN ACT
1 Amending the act of June 5, 1968 (P.L.140, No.78), entitled "An
2 act regulating the writing, cancellation of or refusal to
3 renew policies of automobile insurance; and imposing powers
4 and duties on the Insurance Commissioner therefor," further
5 providing for cancellation of policies; and providing a lien
6 for unpaid premiums.
7 The General Assembly of the Commonwealth of Pennsylvania
8 hereby enacts as follows:
9 Section 1. Section 3 of the act of June 5, 1968 (P.L.140,
10 No.78), entitled "An act regulating the writing, cancellation of
11 or refusal to renew policies of automobile insurance; and
12 imposing powers and duties on the Insurance Commissioner
13 therefor," is amended by adding a subsection to read:
14 Section 3. * * *
15 (b.1) No insurer shall cancel a policy of automobile
16 insurance for nonpayment of premium during the required
17 insurance period, as described in section 4.2. Procedure for the
18 collection of unpaid insurance premiums shall be as provided in
19 the act of August 24, 1963 (P.L.1175, No.497), known as the
1 "Mechanics' Lien Law of 1963," insofar as practicable.
2 * * *
3 Section 2. Section 4 of the act, amended October 5, 1978
4 (P.L.1060, No.248), is amended to read:
5 Section 4. No insurer shall cancel a policy except for one
6 or more of the following specified reasons:
7 [(1) Nonpayment of premium;]
8 (2) The driver's license or motor vehicle registration of
9 the named insured has been under suspension or revocation during
10 the policy period; the applicability of this reason to one who
11 either is a resident in the same household or who customarily
12 operates an automobile insured under the policy shall be proper
13 reason for the insurer thereafter excluding such individual from
14 coverage under the policy, but not for cancelling the policy; or
15 (3) A determination that the insured has concealed a
16 material fact, or has made a material allegation contrary to
17 fact, or has made a misrepresentation of a material fact and
18 that such concealment, allegation or misrepresentation was
19 material to the acceptance of the risk by the insurer.
20 Section 3. The act is amended by adding a section to read:
21 Section 4.2. (a) The registrant of a motor vehicle who is
22 required by 75 Pa.C.S. § 1782 (relating to manner of providing
23 proof of financial responsibility) to provide financial
24 responsibility shall affix to the vehicle, in the manner
25 prescribed by the Department of Transportation pursuant to
26 subsection (b), an identifying sticker showing that the vehicle
27 is covered by the required financial responsibility. In criminal
28 proceedings under this section, the trier of fact may infer from
29 the absence of a sticker that the owner of the vehicle does not
30 have the required insurance. The term "sticker" means that item
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1 described in the department regulations promulgated pursuant to
2 subsection (b), when the item is whole, intact, undefaced and
3 legible.
4 (b) The form and content of the sticker required by
5 subsection (a) and the location in which they shall be affixed
6 shall be prescribed in department regulations.
7 (c) Each insurer of a vehicle shall issue a sticker for the
8 vehicle covering a period of one year.
9 (d) All stickers issued pursuant to this section shall be
10 the property of the issuer and shall be affixed by the
11 registrant to the vehicle only during such time as the required
12 financial responsibility remains in full force and effect. Every
13 registrant shall immediately remove from the vehicle any sticker
14 representing financial responsibility which he knows or has
15 reason to know has been terminated, canceled, impaired or is
16 otherwise ineffective. Such knowledge may be inferred from
17 evidence of the notice required in subsection (e).
18 (e) (1) Every insurer which cancels any contract of
19 insurance on any vehicle insured by it prior to the normal
20 expiration date of the sticker which it has furnished the owner
21 of the vehicle shall notify the insured of the date the sticker
22 shall no longer be in full force and effect, and the insured
23 shall remove it from the vehicle. For purposes of this section,
24 notice shall be given by the insurer or its agents in the manner
25 required under department regulations. Letters, notices and
26 proofs of mailing from the insurer or its agents to the insured
27 shall be admissible, notwithstanding rules of evidence to the
28 contrary. No premium refund shall be given until the unexpired
29 sticker is returned to the insurance company or its agent.
30 (2) If the insured cancels coverage prior to the expiration
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1 of any sticker which has been furnished by the insurer, the
2 insured shall remove the unexpired sticker from the vehicle and
3 return the sticker to the insurer. The insurer shall not be
4 obligated to refund to the insured any prepaid premium unless
5 the unexpired sticker has been returned to the insurer or its
6 agent, and such insurance shall remain in force until the
7 sticker is received by the insurer.
8 (f) Every registrant meeting the security requirements of
9 this act through becoming a qualified self-insurer, pursuant to
10 75 Pa.C.S. § 1787 (relating to self-insurance), shall obtain a
11 sticker directly from the department.
12 (g) (1) The registrant of any vehicle who fails to display
13 the sticker as required under this section commits a summary
14 offense and shall, upon conviction, be sentenced to pay a fine
15 of not less than $10 nor more than $50.
16 (2) If the registrant of a motor vehicle fails to maintain
17 financial responsibility on the motor vehicle, the operating
18 privilege of the registrant shall be suspended for a period of
19 three months. A registrant who fails to maintain financial
20 responsibility on the motor vehicle commits a summary offense
21 and shall, upon conviction, be sentenced to pay a fine of not
22 less than $500 nor more than $5,000, or to imprisonment for not
23 less than two days nor more than 90 days, or both. For a second
24 or subsequent conviction, the registrant shall be sentenced to
25 pay a fine of not less than $1,000 nor more than $10,000 or to
26 imprisonment for not less than ten days, nor more than 180 days,
27 or both.
28 Section 4. This act shall take effect in 60 days.
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