PRINTER'S NO. 125
No. 113 Session of 1979
INTRODUCED BY J. L. WRIGHT, JR., FEBRUARY 6, 1979
REFERRED TO COMMITTEE ON INSURANCE, FEBRUARY 7, 1979
AN ACT 1 Amending the act of May 17, 1921 (P.L.682, No.284), entitled "An 2 act relating to insurance; amending, revising, and 3 consolidating the law providing for the incorporation of 4 insurance companies, and the regulation, supervision, and 5 protection of home and foreign insurance companies, Lloyds 6 associations, reciprocal and inter-insurance exchanges, and 7 fire insurance rating bureaus, and the regulation and 8 supervision of insurance carried by such companies, 9 associations, and exchanges, including insurance carried by 10 the State Workmen's Insurance Fund; providing penalties; and 11 repealing existing laws," adding certain requirements before 12 which members of certain mutual insurance companies shall be 13 liable to assessment. 14 The General Assembly of the Commonwealth of Pennsylvania 15 hereby enacts as follows: 16 Section 1. The act of May 17, 1921 (P.L.682, No.284), known 17 as "The Insurance Company Law of 1921," is amended by adding 18 sections to read: 19 Section 808.1. Requirements to Issue Assessable Policies on 20 Automobiles.--Prior to the sale of an assessable policy 21 providing any type of insurance upon automobiles, the insurance 22 company representative or broker shall explain the definition 23 and responsibilities of purchasing an assessable policy to the 24 applicant. The company representative or broker shall secure and
1 forward to the company a signed statement from the applicant 2 that he understands the possible consequences of the assessable 3 policy. The statement shall be in such a form as shall be 4 prescribed and approved by the Insurance Commissioner. A copy of 5 the signed statement shall be attached to the policy. 6 Section 808.2. Penalties.--(a) Any mutual company, or any 7 officer or agent thereof, or any broker, which or who issues or 8 delivers to any person in this Commonwealth any policy in 9 violation of the provisions of section 808.1, or forges an 10 applicant's signature on the form described in section 808.1, 11 shall be guilty of a misdemeanor, and, upon conviction thereof, 12 shall be sentenced to pay a fine of not more than three hundred 13 dollars ($300) for each offense. 14 (b) The Insurance Commissioner may, in his discretion, take, 15 against the offending party, any one or more of the following 16 courses of action: 17 (1) Revoke the license of any company, corporation, 18 association, or other insurer, or of the agent thereof, which or 19 who violates any of the said provisions. 20 (2) Impose a penalty of not more than one thousand dollars 21 ($1,000) for each act of violation of any provisions of section 22 808.1. 23 (c) Any fines collected under this section shall be 24 allocated to the applicable guaranty fund for such use as the 25 directors of such fund may deem appropriate. 26 (d) Before the Insurance Commissioner shall take any action 27 as authorized above, he shall give written notice to the person, 28 company, association, accused of violating the law, stating 29 specifically the nature of alleged violations, and fixing a time 30 and place, at least ten days thereafter, when a hearing of the 19790H0113B0125 - 2 -
1 matter shall be held. After such hearing or upon failure of the 2 accused to appear at such hearing, the Insurance Commissioner 3 shall impose such of the above penalties, as he deems advisable. 4 When the Insurance Commissioner shall have taken any action as 5 above set forth, the party aggrieved may appeal to the 6 Commonwealth Court. 7 Section 808.3. Assessment.--No assessment may be made on any 8 policy issued in violation of the provisions of section 808.1. 9 Section 808.4. Binder.--Nothing in the provisions of 10 sections 808.1, 808.2 and 808.3 shall be construed to bar the 11 extension of insurance coverage by oral binder, provided that 12 assessable policies extended by oral binder must comply with the 13 provisions of sections 808.1, 808.2 and 808.3. 14 Section 2. This act shall take effect in 60 days. A5L37RZ/19790H0113B0125 - 3 -