PRINTER'S NO. 1486
No. 1074 Session of 2004
INTRODUCED BY STACK, KUKOVICH, EARLL, MUSTO, TARTAGLIONE, LOGAN,
COSTA, WOZNIAK, FERLO, O'PAKE, M. WHITE, BOSCOLA, KASUNIC AND
C. WILLIAMS, MARCH 25, 2004
REFERRED TO BANKING AND INSURANCE, MARCH 25, 2004
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," providing for the return of
12 unearned premium.
13 The General Assembly of the Commonwealth of Pennsylvania
14 hereby enacts as follows:
15 Section 1. The act of May 17, 1921 (P.L.682, No.284), known
16 as The Insurance Company Law of 1921, is amended by adding a
17 section to read:
18 Section 353.1. Return of Unearned Premium.--(a) Unearned
19 premium must be returned to the insured not later than ten (10)
20 business days after the effective date of termination of a
21 policy when canceled in midterm by the insurer.
22 (b) Unearned premium must be returned to the insured not
1 later than thirty (30) days after the effective date of
2 termination of a policy when canceled in midterm by the insured.
3 (c) The unearned premium shall be returned to the insured on
4 an estimated basis where the amount of premium to be returned
5 cannot be calculated precisely within the required time period
6 for return of premium because the policy was written on the
7 basis of an estimated premium or the policy was issued subject
8 to a premium audit. Upon the insurer's completion of computation
9 of the exact premium to be returned, an additional return
10 premium or charge shall be made to the named insured or insureds
11 within fifteen (15) days of the final computation.
12 (d) This section shall not apply to policies written on a
13 retrospective rating plan.
14 (e) Insurers failing to comply with this section shall be
15 subject to a fine of two hundred fifty dollars ($250) or the
16 amount of the unearned premium, whichever is greater.
17 (f) The term "insurance company" as used in this section
18 shall mean an insurance company, association or exchange or any
19 other entity subject to the jurisdiction of the Insurance
20 Department.
21 Section 2. The addition of section 353.1 of the act shall
22 apply to policies canceled on or after the effective date of
23 this act.
24 Section 3. This act shall take effect in 60 days.
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