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                                 SENATE AMENDED
        PRIOR PRINTER'S NOS. 1448, 2237, 2326         PRINTER'S NO. 4085

THE GENERAL ASSEMBLY OF PENNSYLVANIA


HOUSE BILL

No. 1150 Session of 2007


        INTRODUCED BY D. O'BRIEN, DeWEESE, PALLONE, PHILLIPS, RAPP,
           SCAVELLO, STURLA, BAKER, BASTIAN, BOYD, BROOKS, CALTAGIRONE,
           CARROLL, CLYMER, COHEN, CONKLIN, DALEY, DALLY, DeLUCA,
           DePASQUALE, DONATUCCI, EVERETT, FREEMAN, GEIST, GEORGE,
           GIBBONS, GINGRICH, GOODMAN, GRUCELA, HALUSKA, HARKINS,
           HENNESSEY, HERSHEY, JAMES, JOSEPHS, KAUFFMAN, W. KELLER,
           KENNEY, KIRKLAND, KOTIK, KULA, LEACH, LENTZ, MAHONEY,
           MANDERINO, MANN, MARKOSEK, MARSHALL, McILHATTAN, MOYER, MURT,
           MUSTIO, McGEEHAN, MYERS, NAILOR, M. O'BRIEN, PASHINSKI,
           PAYNE, PETRONE, PRESTON, READSHAW, REICHLEY, ROSS, SCHRODER,
           SEIP, SHAPIRO, SHIMKUS, M. SMITH, SOLOBAY, SONNEY, STABACK,
           STEIL, SURRA, TANGRETTI, TRUE, VEREB, WATSON, J. WHITE,
           WOJNAROSKI, YUDICHAK, MACKERETH, MANTZ, BARRAR, HORNAMAN,
           CAUSER, WALKO, HELM, MELIO, DENLINGER, BRENNAN, RAMALEY,
           DiGIROLAMO, GERGELY, M. KELLER, FRANKEL, FABRIZIO,
           YOUNGBLOOD, REED, ROAE, CURRY, K SMITH, GALLOWAY, SIPTROTH,
           RUBLEY, SAMUELSON AND BOBACK, APRIL 30, 2007

        SENATOR D. WHITE, BANKING AND INSURANCE, IN SENATE, AS AMENDED,
           JUNE 26, 2008

                                     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, in health and accident
    12     insurance, for autism spectrum disorders coverage and for
    13     treatment of autism spectrum disorders; and further providing
    14     for quality health care procedures.
    15  AMENDING THE ACT OF MAY 17, 1921 (P.L.682, NO.284), ENTITLED "AN  <--
    16     ACT RELATING TO INSURANCE; AMENDING, REVISING, AND
    17     CONSOLIDATING THE LAW PROVIDING FOR THE INCORPORATION OF


     1     INSURANCE COMPANIES, AND THE REGULATION, SUPERVISION, AND
     2     PROTECTION OF HOME AND FOREIGN INSURANCE COMPANIES, LLOYDS
     3     ASSOCIATIONS, RECIPROCAL AND INTER-INSURANCE EXCHANGES, AND
     4     FIRE INSURANCE RATING BUREAUS, AND THE REGULATION AND
     5     SUPERVISION OF INSURANCE CARRIED BY SUCH COMPANIES,
     6     ASSOCIATIONS, AND EXCHANGES, INCLUDING INSURANCE CARRIED BY
     7     THE STATE WORKMEN'S INSURANCE FUND; PROVIDING PENALTIES; AND
     8     REPEALING EXISTING LAWS," IN PRELIMINARY PROVISIONS, FURTHER
     9     PROVIDING FOR EFFECT OF ACT ON EXISTING LAWS; IN LIFE
    10     INSURANCE, FURTHER PROVIDING FOR ADDITIONAL INVESTMENT
    11     AUTHORITY FOR SUBSIDARIES; IN CASUALTY INSURANCE, PROVIDING
    12     FOR AUTISM SPECTRUM DISORDERS COVERAGE AND FOR COLORECTAL
    13     CANCER SCREENINGS COVERAGE; IN INSURANCE HOLDING COMPANIES,
    14     FURTHER PROVIDING FOR DEFINITIONS, FOR ACQUISITION OF CONTROL
    15     OF OR MERGER WITH DOMESTIC INSURER, FOR ACQUISITIONS
    16     INVOLVING INSURERS NOT OTHERWISE COVERED AND FOR STANDARDS
    17     AND MANAGEMENT OF AN INSURER WITHIN A HOLDING COMPANY SYSTEM;
    18     PROVIDING FOR COMMITTEE REVIEW; ESTABLISHING THE INSURANCE
    19     RESTRUCTURING RESTRICTED RECEIPT ACCOUNT; PROVIDING FOR
    20     COMMUNITY HEALTH REINVESTMENT; AND MAKING A RELATED REPEAL.

    21     The General Assembly of the Commonwealth of Pennsylvania
    22  hereby enacts as follows:
    23     Section 1.  The act of May 17, 1921 (P.L.682, No.284), known   <--
    24  as The Insurance Company Law of 1921, is amended by adding
    25  sections to read:
    26     Section 635.2.  Autism Spectrum Disorders Coverage.--(a)  A
    27  health insurance policy or government program shall provide to
    28  covered individuals or recipients under twenty-one years of age
    29  coverage for the diagnosis of autism spectrum disorders and for
    30  the treatment of autism spectrum disorders. To the extent that
    31  the diagnosis and treatment of autism spectrum disorders are not
    32  already covered by the health insurance policy or government
    33  program, coverage under this section shall be included in health
    34  insurance policies and contracts under a government program
    35  which are delivered, executed, issued, amended, adjusted or
    36  renewed on or after one hundred eighty days from the effective
    37  date of this section, except that the applicability of this
    38  section to government programs shall be contingent upon Federal
    39  approval if necessary.

    20070H1150B4085                  - 2 -     

     1     (b)  Except for the Commonwealth's medical assistance program
     2  established under the act of June 13, 1967 (P.L.31, No.21),
     3  known as the "Public Welfare Code," and except for the
     4  Children's Health Care Program established under this act,
     5  coverage provided under this section shall be subject to a
     6  maximum benefit of thirty-six thousand dollars ($36,000) per
     7  year but shall not be subject to any limits on the number of
     8  visits to an autism service provider. After December 30, 2009,
     9  the Insurance Commissioner shall, on an annual basis, adjust the
    10  maximum benefit for inflation using the Medical care component
    11  of the United States Department of Labor Consumer Price Index
    12  For All Urban Consumers (CPI-U). The commissioner shall submit
    13  the adjusted maximum benefit to the Legislative Reference Bureau
    14  for publication annually in the Pennsylvania Bulletin no later
    15  than April 1 of each calendar year, and the published adjusted
    16  maximum benefit shall be applicable in the following calendar
    17  year to health insurance policies and government programs
    18  subject to this act. Payments made by an insurer on behalf of a
    19  covered individual for any care, treatment, intervention,
    20  service or item, the provision of which was for the treatment of
    21  a health condition unrelated to the covered individual's autism
    22  spectrum disorder, shall not be applied toward any maximum
    23  benefit established under this subsection.
    24     (c)  Coverage under this section shall be subject to
    25  copayment, deductible and coinsurance provisions of a health
    26  insurance policy or government program to the extent that other
    27  medical services covered by the policy or government program are
    28  subject to these provisions.
    29     (d)  This section shall not be construed as limiting benefits
    30  which are otherwise available to an individual under a health
    20070H1150B4085                  - 3 -     

     1  insurance policy.
     2     (e)  This section shall not apply to the following types of
     3  policies:
     4     (1)  Accident only.
     5     (2)  Limited benefit.
     6     (3)  Credit.
     7     (4)  Dental.
     8     (5)  Vision.
     9     (6)  Specified disease.
    10     (7)  Medicare supplement.
    11     (8)  CHAMPUS (Civilian Health and Medical Program of the
    12  Uniformed Services) supplement.
    13     (9)  Long-term care or disability income.
    14     (10)  Workers' compensation.
    15     (11)  Automobile medical payment.
    16     (12)  Hospital indemnity.
    17     (f)  As used in this section:
    18     (1)  "Applied behavioral analysis" means the design,
    19  implementation and evaluation of environmental modifications,
    20  using behavioral stimuli and consequences, to produce socially
    21  significant improvement in human behavior, including the use of
    22  direct observation, measurement and functional analysis of the
    23  relations between environment and behavior.
    24     (2)  "Autism service provider" means any person, entity or
    25  group that provides treatment of autism spectrum disorders.
    26     (3)  "Autism spectrum disorders" means any of the pervasive
    27  developmental disorders as defined by the most recent edition of
    28  the Diagnostic and Statistical Manual of Mental Disorders (DSM),
    29  including autistic disorder, Asperger's disorder and pervasive
    30  developmental disorder not otherwise specified.
    20070H1150B4085                  - 4 -     

     1     (4)  "Diagnosis of autism spectrum disorders" means medically
     2  necessary assessments, evaluations or tests in order to diagnose
     3  whether an individual has an autism spectrum disorder.
     4     (5)  "Evidenced-based research" means research that applies
     5  rigorous, systematic and objective procedures to obtain valid
     6  knowledge relevant to autism spectrum disorders.
     7     (6)  "Government program" means any of the following:
     8     (i)  The Commonwealth's medical assistance program
     9  established under the act of June 13, 1967 (P.L.31, No.21),
    10  known as the "Public Welfare Code."
    11     (ii)  The adult basic coverage insurance program established
    12  under Chapter 13 of the act of June 26, 2001 (P.L.755, No.77),
    13  known as the "Tobacco Settlement Act."
    14     (iii)  The Children's Health Care Program established under
    15  this act.
    16     (7)  "Health insurance policy" means any group health,
    17  sickness or accident policy or subscriber contract or
    18  certificate issued by an insurance entity subject to one of the
    19  following:
    20     (i)  This act.
    21     (ii)  The act of December 29, 1972 (P.L.1701, No.364), known
    22  as the "Health Maintenance Organization Act."
    23     (iii)  The act of May 18, 1976 (P.L.123, No.54), known as the
    24  "Individual Accident and Sickness Insurance Minimum Standards
    25  Act."
    26     (iv)  40 Pa.C.S. Ch. 61 (relating to hospital plan
    27  corporations) or 63 (relating to professional health services
    28  plan corporations).
    29     (8)  "Medically necessary" means any care, treatment,
    30  intervention, service or item which is prescribed, provided or
    20070H1150B4085                  - 5 -     

     1  ordered by a licensed physician, licensed psychologist or
     2  certified registered nurse practitioner in accordance with
     3  accepted standards of practice and which will, or is reasonably
     4  expected to, do any of the following:
     5     (i)  Prevent the onset of an illness, condition, injury or
     6  disability.
     7     (ii)  Reduce or ameliorate the physical, mental or
     8  developmental effects of an illness, condition, injury or
     9  disability.
    10     (iii)  Assist to achieve or maintain maximum functional
    11  capacity in performing daily activities, taking into account
    12  both the functional capacity of the recipient and those
    13  functional capacities that are appropriate of recipients of the
    14  same age.
    15     (9)  "Pharmacy care" means medications prescribed by a
    16  licensed physician or certified registered nurse practitioner
    17  and any health-related services deemed medically necessary to
    18  determine the need or effectiveness of the medications.
    19     (10)  "Psychiatric care" means direct or consultative
    20  services provided by a psychiatrist licensed in the state in
    21  which the psychiatrist practices.
    22     (11)  "Psychological care" means direct or consultative
    23  services provided by a psychologist licensed in the state in
    24  which the psychologist practices.
    25     (12)  "Rehabilitative care" means professional, counseling
    26  and guidance services and treatment programs, including applied
    27  behavioral analysis, which are necessary to develop, maintain
    28  and restore, to the maximum extent practicable, the functioning
    29  of an individual.
    30     (13)  "Therapeutic care" means services provided by licensed
    20070H1150B4085                  - 6 -     

     1  or certified speech therapists, occupational therapists or
     2  physical therapists.
     3     (14)  "Treatment for autism spectrum disorders" shall include
     4  the following care prescribed, provided or ordered for an
     5  individual diagnosed with an autism spectrum disorder by a
     6  licensed physician, licensed psychologist or certified
     7  registered nurse practitioner if the care is determined to be
     8  medically necessary:
     9     (i)  Psychiatric care.
    10     (ii) Psychological care.
    11     (iii)  Rehabilitative care.
    12     (iv)  Therapeutic care.
    13     (v)  Pharmacy care.
    14     (vi)  Any care, treatment, intervention, service or item for
    15  individuals with an autism spectrum disorder which is determined
    16  by the Department of Public Welfare, based upon its review of
    17  best practices or evidenced-based research, to be medically
    18  necessary and which is published in the Pennsylvania Bulletin.
    19  Any such care, treatment, intervention, service or item which
    20  was not previously covered shall be included in any health
    21  insurance policy or contract under a government program
    22  delivered, issued, executed or renewed on or after 120 days
    23  following the date of its publication in the Pennsylvania
    24  Bulletin.
    25     (g)  The Department of Public Welfare shall promulgate
    26  regulations establishing standards for qualified autism service
    27  providers. For purposes of implementing this section, and
    28  notwithstanding any other provision of law, the Secretary of
    29  Public Welfare shall promulgate regulations pursuant to section
    30  204(1)(iv) of the act of July 31, 1968 (P.L.769, No.240),
    20070H1150B4085                  - 7 -     

     1  referred to as the Commonwealth Documents Law, which shall, for
     2  120 days from the effective date of this act, be exempt from all
     3  of the following acts:
     4     (1)  Section 205 of the Commonwealth Documents Law.
     5     (2)  Section 204(b) of the act of October 15, 1980 (P.L.950,
     6  No.164), known as the "Commonwealth Attorneys Act."
     7     (3)  The act of June 25, 1982 (P.L.633, No.181), known as the
     8  "Regulatory Review Act."
     9  Once the regulations are promulgated, payment for the treatment
    10  of autism spectrum disorders covered under this section shall
    11  only be made to autism service providers who meet the standards.
    12     Section 2116.1.  Treatment of Autism Spectrum Disorders.--(a)
    13  Except for inpatient services, if an enrollee has obtained
    14  authorization through utilization review from a managed care
    15  plan, government program or a licensed insurer to receive any
    16  care, treatment, intervention, service or item for an autism
    17  spectrum disorder, the authorization shall be valid for twelve
    18  months, unless the enrollee's primary care provider determines
    19  that an earlier re-evaluation is necessary in order to
    20  adequately address the clinical needs of the enrollee.
    21     (a.1)  In applying subsection (a), if within the twelve-month
    22  period following the effective date of this section a health
    23  insurance policy is delivered, issued, executed or renewed and
    24  at the time of such delivery, issuance, execution or renewal an
    25  enrollee is receiving any inpatient or outpatient care,
    26  treatment, intervention, service or item for an autism spectrum
    27  disorder pursuant to an authorization obtained from a government
    28  program, and the care, treatment, intervention, service or item
    29  is covered under the health insurance policy being delivered,
    30  issued, executed or renewed, the authorization from the
    20070H1150B4085                  - 8 -     

     1  government program shall remain valid for the remainder of the
     2  existing authorization period as to any managed care plan or
     3  private insurer and such authorization shall be honored by any
     4  managed care plan or private insurer providing coverage to the
     5  enrollee.
     6     (b)  If a health care provider provides care, treatments,
     7  interventions, services or items to an enrollee, the coverage of
     8  which is required under section 635.2 and the provider is
     9  enrolled in the Commonwealth's medical assistance program but is
    10  not a network provider with the enrollee's private insurance
    11  plan, the provider shall be reimbursed under the terms and
    12  conditions applicable to the plan's participating providers.
    13  This requirement shall not be subject to any time limitation or
    14  transition period, but shall otherwise be in accord with all
    15  terms applicable to nonparticipating providers under the managed
    16  care continuity of care provisions then in effect.
    17     Section 2.  Section 2121 of the act, added June 17, 1998
    18  (P.L.464, No.68), is amended to read:
    19     Section 2121.  Procedures.--(a)  A managed care plan shall
    20  establish a credentialing process to enroll qualified health
    21  care providers and create an adequate provider network. The
    22  process shall be approved by the department and shall include
    23  written criteria and procedures for initial enrollment, renewal,
    24  restrictions and termination of credentials for health care
    25  providers.
    26     (b)  [The] Except as provided under subsection (b.1), the
    27  department shall establish credentialing standards for managed
    28  care plans. The department may adopt nationally recognized
    29  accrediting standards to establish the credentialing standards
    30  for managed care plans.
    20070H1150B4085                  - 9 -     

     1     (b.1)  Pursuant to section 635.2(g), the Department of Public
     2  Welfare shall establish standards to be utilized by managed care
     3  plans for the credentialing of health care providers providing
     4  care, treatments, interventions, services or items to enrollees
     5  for an autism spectrum disorder as defined under section 635.2.
     6  In addition, the department may require that a managed care plan
     7  grant credentials to any health care provider whom the
     8  Department of Public Welfare determines meets or exceeds the
     9  Department of Public Welfare's credentialing standards.
    10     (c)  A managed care plan shall submit a report to the
    11  department regarding its credentialing process at least every
    12  two (2) years or as may otherwise be required by the department.
    13     (d)  A managed care plan shall disclose relevant
    14  credentialing criteria and procedures to health care providers
    15  that apply to participate or that are participating in the
    16  plan's provider network. A managed care plan shall also disclose
    17  relevant credentialing criteria and procedures pursuant to a
    18  court order or rule. Any individual providing information during
    19  the credentialing process of a managed care plan shall have the
    20  protections set forth in the act of July 20, 1974 (P.L.564,
    21  No.193), known as the "Peer Review Protection Act."
    22     (e)  No managed care plan shall exclude or terminate a health
    23  care provider from participation in the plan due to any of the
    24  following:
    25     (1)  The health care provider engaged in any of the
    26  activities set forth in section 2113(c).
    27     (2)  The health care provider has a practice that includes a
    28  substantial number of patients with expensive medical
    29  conditions.
    30     (3)  The health care provider objects to the provision of or
    20070H1150B4085                 - 10 -     

     1  refuses to provide a health care service on moral or religious
     2  grounds.
     3     (f)  If a managed care plan denies enrollment or renewal of
     4  credentials to a health care provider, the managed care plan
     5  shall provide the health care provider with written notice of
     6  the decision. The notice shall include a clear rationale for the
     7  decision.
     8     Section 3.  This act shall take effect as follows:
     9         (1)  The following provisions shall take effect in 90
    10     days:
    11             (i)  The addition of section 635.2(f) and (g) of the
    12         act.
    13             (ii)  The amendment of section 2121 of the act.
    14             (iii)  This section.
    15         (2)  The remainder of this act shall take effect in 210
    16     days.
    17     SECTION 1.  SECTION 108 OF THE ACT OF MAY 17, 1921 (P.L.682,   <--
    18  NO.284), KNOWN AS THE INSURANCE COMPANY LAW OF 1921, IS AMENDED
    19  TO READ:
    20     SECTION 108.  EFFECT OF ACT ON EXISTING LAWS.--THE PROVISIONS
    21  OF THIS ACT, SO FAR AS THEY ARE THE SAME AS THOSE OF EXISTING
    22  LAWS, SHALL BE CONSTRUED AS A CONTINUATION OF SUCH LAWS AND NOT
    23  AS NEW ENACTMENTS. THE REPEAL BY THIS ACT OF ANY PROVISION OF
    24  LAW SHALL NOT REVIVE ANY LAW HERETOFORE REPEALED OR SUPERSEDED,
    25  NOR SHALL SUCH REPEAL AFFECT ANY ACT DONE, LIABILITY INCURRED,
    26  OR ANY RIGHT ACCRUED OR VESTED, OR ANY SUIT OR PROSECUTION
    27  PENDING OR TO BE INSTITUTED TO ENFORCE ANY RIGHT OR PENALTY OR
    28  PUNISH ANY OFFENSE UNDER THE AUTHORITY OF THE REPEALED LAWS. THE
    29  PROVISIONS OF THIS ACT SHALL NOT LIMIT THE JURISDICTION AND
    30  AUTHORITY OF THE OFFICE OF ATTORNEY GENERAL, INCLUDING, BUT NOT
    20070H1150B4085                 - 11 -     

     1  LIMITED TO, THE JURISDICTION AND AUTHORITY GRANTED PURSUANT TO
     2  THE ACT OF OCTOBER 15, 1980 (P.L.950, NO.164), KNOWN AS THE
     3  "COMMONWEALTH ATTORNEYS ACT."
     4     SECTION 2.  SECTION 405.2(C) OF THE ACT, AMENDED DECEMBER 21,
     5  1995 (P.L.714, NO.79), IS AMENDED TO READ:
     6     SECTION 405.2.  ADDITIONAL INVESTMENT AUTHORITY FOR
     7  SUBSIDIARIES.--* * *
     8     (C)  (1)  AT NO TIME SHALL A DOMESTIC LIFE INSURANCE COMPANY
     9  MAKE AN INVESTMENT IN ANY SUBSIDIARY WHICH WILL BRING THE
    10  AGGREGATE VALUE OF ITS INVESTMENTS, AS DETERMINED FOR ANNUAL
    11  STATEMENT PURPOSES BUT NOT IN EXCESS OF COST, IN ALL
    12  SUBSIDIARIES UNDER THIS SUBSECTION TO AN AMOUNT IN EXCESS OF
    13  [TEN] FIFTEEN PER CENTUM [(10%)] (15%) OF ITS TOTAL ADMITTED
    14  ASSETS AS OF THE IMMEDIATELY PRECEDING THIRTY-FIRST DAY OF
    15  DECEMBER. IN DETERMINING THE AMOUNT OF INVESTMENTS OF ANY
    16  DOMESTIC LIFE INSURANCE COMPANY IN SUBSIDIARIES FOR PURPOSES OF
    17  THIS SUBSECTION, THERE SHALL BE INCLUDED INVESTMENTS MADE
    18  DIRECTLY BY SUCH INSURANCE COMPANY AND, IF SUCH INVESTMENT IS
    19  MADE BY ANOTHER SUBSIDIARY, THEN TO THE EXTENT THAT FUNDS FOR
    20  SUCH INVESTMENTS ARE PROVIDED BY THE INSURANCE COMPANY FOR SUCH
    21  PURPOSE.
    22     (1.1)  A DOMESTIC LIFE INSURANCE COMPANY MAY INCREASE THE
    23  AGGREGATE VALUE OF ITS INVESTMENTS, AS DETERMINED FOR ANNUAL
    24  STATEMENT PURPOSES, BUT NOT IN EXCESS OF COST, IN ALL
    25  SUBSIDIARIES UNDER THIS SUBSECTION TO AN AMOUNT IN EXCESS OF
    26  FIFTEEN PER CENTUM (15%) OF ITS TOTAL ADMITTED ASSETS AS OF THE
    27  IMMEDIATELY PRECEDING THIRTY-FIRST DAY OF DECEMBER IF THE
    28  INCREASE HAS BEEN APPROVED IN WRITING BY THE INSURANCE
    29  DEPARTMENT PRIOR TO MAKING THE INVESTMENT. IF THE INSURANCE
    30  DEPARTMENT DOES APPROVE OR DISAPPROVE THE INCREASED INVESTMENT
    20070H1150B4085                 - 12 -     

     1  WITHIN THIRTY (30) DAYS OF RECEIPT OF A REQUEST FOR APPROVAL,
     2  THE INCREASED INVESTMENT SHALL BE DEEMED APPROVED. IN
     3  DETERMINING THE AMOUNT OF INVESTMENTS OF ANY DOMESTIC LIFE
     4  INSURANCE COMPANY IN SUBSIDIARIES FOR PURPOSES OF THIS
     5  SUBSECTION, THERE SHALL BE INCLUDED INVESTMENTS MADE DIRECTLY BY
     6  SUCH INSURANCE COMPANY AND, IF SUCH INVESTMENT IS MADE BY
     7  ANOTHER SUBSIDIARY, THEN TO THE EXTENT THAT FUNDS FOR SUCH
     8  INVESTMENTS ARE PROVIDED BY THE INSURANCE COMPANY FOR SUCH
     9  PURPOSE.
    10     (2)  THE LIMITATIONS SET FORTH IN CLAUSE (1) OF THIS
    11  SUBSECTION SHALL NOT APPLY TO INVESTMENTS IN ANY SUBSIDIARY
    12  WHICH IS:
    13     (I)  AN INSURANCE COMPANY OR A HEALTH MAINTENANCE
    14  ORGANIZATION HOLDING A CERTIFICATE OF AUTHORITY UNDER THE ACT OF
    15  DECEMBER 29, 1972 (P.L.1701, NO.364), KNOWN AS THE "HEALTH
    16  MAINTENANCE ORGANIZATION ACT."
    17     (II)  A HOLDING COMPANY TO THE EXTENT ITS BUSINESS CONSISTS
    18  OF THE HOLDING OF THE STOCK OF, OR OTHERWISE CONTROLLING, ITS
    19  OWN SUBSIDIARIES.
    20     (III)  A CORPORATION WHOSE BUSINESS PRIMARILY CONSISTS OF
    21  DIRECT OR INDIRECT OWNERSHIP, OPERATION OR MANAGEMENT OF ASSETS
    22  AUTHORIZED AS INVESTMENTS PURSUANT TO SECTIONS 404.1 AND 406.
    23     (IV)  A COMPANY ENGAGED IN ANY COMBINATION OF THE ACTIVITIES
    24  DESCRIBED IN SUBCLAUSES (I), (II) AND (III) OF THIS CLAUSE.
    25  INVESTMENTS MADE PURSUANT TO SUBCLAUSE (I) SHALL NOT BE
    26  RESTRICTED IN AMOUNT PROVIDED THAT AFTER SUCH INVESTMENT, AS
    27  CALCULATED FOR NAIC ANNUAL STATEMENT PURPOSES, THE INSURER'S
    28  SURPLUS WILL BE REASONABLE IN RELATION TO THE INSURER'S
    29  OUTSTANDING LIABILITIES AND ADEQUATE TO ITS FINANCIAL NEEDS.
    30  INVESTMENTS MADE PURSUANT TO SUBCLAUSE (II), OR TO THE EXTENT
    20070H1150B4085                 - 13 -     

     1  APPLICABLE IN THIS SUBCLAUSE, SHALL IN ADDITION NOT BE SUBJECT
     2  TO ANY LIMITATIONS ON THE AMOUNT OF A DOMESTIC LIFE INSURANCE
     3  COMPANY'S ASSETS PROVIDED FOR UNDER ANY OTHER PROVISION OF THIS
     4  ACT AND WHICH MIGHT OTHERWISE BE APPLICABLE: PROVIDED, HOWEVER,
     5  THAT SUCH LIFE INSURANCE COMPANY'S INVESTMENTS, TO THE EXTENT
     6  THAT SUCH LIFE INSURANCE COMPANY PROVIDED THE FUNDS THEREFOR, IN
     7  EACH OF THE SUBSIDIARIES OF SUCH HOLDING COMPANY SHALL BE
     8  SUBJECT TO THE LIMITATIONS, IF ANY, APPLICABLE TO SUCH
     9  INVESTMENT AS IF THE HOLDING COMPANY'S INTEREST IN EACH SUCH
    10  SUBSIDIARY WERE INSTEAD OWNED DIRECTLY BY THE LIFE INSURANCE
    11  COMPANY. INVESTMENTS MADE PURSUANT TO SUBCLAUSE (III), OR, TO
    12  THE EXTENT APPLICABLE, THIS CLAUSE, SHALL BE COUNTED IN
    13  DETERMINING THE LIMITATIONS CONTAINED IN APPLICABLE SUBSECTIONS
    14  OF SECTIONS 404.2 AND 406: PROVIDED, HOWEVER, THAT THE VALUE AS
    15  CALCULATED FOR ANNUAL STATEMENT PURPOSES, BUT NOT IN EXCESS OF
    16  THE COST THEREOF, OF SUCH INVESTMENT SHALL INCLUDE ONLY FUNDS
    17  PROVIDED BY THE INSURANCE COMPANY THEREFOR. INVESTMENTS MADE IN
    18  OTHER SUBSIDIARIES OF SUCH LIFE INSURANCE COMPANY BY ANY
    19  SUBSIDIARY DESCRIBED IN SUBCLAUSES (I), (II), (III) AND THIS
    20  SUBCLAUSE OR BY A PERSON WHOSE BUSINESS PRIMARILY CONSISTS OF
    21  DIRECT OR INDIRECT OWNERSHIP, OPERATION OR MANAGEMENT OF REAL
    22  PROPERTY AND INTEREST THEREIN UNDER SECTION 406 SHALL BE DEEMED
    23  INVESTMENTS MADE BY THE INSURANCE COMPANY ONLY TO THE EXTENT THE
    24  FUNDS FOR SUCH INVESTMENT WERE PROVIDED BY SUCH INSURANCE
    25  COMPANY.
    26     * * *
    27     SECTION 3.  THE ACT IS AMENDED BY ADDING SECTIONS TO READ:
    28     SECTION 635.2.  AUTISM SPECTRUM DISORDERS COVERAGE.--(A)  A
    29  HEALTH INSURANCE POLICY OR GOVERNMENT PROGRAM COVERED UNDER THIS
    30  SECTION SHALL PROVIDE TO COVERED INDIVIDUALS OR RECIPIENTS UNDER
    20070H1150B4085                 - 14 -     

     1  TWENTY-ONE (21) YEARS OF AGE COVERAGE FOR THE DIAGNOSTIC
     2  ASSESSMENT OF AUTISM SPECTRUM DISORDERS AND FOR THE TREATMENT OF
     3  AUTISM SPECTRUM DISORDERS.
     4     (B)  COVERAGE PROVIDED UNDER THIS SECTION BY AN INSURER SHALL
     5  BE SUBJECT TO A MAXIMUM BENEFIT OF THIRTY-SIX THOUSAND DOLLARS
     6  ($36,000) PER YEAR BUT SHALL NOT BE SUBJECT TO ANY LIMITS ON THE
     7  NUMBER OF VISITS TO AN AUTISM SERVICE PROVIDER FOR TREATMENT OF
     8  AUTISM SPECTRUM DISORDERS. AFTER DECEMBER 30, 2011, THE
     9  INSURANCE COMMISSIONER SHALL, ON OR BEFORE APRIL 1 OF EACH
    10  CALENDAR YEAR, PUBLISH IN THE PENNSYLVANIA BULLETIN AN
    11  ADJUSTMENT TO THE MAXIMUM BENEFIT EQUAL TO THE CHANGE IN THE
    12  UNITED STATES DEPARTMENT OF LABOR CONSUMER PRICE INDEX FOR ALL
    13  URBAN CONSUMERS (CPI-U) IN THE PRECEDING YEAR, AND THE PUBLISHED
    14  ADJUSTED MAXIMUM BENEFIT SHALL BE APPLICABLE TO THE FOLLOWING
    15  CALENDAR YEARS TO HEALTH INSURANCE POLICIES ISSUED OR RENEWED IN
    16  THOSE CALENDAR YEARS. PAYMENTS MADE BY AN INSURER ON BEHALF OF A
    17  COVERED INDIVIDUAL FOR TREATMENT OF A HEALTH CONDITION UNRELATED
    18  TO OR DISTINGUISHABLE FROM THE INDIVIDUAL'S AUTISM SPECTRUM
    19  DISORDER SHALL NOT BE APPLIED TOWARD ANY MAXIMUM BENEFIT
    20  ESTABLISHED UNDER THIS SUBSECTION.
    21     (C)  COVERAGE UNDER THIS SECTION SHALL BE SUBJECT TO
    22  COPAYMENT, DEDUCTIBLE AND COINSURANCE PROVISIONS, AND ANY OTHER
    23  GENERAL EXCLUSIONS OR LIMITATIONS, OF A HEALTH INSURANCE POLICY
    24  OR GOVERNMENT PROGRAM TO THE SAME EXTENT AS OTHER MEDICAL
    25  SERVICES COVERED BY THE POLICY OR PROGRAM ARE SUBJECT TO THESE
    26  PROVISIONS.
    27     (D)  THIS SECTION SHALL NOT BE CONSTRUED AS LIMITING BENEFITS
    28  WHICH ARE OTHERWISE AVAILABLE TO AN INDIVIDUAL UNDER A HEALTH
    29  INSURANCE POLICY OR GOVERNMENT PROGRAM.
    30     (D.1)  THIS SECTION SHALL NOT BE CONSTRUED AS REQUIRING
    20070H1150B4085                 - 15 -     

     1  COVERAGE BY INSURERS OF ANY SERVICE BASED SOLELY ON ITS
     2  INCLUSION IN AN INDIVIDUALIZED EDUCATION PROGRAM. CONSISTENT
     3  WITH FEDERAL OR STATE LAW AND UPON CONSENT OF THE PARENT OR
     4  GUARDIAN OF THE COVERED INDIVIDUAL, THE TREATMENT OF AUTISM
     5  SPECTRUM DISORDERS MAY BE COORDINATED WITH ANY SERVICE INCLUDED
     6  IN AN INDIVIDUALIZED EDUCATION PROGRAM. COVERAGE FOR THE
     7  TREATMENT OF AUTISM SPECTRUM DISORDERS SHALL NOT BE CONTINGENT
     8  UPON A COORDINATION OF SERVICES WITH AN INDIVIDUALIZED EDUCATION
     9  PROGRAM.
    10     (E)  (1)  THIS SECTION SHALL APPLY TO ANY HEALTH INSURANCE
    11  POLICY OFFERED, ISSUED OR RENEWED ON OR AFTER JULY 1, 2009, IN
    12  THIS COMMONWEALTH TO GROUPS OF FIFTY-ONE (51) OR MORE EMPLOYEES:
    13  PROVIDED, THAT THIS SECTION SHALL NOT INCLUDE THE FOLLOWING
    14  POLICIES:
    15     (I)  ACCIDENT ONLY.
    16     (II)  FIXED INDEMNITY.
    17     (III)  LIMITED BENEFIT.
    18     (IV)  CREDIT.
    19     (V)  DENTAL.
    20     (VI)  VISION.
    21     (VII)  SPECIFIED DISEASE.
    22     (VIII)  MEDICARE SUPPLEMENT.
    23     (IX)  CHAMPUS (CIVILIAN HEALTH AND MEDICAL PROGRAM OF THE
    24  UNIFORMED SERVICES) SUPPLEMENT.
    25     (X)  LONG-TERM CARE OR DISABILITY INCOME.
    26     (XI)  WORKERS' COMPENSATION.
    27     (XII)  AUTOMOBILE MEDICAL PAYMENT.
    28     (2)  THIS SECTION SHALL APPLY TO ANY CONTRACT EXECUTED ON OR
    29  AFTER JULY 1, 2009, BY THE ADULTBASIC COVERAGE INSURANCE PROGRAM
    30  ESTABLISHED UNDER CHAPTER 13 OF THE ACT OF JUNE 26, 2001
    20070H1150B4085                 - 16 -     

     1  (P.L.755, NO.77), KNOWN AS THE "TOBACCO SETTLEMENT ACT," OR BY
     2  THE CHILDREN'S HEALTH CARE PROGRAM ESTABLISHED UNDER THIS ACT,
     3  OR BY ANY SUCCESSOR PROGRAM OF EITHER OF THEM.
     4     (3)  ON JANUARY 1, 2011, INSURERS SHALL MAKE A REPORT TO THE
     5  INSURANCE DEPARTMENT, IN A FORM AND MANNER AS DETERMINED BY THE
     6  DEPARTMENT, TO EVALUATE THE IMPLEMENTATION OF THIS SECTION.
     7     (F)  AS USED IN THIS SECTION:
     8     (1)  "APPLIED BEHAVIORAL ANALYSIS" MEANS THE DESIGN,
     9  IMPLEMENTATION AND EVALUATION OF ENVIRONMENTAL MODIFICATION,
    10  USING BEHAVIORAL STIMULI AND CONSEQUENCES, TO PRODUCE SOCIALLY
    11  SIGNIFICANT IMPROVEMENT IN HUMAN BEHAVIOR, INCLUDING THE USE OF
    12  DIRECT OBSERVATION, MEASUREMENT AND FUNCTIONAL ANALYSIS OF THE
    13  RELATIONS BETWEEN ENVIRONMENT AND BEHAVIOR.
    14     (2)  "AUTISM SERVICE PROVIDER" MEANS ANY OF THE FOLLOWING:
    15     (I)  A PERSON, ENTITY OR GROUP PROVIDING TREATMENT OF AUTISM
    16  SPECTRUM DISORDERS PURSUANT TO A TREATMENT PLAN THAT IS LICENSED
    17  OR CERTIFIED IN THIS COMMONWEALTH.
    18     (II)  ANY PERSON, ENTITY OR GROUP PROVIDING TREATMENT OF
    19  AUTISM SPECTRUM DISORDERS PURSUANT TO A TREATMENT PLAN THAT IS
    20  ENROLLED IN THE COMMONWEALTH'S MEDICAL ASSISTANCE PROGRAM ON OR
    21  BEFORE THE EFFECTIVE DATE OF THIS SECTION.
    22     (3)  "AUTISM SPECTRUM DISORDERS" MEANS ANY OF THE PERVASIVE
    23  DEVELOPMENTAL DISORDERS DEFINED BY THE MOST RECENT EDITION OF
    24  THE DIAGNOSTIC AND STATISTICAL MANUAL OF MENTAL DISORDERS (DSM),
    25  OR ITS SUCCESSOR, INCLUDING AUTISTIC DISORDER, ASPERGER'S
    26  DISORDER AND PERVASIVE DEVELOPMENTAL DISORDER NOT OTHERWISE
    27  SPECIFIED.
    28     (4)  "BEHAVIOR SPECIALIST" MEANS AN INDIVIDUAL WHO DESIGNS,
    29  IMPLEMENTS OR EVALUATES A BEHAVIOR MODIFICATION INTERVENTION
    30  COMPONENT OF A TREATMENT PLAN, INCLUDING THOSE BASED ON APPLIED
    20070H1150B4085                 - 17 -     

     1  BEHAVIORAL ANALYSIS, TO PRODUCE SOCIALLY SIGNIFICANT
     2  IMPROVEMENTS IN HUMAN BEHAVIOR THROUGH SKILL ACQUISITION AND THE
     3  REDUCTION OF PROBLEMATIC BEHAVIOR.
     4     (5)  "DIAGNOSTIC ASSESSMENT OF AUTISM SPECTRUM DISORDERS"
     5  MEANS MEDICALLY NECESSARY ASSESSMENTS, EVALUATIONS OR TESTS
     6  PERFORMED BY A LICENSED PHYSICIAN, LICENSED PHYSICIAN ASSISTANT,
     7  LICENSED PSYCHOLOGIST OR CERTIFIED REGISTERED NURSE PRACTITIONER
     8  TO DIAGNOSE WHETHER AN INDIVIDUAL HAS AN AUTISM SPECTRUM
     9  DISORDER.
    10     (6)  "GOVERNMENT PROGRAM" MEANS ANY OF THE FOLLOWING:
    11     (I)  THE COMMONWEALTH'S MEDICAL ASSISTANCE PROGRAM
    12  ESTABLISHED UNDER THE ACT OF JUNE 13, 1967 (P.L.31, NO.21),
    13  KNOWN AS THE "PUBLIC WELFARE CODE."
    14     (II)  THE ADULT BASIC COVERAGE INSURANCE PROGRAM ESTABLISHED
    15  UNDER CHAPTER 13 OF THE ACT OF JUNE 26, 2001 (P.L.755, NO.77),
    16  KNOWN AS THE "TOBACCO SETTLEMENT ACT."
    17     (III)  THE CHILDREN'S HEALTH CARE PROGRAM ESTABLISHED UNDER
    18  THIS ACT.
    19     (7)  "HEALTH INSURANCE POLICY" MEANS ANY GROUP HEALTH,
    20  SICKNESS OR ACCIDENT POLICY, OR SUBSCRIBER CONTRACT OR
    21  CERTIFICATE OFFERED, ISSUED OR RENEWED BY AN ENTITY SUBJECT TO
    22  ONE OF THE FOLLOWING:
    23     (I)  THIS ACT.
    24     (II)  THE ACT OF DECEMBER 29, 1972 (P.L.1701, NO.364), KNOWN
    25  AS THE "HEALTH MAINTENANCE ORGANIZATION ACT."
    26     (III)  40 PA.C.S. CH. 61 (RELATING TO HOSPITAL PLAN
    27  CORPORATIONS) OR 63 (RELATING TO PROFESSIONAL HEALTH SERVICE
    28  PLAN CORPORATIONS).
    29     (8)  "INSURER" MEANS ANY ENTITY OFFERING A HEALTH INSURANCE
    30  POLICY AS DEFINED IN THIS SECTION.
    20070H1150B4085                 - 18 -     

     1     (9)  "PHARMACY CARE" MEANS MEDICATIONS PRESCRIBED BY A
     2  LICENSED PHYSICIAN, LICENSED PHYSICIAN ASSISTANT OR CERTIFIED
     3  REGISTERED NURSE PRACTITIONER AND ANY ASSESSMENT, EVALUATION OR
     4  TEST PRESCRIBED OR ORDERED BY A LICENSED PHYSICIAN, LICENSED
     5  PHYSICIAN ASSISTANT OR CERTIFIED REGISTERED NURSE PRACTITIONER
     6  TO DETERMINE THE NEED OR EFFECTIVENESS OF SUCH MEDICATIONS.
     7     (10)  "PSYCHIATRIC CARE" MEANS DIRECT OR CONSULTATIVE
     8  SERVICES PROVIDED BY A PHYSICIAN WHO SPECIALIZES IN PSYCHIATRY.
     9     (11)  "PSYCHOLOGICAL CARE" MEANS DIRECT OR CONSULTATIVE
    10  SERVICES PROVIDED BY A PSYCHOLOGIST.
    11     (12)  "REHABILITATIVE CARE" MEANS PROFESSIONAL SERVICES AND
    12  TREATMENT PROGRAMS, INCLUDING APPLIED BEHAVIORAL ANALYSIS,
    13  PROVIDED BY AN AUTISM SERVICE PROVIDER.
    14     (13)  "THERAPEUTIC CARE" MEANS SERVICES PROVIDED BY SPEECH
    15  LANGUAGE PATHOLOGISTS, OCCUPATIONAL THERAPISTS OR PHYSICAL
    16  THERAPISTS.
    17     (14)  "TREATMENT OF AUTISM SPECTRUM DISORDER" SHALL BE
    18  IDENTIFIED IN A TREATMENT PLAN AND SHALL INCLUDE ANY OF THE
    19  FOLLOWING MEDICALLY NECESSARY PHARMACY CARE, PSYCHIATRIC CARE,
    20  PSYCHOLOGICAL CARE, REHABILITATIVE CARE AND THERAPEUTIC CARE
    21  THAT IS:
    22     (I)  PRESCRIBED, ORDERED OR PROVIDED BY A LICENSED PHYSICIAN,
    23  LICENSED PHYSICIAN ASSISTANT, LICENSED PSYCHOLOGIST, LICENSED
    24  CLINICAL SOCIAL WORKER OR CERTIFIED REGISTERED NURSE
    25  PRACTITIONER.
    26     (II)  PROVIDED BY AN AUTISM SERVICE PROVIDER.
    27     (III)  PROVIDED BY A PERSON, ENTITY OR GROUP THAT WORKS UNDER
    28  THE DIRECTION OF AN AUTISM SERVICE PROVIDER.
    29     (15)  "TREATMENT PLAN" MEANS A PLAN FOR THE TREATMENT OF
    30  AUTISM SPECTRUM DISORDERS DEVELOPED BY A LICENSED PHYSICIAN OR
    20070H1150B4085                 - 19 -     

     1  LICENSED PSYCHOLOGIST PURSUANT TO A COMPREHENSIVE EVALUATION OR
     2  REEVALUATION PERFORMED IN A MANNER CONSISTENT WITH THE MOST
     3  RECENT CLINICAL REPORT OR RECOMMENDATIONS OF THE AMERICAN
     4  ACADEMY OF PEDIATRICS.
     5     (G)  (1)  THE STATE BOARD OF MEDICINE, IN CONSULTATION WITH
     6  THE DEPARTMENT OF PUBLIC WELFARE, SHALL PROMULGATE REGULATIONS
     7  PROVIDING FOR THE LICENSURE OR CERTIFICATION OF BEHAVIOR
     8  SPECIALISTS. BEHAVIOR SPECIALISTS LICENSED OR CERTIFIED BY THE
     9  STATE BOARD OF MEDICINE SHALL BE SUBJECT TO ALL DISCIPLINARY
    10  PROVISIONS APPLICABLE TO MEDICAL DOCTORS AS SET FORTH IN THE ACT
    11  OF DECEMBER 20, 1985 (P.L.457, NO.112), KNOWN AS THE "MEDICAL
    12  PRACTICE ACT OF 1985." THE STATE BOARD OF MEDICINE MAY CHARGE
    13  REASONABLE FEES AS SET BY BOARD REGULATION FOR LICENSURE OR
    14  CERTIFICATES OR APPLICATIONS PERMITTED BY THE "MEDICAL PRACTICE
    15  ACT OF 1985."
    16     (2)  AN APPLICANT APPLYING FOR A LICENSE OR CERTIFICATE AS A
    17  BEHAVIOR SPECIALIST SHALL SUBMIT A WRITTEN APPLICATION ON FORMS
    18  PROVIDED BY THE STATE BOARD OF MEDICINE EVIDENCING AND INSURING
    19  TO THE SATISFACTION OF THE BOARD THAT THE APPLICANT:
    20     (I)  IS OF GOOD MORAL CHARACTER.
    21     (II)  HAS RECEIVED A MASTER'S OR HIGHER DEGREE FROM A BOARD-
    22  APPROVED, ACCREDITED COLLEGE OR UNIVERSITY, INCLUDING A MAJOR
    23  COURSE OF STUDY IN SCHOOL, CLINICAL OR COUNSELING PSYCHOLOGY,
    24  SPECIAL EDUCATION, SOCIAL WORK, SPEECH THERAPY, OCCUPATIONAL
    25  THERAPY OR ANOTHER RELATED FIELD.
    26     (III)  HAS AT LEAST ONE YEAR OF EXPERIENCE INVOLVING
    27  FUNCTIONAL BEHAVIOR ASSESSMENTS, INCLUDING THE DEVELOPMENT AND
    28  IMPLEMENTATION OF BEHAVIORAL SUPPORTS OR TREATMENT PLANS.
    29     (IV)  HAS COMPLETED AT LEAST ONE THOUSAND (1,000) HOURS IN
    30  DIRECT CLINICAL EXPERIENCE WITH INDIVIDUALS WITH BEHAVIORAL
    20070H1150B4085                 - 20 -     

     1  CHALLENGES OR AT LEAST ONE THOUSAND (1,000) HOURS' EXPERIENCE IN
     2  A RELATED FIELD WITH INDIVIDUALS WITH AUTISM SPECTRUM DISORDERS.
     3     (V)  HAS COMPLETED RELEVANT TRAINING PROGRAMS, INCLUDING
     4  PROFESSIONAL ETHICS, AUTISM-SPECIFIC TRAINING, ASSESSMENTS
     5  TRAINING, INSTRUCTIONAL STRATEGIES AND BEST PRACTICES, CRISIS
     6  INTERVENTION, COMORBIDITY AND MEDICATIONS, FAMILY COLLABORATION
     7  AND ADDRESSING SPECIFIC SKILL DEFICITS TRAINING.
     8     (3)  THE BOARD SHALL NOT ISSUE A LICENSE OR CERTIFICATE TO AN
     9  APPLICANT WHO HAS BEEN CONVICTED OF A FELONY UNDER THE ACT OF
    10  APRIL 14, 1972 (P.L.233, NO.64), KNOWN AS "THE CONTROLLED
    11  SUBSTANCE, DRUG, DEVICE AND COSMETIC ACT," OR IF AN OFFENSE
    12  UNDER THE LAWS OF ANOTHER JURISDICTION WHICH, IF COMMITTED IN
    13  THIS COMMONWEALTH, WOULD BE A FELONY UNDER "THE CONTROLLED
    14  SUBSTANCE, DRUG, DEVICE AND COSMETIC ACT," UNLESS:
    15     (I)  AT LEAST TEN (10) YEARS HAVE ELAPSED FROM THE DATE OF
    16  CONVICTION.
    17     (II)  THE APPLICANT SATISFACTORILY DEMONSTRATES TO THE BOARD
    18  THAT HE HAS MADE SIGNIFICANT PROGRESS IN PERSONAL REHABILITATION
    19  SINCE THE CONVICTION SUCH THAT LICENSURE OF THE APPLICANT SHOULD
    20  NOT BE EXPECTED TO CREATE A SUBSTANTIAL RISK OF HARM TO THE
    21  HEALTH AND SAFETY OF HIS PATIENTS OR THE PUBLIC OR A SUBSTANTIAL
    22  RISK OF FURTHER CRIMINAL VIOLATIONS.
    23     (III)  THE APPLICANT OTHERWISE SATISFIES THE QUALIFICATIONS
    24  CONTAINED IN OR AUTHORIZED BY THIS SECTION.
    25  AS USED IN THIS PARAGRAPH, THE TERM "CONVICTED" SHALL INCLUDE A
    26  JUDGMENT, AN ADMISSION OF GUILT OR A PLEA OF NOLO CONTENDERE.
    27     (H)  AN INSURER SHALL BE REQUIRED TO CONTRACT WITH AND TO
    28  ACCEPT AS A PARTICIPATING PROVIDER ANY AUTISM SERVICE PROVIDER
    29  WITHIN ITS SERVICE AREA AND ENROLLED IN THE COMMONWEALTH'S
    30  MEDICAL ASSISTANCE PROGRAM WHO AGREES TO ACCEPT THE PAYMENT
    20070H1150B4085                 - 21 -     

     1  LEVELS, TERMS AND CONDITIONS APPLICABLE TO THE INSURER'S OTHER
     2  PARTICIPATING PROVIDERS FOR SUCH SERVICE.
     3     (I)  AN INSURER MAY REVIEW A TREATMENT PLAN FOR TREATMENT OF
     4  AUTISM SPECTRUM DISORDERS ONCE EVERY SIX (6) MONTHS, SUBJECT TO
     5  ITS UTILIZATION REVIEW REQUIREMENTS, INCLUDING CASE MANAGEMENT,
     6  CONCURRENT REVIEW AND OTHER MANAGED CARE PROVISIONS. A MORE OR
     7  LESS FREQUENT REVIEW CAN BE AGREED UPON BY THE INSURER AND THE
     8  LICENSED PHYSICIAN OR LICENSED PSYCHOLOGIST DEVELOPING THE
     9  TREATMENT PLAN.
    10     (J)  THE RESULTS OF A DIAGNOSTIC ASSESSMENT OF AUTISM
    11  SPECTRUM DISORDER SHALL BE VALID FOR A PERIOD OF TWELVE (12)
    12  MONTHS, UNLESS A LICENSED PHYSICIAN OR LICENSED PSYCHOLOGIST
    13  DETERMINES AN EARLIER ASSESSMENT IS NECESSARY.
    14     (K)  FOR PURPOSES OF THIS SECTION, THE TERM "AUTISM SERVICE
    15  PROVIDER" SHALL INCLUDE ANY BEHAVIOR SPECIALIST IN THIS
    16  COMMONWEALTH PROVIDING TREATMENT OF AUTISM SPECTRUM DISORDERS
    17  PURSUANT TO A TREATMENT PLAN UNTIL ONE (1) YEAR FROM THE TIME
    18  THAT SUCH REGULATIONS ARE PROMULGATED OR UNTIL THREE (3) YEARS
    19  FROM THE EFFECTIVE DATE OF THIS SECTION, WHICHEVER IS LATER.
    20     SECTION 635.3.  COVERAGE FOR COLORECTAL CANCER SCREENING.--
    21  (A)  EXCEPT TO THE EXTENT ALREADY COVERED UNDER ANOTHER POLICY,
    22  ALL HEALTH INSURANCE POLICIES AS DEFINED IN THIS SECTION SHALL
    23  ALSO PROVIDE COVERAGE FOR COLORECTAL CANCER SCREENING FOR
    24  COVERED INDIVIDUALS IN ACCORDANCE WITH THE MOST RECENTLY
    25  PUBLISHED AMERICAN CANCER SOCIETY GUIDELINES FOR COLORECTAL
    26  CANCER SCREENING AS OF JANUARY 1, 2008, AND CONSISTENT WITH
    27  APPROVED MEDICAL STANDARDS AND PRACTICES.
    28     (1)  COVERAGE FOR NONSYMPTOMATIC COVERED INDIVIDUALS WHO ARE
    29  FIFTY (50) YEARS OF AGE OR OLDER SHALL INCLUDE, BUT NOT BE
    30  LIMITED TO:
    20070H1150B4085                 - 22 -     

     1     (I)  AN ANNUAL FECAL OCCULT BLOOD TEST.
     2     (II)  A SIGMOIDOSCOPY, A SCREENING BARIUM ENEMA OR A TEST
     3  CONSISTENT WITH APPROVED MEDICAL STANDARDS AND PRACTICES TO
     4  DETECT COLON CANCER, AT LEAST ONCE EVERY FIVE (5) YEARS.
     5     (III)  A COLONOSCOPY AT LEAST ONCE EVERY TEN (10) YEARS.
     6     (2)  COVERAGE FOR SYMPTOMATIC COVERED INDIVIDUALS SHALL
     7  INCLUDE A COLONOSCOPY, SIGMOIDOSCOPY OR ANY COMBINATION OF
     8  COLORECTAL CANCER SCREENING TESTS AT A FREQUENCY DETERMINED BY A
     9  TREATING PHYSICIAN.
    10     (3)  COVERAGE FOR NONSYMPTOMATIC COVERED INDIVIDUALS WHO ARE
    11  AT HIGH OR INCREASED RISK FOR COLORECTAL CANCER WHO ARE UNDER
    12  FIFTY (50) YEARS OF AGE SHALL INCLUDE A COLONOSCOPY OR ANY
    13  COMBINATION OF COLORECTAL CANCER SCREENING TESTS IN ACCORDANCE
    14  WITH THE MOST RECENTLY PUBLISHED AMERICAN CANCER SOCIETY
    15  GUIDELINES ON SCREENING FOR COLORECTAL CANCER.
    16     (B)  THE COVERAGE REQUIRED UNDER THIS SECTION SHALL BE
    17  SUBJECT TO ANNUAL DEDUCTIBLES, COINSURANCE AND COPAYMENT
    18  REQUIREMENTS IMPOSED BY AN ENTITY SUBJECT TO THIS SECTION FOR
    19  SIMILAR COVERAGES UNDER THE SAME HEALTH INSURANCE POLICY OR
    20  CONTRACT.
    21     (C)  FOR THE PURPOSE OF THIS SECTION:
    22     (1)  "HEALTH INSURANCE POLICY" MEANS ANY INDIVIDUAL OR GROUP
    23  HEALTH, SICKNESS OR ACCIDENT POLICY OR SUBSCRIBER CONTRACT OR
    24  CERTIFICATE OFFERED TO FIFTY-ONE (51) OR MORE EMPLOYES ISSUED BY
    25  AN ENTITY SUBJECT TO ANY ONE OF THE FOLLOWING:
    26     (I)  THIS ACT.
    27     (II)  THE ACT OF DECEMBER 29, 1972 (P.L.1701, NO.364), KNOWN
    28  AS THE "HEALTH MAINTENANCE ORGANIZATION ACT."
    29     (III)  THE ACT OF MAY 18, 1976 (P.L.123, NO.54), KNOWN AS THE
    30  "INDIVIDUAL ACCIDENT AND SICKNESS INSURANCE MINIMUM STANDARDS
    20070H1150B4085                 - 23 -     

     1  ACT."
     2     (IV)  40 PA.C.S. CH. 61 (RELATING TO HOSPITAL PLAN
     3  CORPORATIONS) OR 63 (RELATING TO PROFESSIONAL HEALTH SERVICES
     4  PLAN CORPORATIONS).
     5     (V)  MEDICAL ASSISTANCE.
     6  THE TERM DOES NOT INCLUDE ACCIDENT ONLY, FIXED INDEMNITY,
     7  LIMITED BENEFIT, CREDIT, DENTAL, VISION, SPECIFIED DISEASE,
     8  MEDICARE SUPPLEMENT, CIVILIAN HEALTH AND MEDICAL PROGRAM OF THE
     9  UNIFORMED SERVICES (CHAMPUS) SUPPLEMENT, LONG-TERM CARE OR
    10  DISABILITY INCOME, WORKERS' COMPENSATION OR AUTOMOBILE MEDICAL
    11  PAYMENT INSURANCE.
    12     (2)  "COLONOSCOPY" MEANS AN EXAMINATION OF THE RECTUM AND THE
    13  ENTIRE COLON USING A LIGHTED INSTRUMENT CALLED A COLONOSCOPE.
    14     (3)  "COLORECTAL CANCER SCREENING" MEANS ANY OF THE FOLLOWING
    15  PROCEDURES THAT ARE FURNISHED TO AN INDIVIDUAL FOR THE PURPOSE
    16  OF EARLY DETECTION OF COLORECTAL CANCER:
    17     (I)  SCREENING FECAL-OCCULT BLOOD OR FECAL IMMUNOCHEMICAL
    18  TEST.
    19     (II)  SCREENING FLEXIBLE SIGMOIDOSCOPY.
    20     (III)  SCREENING COLONOSCOPY.
    21     (IV)  SCREENING BARIUM ENEMA.
    22     (V)  SCREENING TEST CONSISTENT WITH APPROVED MEDICAL
    23  STANDARDS AND PRACTICES TO DETECT COLON CANCER.
    24     (4)  "NONSYMPTOMATIC PERSON AT HIGH OR INCREASED RISK" MEANS
    25  AN INDIVIDUAL WHO POSES A HIGHER THAN AVERAGE RISK FOR
    26  COLORECTAL CANCER ACCORDING TO THE MOST RECENTLY PUBLISHED
    27  AMERICAN CANCER SOCIETY GUIDELINES.
    28     (5)  "SYMPTOMATIC PERSON" MEANS AN INDIVIDUAL WHO EXPERIENCES
    29  A CHANGE IN BOWEL HABITS, RECTAL BLEEDING OR PERSISTANT STOMACH
    30  CRAMPS, WEIGHT LOSS OR ABDOMINAL PAIN.
    20070H1150B4085                 - 24 -     

     1     SECTION 4.  THE INTRODUCTORY PARAGRAPH AND THE DEFINITIONS OF
     2  "INSURER" AND "PERSON" IN SECTION 1401 OF THE ACT, AMENDED
     3  DECEMBER 20, 2000 (P.L.967, NO.132), ARE AMENDED AND THE SECTION
     4  IS AMENDED BY ADDING A DEFINITION TO READ:
     5     SECTION 1401.  DEFINITIONS.--AS USED IN THIS ARTICLE, AND FOR
     6  THE PURPOSES OF THIS ARTICLE ONLY, THE FOLLOWING WORDS AND
     7  PHRASES SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION:
     8     * * *
     9     "INSURER."  ANY HEALTH MAINTENANCE ORGANIZATION, PREFERRED
    10  PROVIDER ORGANIZATION, COMPANY, ASSOCIATION [OR], EXCHANGE,
    11  HOSPITAL PLAN CORPORATION AS DEFINED IN AND SUBJECT TO 40
    12  PA.C.S. CH. 61 (RELATING TO HOSPITAL PLAN CORPORATIONS) OR
    13  PROFESSIONAL HEALTH SERVICES PLAN CORPORATION SUBJECT TO 40
    14  PA.C.S. CH. 63 (RELATING TO PROFESSIONAL HEALTH SERVICES PLAN
    15  CORPORATIONS), AUTHORIZED BY THE INSURANCE COMMISSIONER TO
    16  TRANSACT THE BUSINESS OF INSURANCE IN THIS COMMONWEALTH EXCEPT
    17  THAT THE TERM SHALL NOT INCLUDE:
    18     (1)  THE COMMONWEALTH OR ANY AGENCY OR INSTRUMENTALITY
    19  THEREOF;
    20     (2)  AGENCIES, AUTHORITIES OR INSTRUMENTALITIES OF THE UNITED
    21  STATES, ITS POSSESSIONS AND TERRITORIES, THE COMMONWEALTH OF
    22  PUERTO RICO, THE DISTRICT OF COLUMBIA OR A STATE OR POLITICAL
    23  SUBDIVISION; OR
    24     (3)  FRATERNAL BENEFIT SOCIETIES[; OR
    25     (4)  NONPROFIT MEDICAL AND HOSPITAL SERVICE ASSOCIATIONS].
    26     * * *
    27     "PERSON."  AN INDIVIDUAL, AN INSURER, A CORPORATION, A
    28  PARTNERSHIP, A LIMITED LIABILITY COMPANY, AN ASSOCIATION, A
    29  JOINT STOCK COMPANY, A TRUST, AN UNINCORPORATED ORGANIZATION,
    30  ANY SIMILAR ENTITY OR ANY COMBINATION OF THE FOREGOING ACTING IN
    20070H1150B4085                 - 25 -     

     1  CONCERT. THE TERM SHALL NOT INCLUDE ANY JOINT VENTURE
     2  PARTNERSHIP EXCLUSIVELY ENGAGED IN OWNING, MANAGING, LEASING OR
     3  DEVELOPING REAL OR TANGIBLE PERSONAL PROPERTY.
     4     * * *
     5     "SHAREHOLDER."  A RECORD HOLDER OR RECORD OWNER OF SHARES OF
     6  AN INSURER.
     7     (1)  THE TERM SHALL INCLUDE ALL OF THE FOLLOWING:
     8     (I)  A MEMBER OF AN INSURER THAT IS A DOMESTIC NONSTOCK
     9  CORPORATION UNDER 15 PA.C.S. CH. 21 (RELATING TO NONSTOCK
    10  CORPORATIONS) OR A PRIOR STATUTE.
    11     (II)  A MEMBER, AS DEFINED IN 15 PA.C.S. § 5103 (RELATING TO
    12  DEFINITIONS), OF AN INSURER THAT IS A DOMESTIC NONPROFIT
    13  CORPORATION UNDER 15 PA.C.S. CH. 51 (RELATING TO GENERAL
    14  PROVISIONS) OR A PRIOR STATUTE.
    15     (III)  A SUBSCRIBER OF AN INSURER THAT IS A DOMESTIC
    16  RECIPROCAL EXCHANGE UNDER ARTICLE X OR A PRIOR STATUTE.
    17     (2)  THE TERM SHALL NOT INCLUDE ANY SUBSCRIBER, INSURED OR
    18  CUSTOMER OF:
    19     (I)  A HOSPITAL PLAN CORPORATION SUBJECT TO 40 PA.C.S. CH. 61
    20  (RELATING TO HOSPITAL PLAN CORPORATIONS); OR
    21     (II)  A PROFESSIONAL HEALTH SERVICE PLAN CORPORATION SUBJECT
    22  TO 40 PA.C.S. CH. 63 (RELATING TO PROFESSIONAL HEALTH SERVICES
    23  PLAN CORPORATIONS).
    24     * * *
    25     SECTION 5.  SECTION 1402 OF THE ACT, AMENDED OR ADDED
    26  DECEMBER 18, 1992 (P.L.1519, NO.178) AND DECEMBER 21, 1998
    27  (P.L.1108, NO.150), IS AMENDED TO READ:
    28     SECTION 1402.  ACQUISITION OF CONTROL OF OR MERGER OR
    29  CONSOLIDATION WITH DOMESTIC INSURER.--(A)  (1)  NO PERSON OTHER
    30  THAN THE ISSUER SHALL MAKE A TENDER OFFER FOR OR A REQUEST OR
    20070H1150B4085                 - 26 -     

     1  INVITATION FOR TENDERS OF, OR ENTER INTO ANY AGREEMENT TO
     2  EXCHANGE SECURITIES OR SEEK TO ACQUIRE OR ACQUIRE IN THE OPEN
     3  MARKET OR OTHERWISE, ANY VOTING SECURITY OF A DOMESTIC INSURER
     4  IF, AFTER THE CONSUMMATION THEREOF, SUCH PERSON WOULD DIRECTLY
     5  OR INDIRECTLY OR BY CONVERSION OR BY EXERCISE OF ANY RIGHT TO
     6  ACQUIRE, BE IN CONTROL OF SUCH INSURER, AND NO PERSON SHALL
     7  ENTER INTO AN AGREEMENT TO MERGE OR CONSOLIDATE WITH OR
     8  OTHERWISE TO ACQUIRE CONTROL OF A DOMESTIC INSURER OR ANY PERSON
     9  CONTROLLING A DOMESTIC INSURER UNLESS, AT THE TIME ANY SUCH
    10  OFFER, REQUEST OR INVITATION IS MADE OR ANY SUCH AGREEMENT IS
    11  ENTERED INTO OR PRIOR TO THE ACQUISITION OF SUCH SECURITIES IF
    12  NO OFFER OR AGREEMENT IS INVOLVED, SUCH PERSON HAS FILED WITH
    13  THE DEPARTMENT AND HAS SENT TO SUCH INSURER A STATEMENT
    14  CONTAINING THE INFORMATION REQUIRED BY THIS SECTION AND SUCH
    15  OFFER, REQUEST, INVITATION, AGREEMENT OR ACQUISITION HAS BEEN
    16  APPROVED BY THE DEPARTMENT IN THE MANNER HEREINAFTER PRESCRIBED.
    17     (2)  FOR PURPOSES OF THIS SECTION, A "DOMESTIC INSURER" SHALL
    18  INCLUDE ANY PERSON CONTROLLING A DOMESTIC INSURER UNLESS SUCH
    19  PERSON AS DETERMINED BY THE DEPARTMENT IS EITHER DIRECTLY OR
    20  THROUGH ITS AFFILIATES PRIMARILY ENGAGED IN BUSINESS OTHER THAN
    21  THE BUSINESS OF INSURANCE. SUCH PERSON SHALL, HOWEVER, FILE A
    22  PREACQUISITION NOTIFICATION WITH THE DEPARTMENT CONTAINING THE
    23  INFORMATION SET FORTH IN SECTION 1403(C)(2) THIRTY (30) DAYS
    24  PRIOR TO THE PROPOSED EFFECTIVE DATE OF THE ACQUISITION. FAILURE
    25  TO FILE IS SUBJECT TO SECTION 1403(E)(3). FOR PURPOSES OF THIS
    26  SECTION, "PERSON" SHALL NOT INCLUDE ANY SECURITIES BROKER
    27  HOLDING, IN THE USUAL AND CUSTOMARY MANNER, LESS THAN TWENTY PER
    28  CENTUM (20%) OF THE VOTING SECURITIES OF AN INSURANCE COMPANY OR
    29  OF ANY PERSON WHICH CONTROLS AN INSURANCE COMPANY.
    30     (B)  THE STATEMENT TO BE FILED WITH THE DEPARTMENT UNDER THIS
    20070H1150B4085                 - 27 -     

     1  SECTION SHALL BE MADE UNDER OATH OR AFFIRMATION AND SHALL
     2  CONTAIN THE FOLLOWING INFORMATION:
     3     (1)  THE NAME AND ADDRESS OF EACH PERSON BY WHOM OR ON WHOSE
     4  BEHALF THE MERGER, CONSOLIDATION OR OTHER ACQUISITION OF CONTROL
     5  REFERRED TO IN SUBSECTION (A) IS TO BE EFFECTED, HEREINAFTER
     6  CALLED "ACQUIRING PARTY," AND
     7     (I)  IF SUCH PERSON IS AN INDIVIDUAL, HIS PRINCIPAL
     8  OCCUPATION AND ALL OFFICES AND POSITIONS HELD DURING THE PAST
     9  FIVE (5) YEARS, AND ANY CONVICTION OF CRIMES OTHER THAN MINOR
    10  TRAFFIC VIOLATIONS DURING THE PAST TEN (10) YEARS; OR
    11     (II)  IF SUCH PERSON IS NOT AN INDIVIDUAL, A REPORT OF THE
    12  NATURE OF ITS BUSINESS OPERATIONS DURING THE PAST FIVE (5) YEARS
    13  OR FOR SUCH LESSER PERIOD AS THE PERSON AND ANY PREDECESSORS
    14  THEREOF SHALL HAVE BEEN IN EXISTENCE; AN INFORMATIVE DESCRIPTION
    15  OF THE BUSINESS INTENDED TO BE DONE BY THE PERSON AND THE
    16  PERSON'S SUBSIDIARIES; AND A LIST OF ALL INDIVIDUALS WHO ARE OR
    17  WHO HAVE BEEN SELECTED TO BECOME DIRECTORS OR EXECUTIVE OFFICERS
    18  OF THE PERSON, OR WHO PERFORM OR WILL PERFORM FUNCTIONS
    19  APPROPRIATE TO THOSE POSITIONS. THIS LIST SHALL INCLUDE FOR EACH
    20  INDIVIDUAL THE INFORMATION REQUIRED BY SUBPARAGRAPH (I).
    21     (2)  THE SOURCE, NATURE AND AMOUNT OF THE CONSIDERATION USED
    22  OR TO BE USED IN EFFECTING THE MERGER, CONSOLIDATION OR OTHER
    23  ACQUISITION OF CONTROL, A DESCRIPTION OF ANY TRANSACTION WHEREIN
    24  FUNDS WERE OR ARE TO BE OBTAINED FOR ANY SUCH PURPOSE, INCLUDING
    25  ANY PLEDGE OF THE INSURER'S STOCK OR THE STOCK OF ANY OF ITS
    26  SUBSIDIARIES OR CONTROLLING AFFILIATES, AND THE IDENTITY OF
    27  PERSONS FURNISHING SUCH CONSIDERATION, PROVIDED, HOWEVER, THAT
    28  WHERE A SOURCE OF SUCH CONSIDERATION IS A LOAN MADE IN THE
    29  LENDER'S ORDINARY COURSE OF BUSINESS, THE IDENTITY OF THE LENDER
    30  SHALL REMAIN CONFIDENTIAL IF THE PERSON FILING SUCH STATEMENT SO
    20070H1150B4085                 - 28 -     

     1  REQUESTS.
     2     (3)  FULLY AUDITED FINANCIAL INFORMATION AS TO THE EARNINGS
     3  AND FINANCIAL CONDITION OF EACH ACQUIRING PARTY FOR THE
     4  PRECEDING FIVE (5) FISCAL YEARS OF EACH SUCH ACQUIRING PARTY, OR
     5  FOR SUCH LESSER PERIOD AS SUCH ACQUIRING PARTY AND ANY
     6  PREDECESSORS THEREOF SHALL HAVE BEEN IN EXISTENCE, AND SIMILAR
     7  UNAUDITED INFORMATION AS OF A DATE NOT EARLIER THAN NINETY (90)
     8  DAYS PRIOR TO THE FILING OF THE STATEMENT.
     9     (4)  ANY PLANS OR PROPOSALS WHICH EACH ACQUIRING PARTY MAY
    10  HAVE TO LIQUIDATE SUCH INSURER, TO SELL ITS ASSETS OR MERGE OR
    11  CONSOLIDATE IT WITH ANY PERSON OR TO MAKE ANY OTHER MATERIAL
    12  CHANGE IN ITS BUSINESS OR CORPORATE STRUCTURE OR MANAGEMENT.
    13     (5)  THE NUMBER OF SHARES OF ANY SECURITY REFERRED TO IN
    14  SUBSECTION (A) WHICH EACH ACQUIRING PARTY PROPOSES TO ACQUIRE,
    15  AND THE TERMS OF THE OFFER, REQUEST, INVITATION, AGREEMENT OR
    16  ACQUISITION REFERRED TO IN SUBSECTION (A), AND A STATEMENT AS TO
    17  THE METHOD BY WHICH THE FAIRNESS OF THE PROPOSAL WAS ARRIVED.
    18     (6)  THE AMOUNT OF EACH CLASS OF ANY SECURITY REFERRED TO IN
    19  SUBSECTION (A) WHICH IS BENEFICIALLY OWNED OR CONCERNING WHICH
    20  THERE IS A RIGHT TO ACQUIRE BENEFICIAL OWNERSHIP BY EACH
    21  ACQUIRING PARTY.
    22     (7)  A FULL DESCRIPTION OF ANY CONTRACTS, ARRANGEMENTS OR
    23  UNDERSTANDINGS WITH RESPECT TO ANY SECURITY REFERRED TO IN
    24  SUBSECTION (A) IN WHICH ANY ACQUIRING PARTY IS INVOLVED,
    25  INCLUDING, BUT NOT LIMITED TO, TRANSFER OF ANY OF THE
    26  SECURITIES, JOINT VENTURES, LOAN OR OPTION ARRANGEMENTS, PUTS OR
    27  CALLS, GUARANTEES OF LOANS, GUARANTEES AGAINST LOSS OR
    28  GUARANTEES OF PROFITS, DIVISION OF LOSSES OR PROFITS, OR THE
    29  GIVING OR WITHHOLDING OF PROXIES. SUCH DESCRIPTION SHALL
    30  IDENTIFY THE PERSONS WITH WHOM SUCH CONTRACTS, ARRANGEMENTS OR
    20070H1150B4085                 - 29 -     

     1  UNDERSTANDINGS HAVE BEEN ENTERED INTO.
     2     (8)  A DESCRIPTION OF THE PURCHASE OF ANY SECURITY REFERRED
     3  TO IN SUBSECTION (A) DURING THE TWELVE CALENDAR MONTHS PRECEDING
     4  THE FILING OF THE STATEMENT, BY ANY ACQUIRING PARTY, INCLUDING
     5  THE DATES OF PURCHASE, NAMES OF THE PURCHASERS AND CONSIDERATION
     6  PAID OR AGREED TO BE PAID THEREFOR.
     7     (9)  A DESCRIPTION OF ANY RECOMMENDATIONS TO PURCHASE ANY
     8  SECURITY REFERRED TO IN SUBSECTION (A) MADE DURING THE TWELVE
     9  CALENDAR MONTHS PRECEDING THE FILING OF THE STATEMENT, BY ANY
    10  ACQUIRING PARTY, OR BY ANYONE BASED UPON INTERVIEWS OR AT THE
    11  SUGGESTION OF SUCH ACQUIRING PARTY.
    12     (10)  COPIES OF ALL TENDER OFFERS FOR, REQUESTS OR
    13  INVITATIONS FOR TENDERS OF, EXCHANGE OFFERS FOR AND AGREEMENTS
    14  TO ACQUIRE OR EXCHANGE ANY SECURITIES REFERRED TO IN SUBSECTION
    15  (A) AND, IF DISTRIBUTED, OF ADDITIONAL SOLICITING MATERIAL
    16  RELATING THERETO.
    17     (11)  THE TERM OF ANY AGREEMENT, CONTRACT OR UNDERSTANDING
    18  MADE WITH OR PROPOSED TO BE MADE WITH ANY BROKER-DEALER AS TO
    19  SOLICITATION OF SECURITIES REFERRED TO IN SUBSECTION (A) FOR
    20  TENDER AND THE AMOUNT OF ANY FEES, COMMISSIONS OR OTHER
    21  COMPENSATION TO BE PAID TO BROKER-DEALERS WITH REGARD THERETO.
    22     (12)  SUCH ADDITIONAL INFORMATION AS THE DEPARTMENT MAY BY
    23  RULE OR REGULATION PRESCRIBE AS NECESSARY OR APPROPRIATE FOR THE
    24  PROTECTION OF POLICYHOLDERS OF THE INSURER OR IN THE PUBLIC
    25  INTEREST.
    26     (C)  IF THE PERSON REQUIRED TO FILE THE STATEMENT REFERRED TO
    27  IN SUBSECTION (A) IS A PARTNERSHIP, LIMITED PARTNERSHIP,
    28  SYNDICATE OR OTHER GROUP, THE DEPARTMENT MAY REQUIRE THAT THE
    29  INFORMATION CALLED FOR BY SUBSECTION (B)(1) THROUGH (12) SHALL
    30  BE GIVEN WITH RESPECT TO EACH PARTNER OF SUCH PARTNERSHIP OR
    20070H1150B4085                 - 30 -     

     1  LIMITED PARTNERSHIP, EACH MEMBER OF SUCH SYNDICATE OR GROUP AND
     2  EACH PERSON WHO CONTROLS SUCH PARTNER OR MEMBER. IF ANY SUCH
     3  PARTNER, MEMBER OR PERSON IS A CORPORATION OR THE PERSON
     4  REQUIRED TO FILE THE STATEMENT REFERRED TO IN SUBSECTION (A) IS
     5  A CORPORATION, THE DEPARTMENT MAY REQUIRE THAT THE INFORMATION
     6  CALLED FOR BY SUBSECTION (B)(1) THROUGH (12) SHALL BE GIVEN WITH
     7  RESPECT TO SUCH CORPORATION, EACH OFFICER AND DIRECTOR OF SUCH
     8  CORPORATION AND EACH PERSON WHO IS DIRECTLY OR INDIRECTLY THE
     9  BENEFICIAL OWNER OF MORE THAN TEN PER CENTUM (10%) OF THE
    10  OUTSTANDING VOTING SECURITIES OF SUCH CORPORATION.
    11     (D)  IF ANY MATERIAL CHANGE OCCURS IN THE FACTS SET FORTH IN
    12  THE STATEMENT FILED WITH THE DEPARTMENT AND SENT TO SUCH INSURER
    13  PURSUANT TO THIS SECTION, AN AMENDMENT SETTING FORTH SUCH
    14  CHANGE, TOGETHER WITH COPIES OF ALL DOCUMENTS AND OTHER MATERIAL
    15  RELEVANT TO SUCH CHANGE, SHALL BE FILED WITH THE DEPARTMENT AND
    16  SENT TO SUCH INSURER WITHIN TWO (2) BUSINESS DAYS AFTER THE
    17  PERSON LEARNS OF SUCH CHANGE.
    18     (E)  IF ANY OFFER, REQUEST, INVITATION, AGREEMENT OR
    19  ACQUISITION REFERRED TO IN SUBSECTION (A) IS PROPOSED TO BE MADE
    20  BY MEANS OF A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
    21  1933 (48 STAT. 74, 15 U.S.C. § 77A ET SEQ.), OR IN CIRCUMSTANCES
    22  REQUIRING THE DISCLOSURE OF SIMILAR INFORMATION UNDER THE
    23  SECURITIES EXCHANGE ACT OF 1934 (48 STAT. 881, 15 U.S.C. § 78A
    24  ET SEQ.), OR UNDER A STATE LAW REQUIRING SIMILAR REGISTRATION OR
    25  DISCLOSURE, THE PERSON REQUIRED TO FILE THE STATEMENT REFERRED
    26  TO IN SUBSECTION (A) MAY UTILIZE SUCH DOCUMENTS IN FURNISHING
    27  THE INFORMATION CALLED FOR BY THAT STATEMENT.
    28     (F)  (1)  THE DEPARTMENT SHALL APPROVE ANY MERGER,
    29  CONSOLIDATION OR OTHER ACQUISITION OF CONTROL REFERRED TO IN
    30  SUBSECTION (A) UNLESS IT FINDS ANY OF THE FOLLOWING:
    20070H1150B4085                 - 31 -     

     1     (I)  AFTER THE [CHANGE] MERGER, CONSOLIDATION OR OTHER
     2  ACQUISITION OF CONTROL, THE DOMESTIC INSURER REFERRED TO IN
     3  SUBSECTION (A) WOULD NOT BE ABLE TO SATISFY THE REQUIREMENTS FOR
     4  THE ISSUANCE OF A LICENSE TO WRITE THE LINE OR LINES OF
     5  INSURANCE FOR WHICH IT IS PRESENTLY LICENSED.
     6     (II)  THE EFFECT OF THE MERGER, CONSOLIDATION OR OTHER
     7  ACQUISITION OF CONTROL WOULD BE TO SUBSTANTIALLY LESSEN
     8  COMPETITION IN INSURANCE IN THIS COMMONWEALTH OR TEND TO CREATE
     9  A MONOPOLY THEREIN. IN APPLYING THE COMPETITIVE STANDARD IN THIS
    10  SUBPARAGRAPH:
    11     (A)  THE INFORMATIONAL REQUIREMENTS OF SECTION 1403(C)(2) AND
    12  THE STANDARDS OF SECTION 1403(D)(2) SHALL APPLY;
    13     (B)  THE MERGER, CONSOLIDATION OR OTHER ACQUISITION OF
    14  CONTROL SHALL NOT BE DISAPPROVED IF THE DEPARTMENT FINDS THAT
    15  ANY OF THE SITUATIONS MEETING THE CRITERIA PROVIDED BY SECTION
    16  1403(D)(3) EXIST; AND
    17     (C)  THE DEPARTMENT MAY CONDITION THE APPROVAL OF THE MERGER,
    18  CONSOLIDATION OR OTHER ACQUISITION OF CONTROL ON THE REMOVAL OF
    19  THE BASIS OF DISAPPROVAL WITHIN A SPECIFIED PERIOD OF TIME.
    20     (III)  THE FINANCIAL CONDITION OF ANY ACQUIRING PARTY IS SUCH
    21  AS MIGHT JEOPARDIZE THE FINANCIAL STABILITY OF THE INSURER OR
    22  PREJUDICE THE INTEREST OF ITS POLICYHOLDERS.
    23     (IV)  THE PLANS OR PROPOSALS WHICH THE ACQUIRING PARTY HAS TO
    24  LIQUIDATE THE INSURER, SELL ITS ASSETS OR CONSOLIDATE OR MERGE
    25  IT WITH ANY PERSON, OR TO MAKE ANY OTHER MATERIAL CHANGE IN ITS
    26  BUSINESS OR CORPORATE STRUCTURE OR MANAGEMENT, ARE UNFAIR AND
    27  UNREASONABLE TO POLICYHOLDERS OF THE INSURER AND NOT IN THE
    28  PUBLIC INTEREST.
    29     (V)  THE COMPETENCE, EXPERIENCE AND INTEGRITY OF THOSE
    30  PERSONS WHO WOULD CONTROL THE OPERATION OF THE INSURER ARE SUCH
    20070H1150B4085                 - 32 -     

     1  THAT IT WOULD NOT BE IN THE INTEREST OF POLICYHOLDERS OF THE
     2  INSURER AND OF THE PUBLIC TO PERMIT THE MERGER, CONSOLIDATION OR
     3  OTHER ACQUISITION OF CONTROL.
     4     (VI)  THE [ACQUISITION] MERGER, CONSOLIDATION OR OTHER
     5  ACQUISITION OF CONTROL IS LIKELY TO BE HAZARDOUS OR PREJUDICIAL
     6  TO THE INSURANCE BUYING PUBLIC.
     7     (VII)  THE MERGER, CONSOLIDATION OR OTHER ACQUISITION OF
     8  CONTROL IS NOT IN COMPLIANCE WITH THE LAWS OF THIS COMMONWEALTH,
     9  INCLUDING ARTICLE VIII-A.
    10     (2)  IF THE MERGER, CONSOLIDATION OR OTHER ACQUISITION OF
    11  CONTROL IS APPROVED, THE DEPARTMENT SHALL SO NOTIFY THE PERSON
    12  FILING THE STATEMENT AND THE INSURER [WHOSE STOCK] THAT IS
    13  PROPOSED TO BE ACQUIRED, AND SUCH A DETERMINATION IS HEREAFTER
    14  REFERRED TO AS AN APPROVING DETERMINATION. NOTICE SHALL ALSO BE
    15  GIVEN BY THE DEPARTMENT OF ANY DETERMINATION WHICH IS NOT AN
    16  APPROVING DETERMINATION. IF AN APPROVING DETERMINATION IS MADE
    17  BY THE DEPARTMENT AND NOT OTHERWISE, THE PROPOSED OFFER AND
    18  ACQUISITION MAY THEREAFTER BE MADE AND CONSUMMATED ON THE TERMS
    19  AND CONDITIONS AND IN THE MANNER DESCRIBED IN THE STATEMENT AND
    20  SUBJECT TO SUCH CONDITIONS AS MAY BE PRESCRIBED BY THE
    21  DEPARTMENT AS HEREINAFTER PROVIDED. AN APPROVING DETERMINATION
    22  BY THE DEPARTMENT SHALL BE DEEMED TO EXTEND TO OFFERS OR
    23  ACQUISITIONS MADE PURSUANT THERETO WITHIN ONE YEAR FOLLOWING THE
    24  DATE OF DETERMINATION. THE DEPARTMENT MAY, AS A CONDITION OF ITS
    25  APPROVING DETERMINATION, REQUIRE THE INCLUSION IN ANY OFFER OF
    26  PROVISIONS REQUIRING THE OFFER TO REMAIN OPEN A SPECIFIED
    27  MINIMUM LENGTH OF TIME, PERMITTING WITHDRAWAL OF SHARES
    28  DEPOSITED PRIOR TO THE TIME THE OFFEROR BECOMES BOUND TO
    29  CONSUMMATE THE ACQUISITION AND REQUIRING PRO RATA ACCEPTANCE OF
    30  ANY SHARES DEPOSITED PURSUANT TO THE OFFER. THE DEPARTMENT SHALL
    20070H1150B4085                 - 33 -     

     1  HOLD A HEARING BEFORE MAKING THE DETERMINATION REQUIRED BY THIS
     2  SUBSECTION IF, WITHIN TEN (10) DAYS FOLLOWING THE FILING WITH
     3  THE DEPARTMENT OF THE STATEMENT, WRITTEN REQUEST FOR THE HOLDING
     4  OF SUCH HEARING IS MADE EITHER BY THE PERSON PROPOSING TO MAKE
     5  THE ACQUISITION, BY THE INSURER [WHOSE STOCK] THAT IS PROPOSED
     6  TO BE ACQUIRED OR, IF [SUCH] THE ISSUER OF STOCK PROPOSED TO BE
     7  ACQUIRED IS NOT AN INSURER, BY THE [INSURANCE COMPANY] INSURER
     8  CONTROLLED BY SUCH ISSUER. OTHERWISE, THE DEPARTMENT SHALL
     9  DETERMINE IN ITS DISCRETION WHETHER SUCH A HEARING SHALL BE
    10  HELD. THIRTY (30) DAYS' NOTICE OF ANY SUCH HEARING SHALL BE
    11  GIVEN TO THE PERSON PROPOSING TO MAKE THE ACQUISITION, TO THE
    12  ISSUER WHOSE STOCK IS PROPOSED TO BE ACQUIRED AND, IF SUCH
    13  ISSUER IS NOT AN INSURER, TO THE INSURANCE COMPANY CONTROLLED BY
    14  SUCH ISSUER. NOTICE OF ANY SUCH HEARING SHALL ALSO BE GIVEN TO
    15  SUCH OTHER PERSONS, IF ANY, AS THE DEPARTMENT MAY DETERMINE.
    16     (3)  THE DEPARTMENT MAY RETAIN AT THE ACQUIRING PERSON'S
    17  EXPENSE ANY ATTORNEYS, ACTUARIES, ACCOUNTANTS AND OTHER EXPERTS
    18  NOT OTHERWISE A PART OF THE DEPARTMENT'S STAFF AS MAY BE
    19  REASONABLY NECESSARY TO ASSIST THE DEPARTMENT IN REVIEWING THE
    20  PROPOSED ACQUISITION OF CONTROL.
    21     (G)  THE PROVISIONS OF THIS SECTION SHALL NOT APPLY TO ANY
    22  OFFER, REQUEST, INVITATION, AGREEMENT OR ACQUISITION WHICH THE
    23  DEPARTMENT BY ORDER SHALL EXEMPT THEREFROM AS:
    24     (1)  NOT HAVING BEEN MADE OR ENTERED INTO FOR THE PURPOSE AND
    25  NOT HAVING THE EFFECT OF CHANGING OR INFLUENCING THE CONTROL OF
    26  A DOMESTIC INSURER; OR
    27     (2)  AS OTHERWISE NOT COMPREHENDED WITHIN THE PURPOSES OF
    28  THIS SECTION.
    29     (H)  THE FOLLOWING SHALL CONSTITUTE A VIOLATION OF THIS
    30  SECTION:
    20070H1150B4085                 - 34 -     

     1     (1)  THE FAILURE TO FILE ANY STATEMENT, AMENDMENT OR OTHER
     2  MATERIAL REQUIRED TO BE FILED PURSUANT TO SUBSECTION (A) OR (B);
     3     (2)  THE EFFECTUATION OR ANY ATTEMPT TO EFFECTUATE AN
     4  ACQUISITION OF CONTROL OF OR MERGER OR CONSOLIDATION WITH A
     5  DOMESTIC INSURER UNLESS THE DEPARTMENT HAS GIVEN ITS APPROVAL
     6  THERETO; OR
     7     (3)  A VIOLATION OF SECTION 819-A.
     8     (I)  THE DEPARTMENT SHALL, WITHIN SEVENTY-TWO HOURS OF
     9  RECEIVING A STATEMENT FILED UNDER THIS SECTION, PROVIDE
    10  NOTIFICATION TO THE OFFICE OF ATTORNEY GENERAL THAT THE FILING
    11  WAS RECEIVED.
    12     (J)  AS USED IN THIS SECTION, THE TERM "ANNUAL STATEMENT"
    13  SHALL MEAN THE ANNUAL REPORT OF THE FINANCIAL CONDITION REQUIRED
    14  TO BE FILED UNDER 40 PA.C.S. § 6331 (RELATING TO REPORTS AND
    15  EXAMINATIONS).
    16     SECTION 6.  SECTION 1403(A), (B) AND (D), ADDED DECEMBER 18,
    17  1992 (P.L.1519, NO.178), ARE AMENDED TO READ:
    18     SECTION 1403.  ACQUISITIONS INVOLVING INSURERS NOT OTHERWISE
    19  COVERED.--(A)  AS USED IN THIS SECTION THE FOLLOWING WORDS AND
    20  PHRASES SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS
    21  SUBSECTION:
    22     "ACQUISITION."  ANY AGREEMENT, ARRANGEMENT OR ACTIVITY THE
    23  CONSUMMATION OF WHICH RESULTS IN A PERSON ACQUIRING, DIRECTLY OR
    24  INDIRECTLY, THE CONTROL OF ANOTHER PERSON AND INCLUDES, BUT IS
    25  NOT LIMITED TO, THE ACQUISITION OF VOTING SECURITIES, THE
    26  ACQUISITION OF ASSETS, BULK REINSURANCE [AND], MERGERS AND
    27  CONSOLIDATIONS.
    28     "INVOLVED INSURER."  INCLUDES AN INSURER WHICH EITHER
    29  ACQUIRES OR IS ACQUIRED, IS AFFILIATED WITH AN ACQUIRER OR
    30  ACQUIRED OR IS THE RESULT OF A MERGER OR CONSOLIDATION.
    20070H1150B4085                 - 35 -     

     1     (B)  (1)  EXCEPT AS EXEMPTED IN PARAGRAPH (2), THIS SECTION
     2  APPLIES TO ANY ACQUISITION IN WHICH THERE IS A CHANGE IN CONTROL
     3  OF AN INSURER AUTHORIZED TO DO BUSINESS IN THIS COMMONWEALTH.
     4     (2)  THIS SECTION SHALL NOT APPLY TO ANY OF THE FOLLOWING:
     5     (I)  AN ACQUISITION SUBJECT TO APPROVAL OR DISAPPROVAL BY THE
     6  DEPARTMENT PURSUANT TO SECTION 1402.
     7     (II)  A PURCHASE OF SECURITIES SOLELY FOR INVESTMENT PURPOSES
     8  SO LONG AS SUCH SECURITIES ARE NOT USED BY VOTING OR OTHERWISE
     9  TO CAUSE OR ATTEMPT TO CAUSE THE SUBSTANTIAL LESSENING OF
    10  COMPETITION IN ANY INSURANCE MARKET IN THIS COMMONWEALTH. IF A
    11  PURCHASE OF SECURITIES RESULTS IN A PRESUMPTION OF CONTROL AS
    12  DESCRIBED IN THE DEFINITION OF "CONTROL" IN SECTION [1301] 1401,
    13  IT IS NOT SOLELY FOR INVESTMENT PURPOSES UNLESS THE INSURANCE
    14  DEPARTMENT OF THE INSURER'S STATE OF DOMICILE ACCEPTS A
    15  DISCLAIMER OF CONTROL OR AFFIRMATIVELY FINDS THAT CONTROL DOES
    16  NOT EXIST AND SUCH DISCLAIMER ACTION OR AFFIRMATIVE FINDING IS
    17  COMMUNICATED BY THE DOMICILIARY INSURANCE DEPARTMENT TO THE
    18  INSURANCE DEPARTMENT OF THE COMMONWEALTH.
    19     (III)  THE ACQUISITION OF A PERSON BY ANOTHER PERSON WHEN
    20  BOTH PERSONS ARE NEITHER DIRECTLY NOR THROUGH AFFILIATES
    21  PRIMARILY ENGAGED IN THE BUSINESS OF INSURANCE, IF
    22  PREACQUISITION NOTIFICATION IS FILED WITH THE DEPARTMENT IN
    23  ACCORDANCE WITH SUBSECTION (C)(2) THIRTY (30) DAYS PRIOR TO THE
    24  PROPOSED EFFECTIVE DATE OF THE ACQUISITION. HOWEVER, SUCH
    25  PREACQUISITION NOTIFICATION IS NOT REQUIRED FOR EXCLUSION FROM
    26  THIS SECTION IF THE ACQUISITION WOULD OTHERWISE BE EXCLUDED FROM
    27  THIS SECTION BY THIS PARAGRAPH.
    28     (IV)  THE ACQUISITION OF ALREADY AFFILIATED PERSONS.
    29     (V)  AN ACQUISITION IF, AS AN IMMEDIATE RESULT OF THE
    30  ACQUISITION:
    20070H1150B4085                 - 36 -     

     1     (A)  IN NO MARKET WOULD THE COMBINED MARKET SHARE OF THE
     2  INVOLVED INSURERS EXCEED FIVE PER CENTUM (5%) OF THE TOTAL
     3  MARKET;
     4     (B)  THERE WOULD BE NO INCREASE IN ANY MARKET SHARE; OR
     5     (C)  IN NO MARKET WOULD:
     6     (I)  THE COMBINED MARKET SHARE OF THE INVOLVED INSURERS
     7  EXCEEDS TWELVE PER CENTUM (12%) OF THE TOTAL MARKET; AND
     8     (II)  THE MARKET SHARE INCREASES BY MORE THAN TWO PER CENTUM
     9  (2%) OF THE TOTAL MARKET.
    10  FOR THE PURPOSE OF THIS SUBPARAGRAPH, A MARKET MEANS DIRECT
    11  WRITTEN INSURANCE PREMIUM IN THIS COMMONWEALTH FOR A LINE OF
    12  BUSINESS AS CONTAINED IN THE ANNUAL STATEMENT REQUIRED TO BE
    13  FILED BY INSURERS LICENSED TO DO BUSINESS IN THIS COMMONWEALTH.
    14     (VI)  AN ACQUISITION FOR WHICH A PREACQUISITION NOTIFICATION
    15  WOULD BE REQUIRED PURSUANT TO THIS SECTION DUE SOLELY TO THE
    16  RESULTING EFFECT ON THE OCEAN MARINE INSURANCE LINE OF BUSINESS.
    17     (VII)  AN ACQUISITION OF AN INSURER WHOSE DOMICILIARY
    18  INSURANCE DEPARTMENT AFFIRMATIVELY FINDS THAT SUCH INSURER IS IN
    19  FAILING CONDITION; THERE IS A LACK OF FEASIBLE ALTERNATIVE TO
    20  IMPROVING SUCH CONDITION; THE PUBLIC BENEFITS OF IMPROVING SUCH
    21  INSURER'S CONDITION THROUGH THE ACQUISITION EXCEED THE PUBLIC
    22  BENEFITS THAT WOULD ARISE FROM NOT LESSENING COMPETITION; AND
    23  SUCH FINDINGS ARE COMMUNICATED BY THE DOMICILIARY INSURANCE
    24  DEPARTMENT TO THE INSURANCE DEPARTMENT OF THE COMMONWEALTH.
    25     (3)  SECTIONS 1409(B) AND (C) AND 1411 SHALL NOT APPLY TO
    26  ACQUISITIONS PROVIDED FOR IN THIS SUBSECTION.
    27     * * *
    28     (D)  (1)  THE DEPARTMENT MAY ENTER AN ORDER UNDER SUBSECTION
    29  (E)(1) WITH RESPECT TO AN ACQUISITION IF THERE IS SUBSTANTIAL
    30  EVIDENCE THAT THE EFFECT OF THE ACQUISITION MAY BE SUBSTANTIALLY
    20070H1150B4085                 - 37 -     

     1  TO LESSEN COMPETITION IN ANY LINE OF INSURANCE IN THIS
     2  COMMONWEALTH OR TEND TO CREATE A MONOPOLY THEREIN OR IF THE
     3  INSURER FAILS TO FILE ADEQUATE INFORMATION IN COMPLIANCE WITH
     4  SUBSECTION (C).
     5     (2)  IN DETERMINING WHETHER A PROPOSED ACQUISITION WOULD
     6  VIOLATE THE COMPETITIVE STANDARD OF PARAGRAPH (1), THE
     7  DEPARTMENT SHALL CONSIDER THE FOLLOWING:
     8     (I)  ANY ACQUISITION COVERED UNDER SUBSECTION (B) INVOLVING
     9  TWO OR MORE INSURERS COMPETING IN THE SAME MARKET IS PRIMA FACIE
    10  EVIDENCE OF VIOLATION OF THE COMPETITIVE STANDARDS AS FOLLOWS:
    11     (A)  IF THE MARKET IS HIGHLY CONCENTRATED AND THE INVOLVED
    12  INSURERS POSSESS THE FOLLOWING SHARES OF THE MARKET:
    13               INSURER A           INSURER B
    14                    4%               4% OR MORE
    15                   10%               2% OR MORE
    16                   15%               1% OR MORE; OR
    17     (B)  IF THE MARKET IS NOT HIGHLY CONCENTRATED AND THE
    18  INVOLVED INSURERS POSSESS THE FOLLOWING SHARES OF THE MARKET:
    19               INSURER A           INSURER B
    20                    5%               5% OR MORE
    21                   10%               4% OR MORE
    22                   15%               3% OR MORE
    23                   19%               1% OR MORE.
    24  A HIGHLY CONCENTRATED MARKET IS ONE IN WHICH THE SHARE OF THE
    25  FOUR LARGEST INSURERS IS SEVENTY-FIVE PER CENTUM (75%) OR MORE
    26  OF THE MARKET. PERCENTAGES NOT SHOWN IN THE TABLES ARE
    27  INTERPOLATED PROPORTIONATELY TO THE PERCENTAGES THAT ARE SHOWN.
    28  IF MORE THAN TWO INSURERS ARE INVOLVED, EXCEEDING THE TOTAL OF
    29  THE TWO COLUMNS IN THE TABLE IS PRIMA FACIE EVIDENCE OF
    30  VIOLATION OF THE COMPETITIVE STANDARD IN PARAGRAPH (1). FOR THE
    20070H1150B4085                 - 38 -     

     1  PURPOSE OF THIS SUBPARAGRAPH, THE INSURER WITH THE LARGEST SHARE
     2  OF THE MARKET SHALL BE DEEMED TO BE INSURER A.
     3     (II)  THERE IS A SIGNIFICANT TREND TOWARD INCREASED
     4  CONCENTRATION WHEN THE AGGREGATE MARKET SHARE OF ANY GROUPING OF
     5  THE LARGEST INSURERS IN THE MARKET, FROM THE TWO LARGEST TO THE
     6  EIGHT LARGEST, HAS INCREASED BY SEVEN PER CENTUM (7%) OR MORE OF
     7  THE MARKET OVER A PERIOD OF TIME EXTENDING FROM ANY BASE YEAR
     8  FIVE (5) TO TEN (10) YEARS PRIOR TO THE ACQUISITION UP TO THE
     9  TIME OF THE ACQUISITION. ANY ACQUISITION [OR MERGER], MERGER OR
    10  CONSOLIDATION COVERED UNDER SUBSECTION (B) INVOLVING TWO OR MORE
    11  INSURERS COMPETING IN THE SAME MARKET IS PRIMA FACIE EVIDENCE OF
    12  VIOLATION OF THE COMPETITIVE STANDARD IN PARAGRAPH (1) IF:
    13     (A)  THERE IS A SIGNIFICANT TREND TOWARD INCREASED
    14  CONCENTRATION IN THE MARKET;
    15     (B)  ONE OF THE INSURERS INVOLVED IS ONE OF THE INSURERS IN A
    16  GROUPING OF SUCH LARGE INSURERS SHOWING THE REQUISITE INCREASE
    17  IN THE MARKET SHARE; AND
    18     (C)  ANOTHER INVOLVED INSURER'S MARKET IS TWO PER CENTUM (2%)
    19  OR MORE.
    20     (III)  FOR THE PURPOSES OF THIS PARAGRAPH:
    21     (A)  THE TERM "INSURER" INCLUDES ANY COMPANY OR GROUP OF
    22  COMPANIES UNDER COMMON MANAGEMENT, OWNERSHIP OR CONTROL.
    23     (B)  THE TERM "MARKET" MEANS THE RELEVANT PRODUCT AND
    24  GEOGRAPHICAL MARKETS. IN DETERMINING THE RELEVANT PRODUCT AND
    25  GEOGRAPHICAL MARKETS, THE DEPARTMENT SHALL GIVE DUE
    26  CONSIDERATION TO, AMONG OTHER THINGS, THE DEFINITIONS OR
    27  GUIDELINES, IF ANY, PROMULGATED BY THE NAIC AND TO INFORMATION,
    28  IF ANY, SUBMITTED BY PARTIES TO THE ACQUISITION. IN THE ABSENCE
    29  OF SUFFICIENT INFORMATION TO THE CONTRARY, THE RELEVANT PRODUCT
    30  MARKET IS ASSUMED TO BE THE DIRECT WRITTEN INSURANCE PREMIUM FOR
    20070H1150B4085                 - 39 -     

     1  A LINE OF BUSINESS, SUCH LINE BEING THAT USED IN THE ANNUAL
     2  STATEMENT REQUIRED TO BE FILED BY INSURERS DOING BUSINESS IN
     3  THIS COMMONWEALTH AND THE RELEVANT GEOGRAPHICAL MARKET IS
     4  ASSUMED TO BE THIS COMMONWEALTH.
     5     (C)  THE BURDEN OF SHOWING PRIMA FACIE EVIDENCE OF VIOLATION
     6  OF THE COMPETITIVE STANDARD RESTS UPON THE COMMISSIONER.
     7     (IV)  EVEN THOUGH AN ACQUISITION IS NOT PRIMA FACIE VIOLATIVE
     8  OF THE COMPETITIVE STANDARD UNDER SUBPARAGRAPHS (I) AND (II),
     9  THE DEPARTMENT MAY ESTABLISH THE REQUISITE ANTICOMPETITIVE
    10  EFFECT BASED UPON OTHER SUBSTANTIAL EVIDENCE. EVEN THOUGH AN
    11  ACQUISITION IS PRIMA FACIE VIOLATIVE OF THE COMPETITIVE STANDARD
    12  UNDER SUBPARAGRAPHS (I) AND (II), A PARTY MAY ESTABLISH THE
    13  ABSENCE OF THE REQUISITE ANTICOMPETITIVE EFFECT BASED UPON OTHER
    14  SUBSTANTIAL EVIDENCE. RELEVANT FACTORS IN MAKING A DETERMINATION
    15  UNDER THIS PARAGRAPH INCLUDE, BUT ARE NOT LIMITED TO, THE
    16  FOLLOWING: MARKET SHARES, VOLATILITY OF RANKING OF MARKET
    17  LEADERS, NUMBER OF COMPETITORS, CONCENTRATION, TREND OF
    18  CONCENTRATION IN THE INDUSTRY AND EASE OF ENTRY AND EXIT INTO
    19  THE MARKET.
    20     (3)  AN ORDER MAY NOT BE ENTERED UNDER SUBSECTION (E)(1) IF:
    21     (I)  THE ACQUISITION WILL YIELD SUBSTANTIAL ECONOMIES OF
    22  SCALE OR ECONOMIES IN RESOURCE UTILIZATION THAT CANNOT BE
    23  FEASIBLY ACHIEVED IN ANY OTHER WAY, AND THE PUBLIC BENEFITS
    24  WHICH WOULD ARISE FROM SUCH ECONOMIES EXCEED THE PUBLIC BENEFITS
    25  WHICH WOULD ARISE FROM NOT LESSENING COMPETITION; OR
    26     (II)  THE ACQUISITION WILL SUBSTANTIALLY INCREASE THE
    27  AVAILABILITY OF INSURANCE, AND THE PUBLIC BENEFITS OF SUCH
    28  INCREASE EXCEED THE PUBLIC BENEFITS WHICH WOULD ARISE FROM NOT
    29  LESSENING COMPETITION.
    30     * * *
    20070H1150B4085                 - 40 -     

     1     SECTION 7.  THE ACT IS AMENDED BY ADDING SECTIONS TO READ:
     2     SECTION 1403.1.  COMMITTEE REVIEW.--(A)  THE BANKING AND
     3  INSURANCE COMMITTEE OF THE SENATE AND THE INSURANCE COMMITTEE OF
     4  THE HOUSE OF REPRESENTATIVES MAY REVIEW AN APPLICATION OR
     5  STATEMENT SUBMITTED BY A HOSPITAL PLAN CORPORATION OR
     6  PROFESSIONAL HEALTH SERVICES PLAN CORPORATION SEEKING THE
     7  APPROVAL OF A MERGER, CONSOLIDATION OR OTHER ACQUISITION OF
     8  CONTROL OF A HOSPITAL PLAN CORPORATION OR PROFESSIONAL HEALTH
     9  SERVICES PLAN CORPORATION UNDER THIS ACT.
    10     (B)  THE BANKING AND INSURANCE COMMITTEE OF THE SENATE AND
    11  THE INSURANCE COMMITTEE OF THE HOUSE OF REPRESENTATIVES SHALL
    12  HAVE THE FOLLOWING POWERS AND DUTIES:
    13     (1)  TO CONVENE THE COMMITTEE FOR PURPOSES OF REVIEWING AN
    14  APPLICATION FOR APPROVAL OF A MERGER, CONSOLIDATION OR OTHER
    15  ACQUISITION OF CONTROL UNDER THIS SECTION.
    16     (2)  TO RECEIVE AND REVIEW ALL FILINGS SUBMITTED TO THE
    17  DEPARTMENT RELATING TO THE MERGER, CONSOLIDATION OR OTHER
    18  ACQUISITION OF CONTROL AND ALL ACCOMPANYING DATA AND OTHER
    19  INFORMATION. THIS PARAGRAPH SHALL NOT APPLY TO INFORMATION
    20  DEEMED CONFIDENTIAL OR PROPRIETARY BY THE DEPARTMENT.
    21     (3)  TO CONSULT EXPERTS, HOLD HEARINGS AND OBTAIN ADDITIONAL
    22  INFORMATION RELATING TO THE MERGER, CONSOLIDATION OR OTHER
    23  ACQUISITION OF CONTROL.
    24     (4)  TO DEVELOP WRITTEN COMMENTS AND RECOMMENDATIONS ON THE
    25  MERGER, CONSOLIDATION OR ACQUISITION OF CONTROL AND SUBMIT THEM
    26  TO THE DEPARTMENT WITHIN FORTY-FIVE (45) DAYS OF THE CLOSE OF
    27  THE PUBLIC COMMENT PERIOD ESTABLISHED UNDER THIS PARAGRAPH,
    28  DEVELOPED BY THE DEPARTMENT ON THE MERGER, CONSOLIDATION OR
    29  OTHER ACQUISITION OF CONTROL. THE DEPARTMENT SHALL PUBLISH THE
    30  DATE OF THE CLOSE OF THE PUBLIC COMMENT PERIOD IN THE
    20070H1150B4085                 - 41 -     

     1  PENNSYLVANIA BULLETIN PRIOR TO FINAL CLOSURE OF THE RECORD. THE
     2  DEPARTMENT MAY ISSUE A FINAL ORDER AND DETERMINATION ON OR AFTER
     3  ONE HUNDRED FIVE (105) DAYS FOLLOWING THE PUBLIC COMMENT PERIOD.
     4     (C)  THE COMMISSIONER, THE DEPARTMENT AND ITS ATTORNEYS AND
     5  EXPERTS, INCLUDING EXPERTS EMPLOYED OR RETAINED BY THE
     6  DEPARTMENT, SHALL BE AVAILABLE TO PROVIDE TESTIMONY TO EACH
     7  COMMITTEE RELATING TO THE MERGER, CONSOLIDATION OR OTHER
     8  ACQUISITION OF CONTROL. NOTHING IN THIS ACT SHALL AFFECT ANY
     9  PRIVILEGES OR IMMUNITIES OF THE DEPARTMENT OR ITS ATTORNEYS,
    10  EXPERTS OR CONSULTANTS. THE DEPARTMENT OR ITS ATTORNEYS, EXPERTS
    11  OR CONSULTANTS SHALL NOT BE REQUIRED TO APPEAR BEFORE EITHER
    12  COMMITTEE WITHIN THIRTY (30) DAYS FOLLOWING THE DEPARTMENT'S
    13  ISSUANCE OF A FINAL ORDER AND DETERMINATION.
    14     (D)  THE DEPARTMENT SHALL PROVIDE A DETAILED WRITTEN RESPONSE
    15  TO EACH COMMENT AND RECOMMENDATION SUBMITTED BY THE BANKING AND
    16  INSURANCE COMMITTEE OF THE SENATE OR THE INSURANCE COMMITTEE OF
    17  THE HOUSE OF REPRESENTATIVES IN ITS FINAL ORDER. THE ORDER AND
    18  DETERMINATION SHALL NOT BE ISSUED BEFORE SIXTY (60) DAYS HAVE
    19  ELAPSED FOLLOWING RECEIPT OF THE COMMENTS AND RECOMMENDATIONS
    20  UNDER SUBSECTION (B)(4).
    21     (E)  IN ORDER TO APPROVE A MERGER, CONSOLIDATION OR OTHER
    22  ACQUISITION OF CONTROL OF A HOSPITAL PLAN CORPORATION OR
    23  PROFESSIONAL HEALTH SERVICE PLAN CORPORATION, THE ORDER AND
    24  DETERMINATION OF THE DEPARTMENT MUST FIND THAT POLICYHOLDERS AND
    25  CERTIFICATE HOLDERS AND SUBSCRIBERS SHALL RECEIVE A SUSTAINED
    26  BENEFIT FROM THE MERGER, CONSOLIDATION OR OTHER ACQUISITION OF
    27  CONTROL. IF NO COMMENTS AND RECOMMENDATIONS ARE RECEIVED UNDER
    28  SUBSECTION (B)(4), THE DEPARTMENT MAY ISSUE A FINAL ORDER AND
    29  DETERMINATION ON OR AFTER ONE HUNDRED FIVE (105) DAYS FOLLOWING
    30  THE CLOSE OF THE PUBLIC COMMENT PERIOD.
    20070H1150B4085                 - 42 -     

     1     SECTION 1403.2.  INSURANCE RESTRUCTURING RESTRICTED RECEIPT
     2  ACCOUNT.--(A)  THERE IS ESTABLISHED IN THE STATE TREASURY A
     3  RESTRICTED RECEIPT ACCOUNT TO BE KNOWN AS THE INSURANCE
     4  RESTRUCTURING RESTRICTED RECEIPT ACCOUNT. INTEREST EARNED ON
     5  MONEY IN THE ACCOUNT SHALL BE DEPOSITED INTO THE ACCOUNT.
     6     (B)  ALL NET ECONOMIC BENEFITS, INCLUDING PROCEEDS, SAVINGS,
     7  FUNDS OR MONEYS DIRECTLY DERIVED FROM AND PAID TO THE
     8  COMMONWEALTH OR A COMMONWEALTH PROGRAM FROM THE MERGER,
     9  CONSOLIDATION OR OTHER ACQUISITION OF CONTROL OF A HOSPITAL PLAN
    10  CORPORATION OR PROFESSIONAL HEALTH SERVICES PLAN CORPORATION
    11  SHALL BE DEPOSITED INTO THE ACCOUNT FOR PURPOSES AS DETERMINED
    12  BY THE GENERAL ASSEMBLY.
    13     (C)  NO CONTRACT OR WRITTEN AGREEMENT BETWEEN A HOSPITAL PLAN
    14  CORPORATION OR PROFESSIONAL HEALTH SERVICES PLAN CORPORATION AND
    15  THE COMMONWEALTH OR ANY OTHER ENTITY RELATING TO THE
    16  DISBURSEMENT OR SPENDING OF MONEY IN THE ACCOUNT MAY BE ENTERED
    17  INTO UNTIL MONEYS IN THE ACCOUNT ARE APPROPRIATED BY THE GENERAL
    18  ASSEMBLY.
    19     (D)  NO MONEYS OR FUNDS MAY BE TRANSFERRED OR PAID FROM THE
    20  ACCOUNT UNLESS APPROPRIATED BY THE GENERAL ASSEMBLY.
    21     SECTION 8.  SECTION 1405(C) OF THE ACT, AMENDED FEBRUARY 17,
    22  1994 (P.L.92, NO.9), IS AMENDED TO READ:
    23     SECTION 1405.  STANDARDS AND MANAGEMENT OF AN INSURER WITHIN
    24  A HOLDING COMPANY SYSTEM.--* * *
    25     (C)  (1)  NOTWITHSTANDING THE CONTROL OF A DOMESTIC INSURER
    26  BY ANY PERSON, THE OFFICERS AND DIRECTORS OF THE INSURER SHALL
    27  NOT THEREBY BE RELIEVED OF ANY OBLIGATION OR LIABILITY TO WHICH
    28  THEY WOULD OTHERWISE BE SUBJECT BY LAW, AND THE INSURER SHALL BE
    29  MANAGED SO AS TO ASSURE ITS SEPARATE OPERATING IDENTITY
    30  CONSISTENT WITH THIS ARTICLE.
    20070H1150B4085                 - 43 -     

     1     (2)  NOTHING HEREIN SHALL PRECLUDE A DOMESTIC INSURER FROM
     2  HAVING OR SHARING A COMMON MANAGEMENT OR COOPERATIVE OR JOINT
     3  USE OF PERSONNEL, PROPERTY OR SERVICES WITH ONE OR MORE OTHER
     4  PERSONS UNDER ARRANGEMENTS MEETING THE STANDARDS OF SUBSECTION
     5  (A)(1).
     6     (3)  (I)  NOT LESS THAN ONE-THIRD OF THE DIRECTORS OF A
     7  DOMESTIC INSURER [AND NOT LESS THAN ONE-THIRD OF THE MEMBERS OF
     8  EACH COMMITTEE OF THE BOARD OF DIRECTORS OF ANY DOMESTIC
     9  INSURER] SHALL BE PERSONS WHO ARE NOT OFFICERS OR EMPLOYES OF
    10  SUCH INSURER OR OF ANY ENTITY CONTROLLING, CONTROLLED BY OR
    11  UNDER COMMON CONTROL WITH SUCH INSURER AND WHO ARE NOT
    12  BENEFICIAL OWNERS OF A CONTROLLING INTEREST IN THE VOTING STOCK
    13  OF SUCH INSURER OR ANY SUCH ENTITY. AT LEAST ONE SUCH PERSON
    14  MUST BE INCLUDED IN ANY QUORUM FOR THE TRANSACTION OF BUSINESS
    15  AT ANY MEETING OF THE BOARD OF DIRECTORS [OR ANY COMMITTEE
    16  THEREOF].
    17     (II)  NOT LESS THAN ONE-THIRD OF THE MEMBERS OF EACH
    18  COMMITTEE OF THE BOARD OF DIRECTORS OF ANY DOMESTIC INSURER
    19  SHALL BE PERSONS WHO ARE NOT OFFICERS OR EMPLOYES OF SUCH
    20  INSURER OR OF ANY ENTITY CONTROLLING, CONTROLLED BY OR UNDER
    21  COMMON CONTROL WITH SUCH INSURER. AT LEAST ONE SUCH PERSON MUST
    22  BE INCLUDED IN ANY QUORUM FOR THE TRANSACTION OF BUSINESS AT ANY
    23  MEETING OF EACH COMMITTEE.
    24     (4)  THE BOARD OF DIRECTORS OF A DOMESTIC INSURER SHALL
    25  ESTABLISH [ONE OR MORE COMMITTEES] A COMMITTEE COMPRISED SOLELY
    26  OF DIRECTORS WHO ARE NOT OFFICERS OR EMPLOYES OF THE INSURER OR
    27  OF ANY ENTITY CONTROLLING, CONTROLLED BY OR UNDER COMMON CONTROL
    28  WITH THE INSURER AND WHO ARE NOT BENEFICIAL OWNERS OF A
    29  CONTROLLING INTEREST IN THE VOTING STOCK OF THE INSURER OR ANY
    30  SUCH ENTITY. THE COMMITTEE [OR COMMITTEES] SHALL HAVE
    20070H1150B4085                 - 44 -     

     1  RESPONSIBILITY FOR RECOMMENDING THE SELECTION OF INDEPENDENT
     2  CERTIFIED PUBLIC ACCOUNTANTS[,] AND REVIEWING THE INSURER'S
     3  FINANCIAL CONDITION, THE SCOPE AND RESULTS OF THE INDEPENDENT
     4  AUDIT AND ANY INTERNAL AUDIT[, NOMINATING CANDIDATES FOR
     5  DIRECTOR FOR ELECTION BY SHAREHOLDERS OR POLICYHOLDERS,
     6  EVALUATING THE PERFORMANCE OF OFFICERS DEEMED TO BE PRINCIPAL
     7  OFFICERS OF THE INSURER AND RECOMMENDING TO THE BOARD OF
     8  DIRECTORS THE SELECTION AND COMPENSATION OF THE PRINCIPAL
     9  OFFICERS]. THE COMMITTEE MAY ALSO HAVE THE RESPONSIBILITIES
    10  DESCRIBED IN PARAGRAPH (4.1) IF ONE OR MORE COMMITTEES DESCRIBED
    11  IN PARAGRAPH (4.1) ARE NOT SEPARATELY ESTABLISHED.
    12     (4.1)  THE BOARD OF DIRECTORS OF A DOMESTIC INSURER SHALL
    13  ESTABLISH ONE OR MORE COMMITTEES COMPRISED SOLELY OF DIRECTORS
    14  WHO ARE NOT OFFICERS OR EMPLOYES OF THE INSURER OR OF ANY ENTITY
    15  CONTROLLING, CONTROLLED BY OR UNDER COMMON CONTROL WITH THE
    16  INSURER. THE COMMITTEE OR COMMITTEES SHALL HAVE RESPONSIBILITY
    17  FOR RECOMMENDING CANDIDATES TO BE NOMINATED BY THE BOARD OF
    18  DIRECTORS, IN ADDITION TO ANY OTHER NOMINATIONS BY VOTING
    19  SHAREHOLDERS OR POLICYHOLDERS, FOR ELECTION AS DIRECTORS BY
    20  VOTING SHAREHOLDERS OR POLICYHOLDERS, EVALUATING THE PERFORMANCE
    21  OF OFFICERS DEEMED TO BE PRINCIPAL OFFICERS OF THE INSURER AND
    22  RECOMMENDING TO THE BOARD OF DIRECTORS THE SELECTION AND
    23  COMPENSATION OF THE PRINCIPAL OFFICERS.
    24     (5)  THE PROVISIONS OF PARAGRAPHS (3) [AND], (4) AND (4.1)
    25  SHALL NOT APPLY TO A DOMESTIC INSURER IF THE PERSON CONTROLLING
    26  SUCH INSURER IS AN INSURER OR [A PUBLICLY HELD CORPORATION]
    27  ANOTHER BUSINESS ENTITY HAVING A BOARD OF DIRECTORS AND
    28  COMMITTEES THEREOF WHICH ALREADY MEET THE REQUIREMENTS OF
    29  PARAGRAPHS (3) [AND (4)], (4) AND (4.1).
    30     * * *
    20070H1150B4085                 - 45 -     

     1     SECTION 9.  THE ACT IS AMENDED BY ADDING AN ARTICLE TO READ:
     2                            ARTICLE XXV
     3                   COMMUNITY HEALTH REINVESTMENT
     4  SECTION 2501.  DEFINITIONS.
     5     THE FOLLOWING WORDS AND PHRASES WHEN USED IN THIS ARTICLE
     6  SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION UNLESS THE
     7  CONTEXT CLEARLY INDICATES OTHERWISE:
     8     "COMMUNITY HEALTH REINVESTMENT ACTIVITY."  COMMUNITY HEALTH
     9  SERVICES AND PROJECTS THAT IMPROVE HEALTH CARE OR MAKE HEALTH
    10  CARE MORE ACCESSIBLE. THE TERM INCLUDES FUNDING, SUBSIDIZATION
    11  OR PROVISION OF THE FOLLOWING:
    12         (1)  HEALTH CARE COVERAGE FOR PERSONS WHO ARE DETERMINED
    13     BY RECOGNIZED STANDARDS AS DETERMINED BY THE INSURANCE
    14     DEPARTMENT TO BE UNABLE TO PAY FOR COVERAGE.
    15         (2)  HEALTH CARE SERVICES FOR PERSONS WHO ARE DETERMINED
    16     BY RECOGNIZED STANDARDS TO BE UNINSURED AND UNABLE TO PAY FOR
    17     SERVICES.
    18         (3)  PROGRAMS FOR THE PREVENTION AND TREATMENT OF DISEASE
    19     OR INJURY, INCLUDING MENTAL RETARDATION, MENTAL DISORDERS,
    20     MENTAL HEALTH COUNSELING OR THE PROMOTION OF HEALTH OR
    21     WELLNESS.
    22  THE TERM SHALL NOT INCLUDE EXPENDITURES FOR ADVERTISING, PUBLIC
    23  RELATIONS, SPONSORSHIPS, BAD DEBT, THE COST OF ADMINISTERING
    24  STATE HEALTH CARE PROGRAMS, PROGRAMS PROVIDED AS AN EMPLOYEE
    25  BENEFIT, USE OF FACILITIES FOR MEETINGS HELD BY COMMUNITY GROUPS
    26  OR EXPENSES FOR IN-SERVICE TRAINING, CONTINUING EDUCATION,
    27  ORIENTATION OR MENTORING OF EMPLOYEES.
    28     "DEPARTMENT."  THE INSURANCE DEPARTMENT OF THE COMMONWEALTH.
    29     "PLAN."  A HOSPITAL PLAN CORPORATION AS DEFINED IN 40 PA.C.S.
    30  CH. 61 (RELATING TO HOSPITAL PLAN CORPORATIONS) OR PROFESSIONAL
    20070H1150B4085                 - 46 -     

     1  HEALTH SERVICES PLAN CORPORATION AS DEFINED IN 40 PA.C.S. CH. 63
     2  (RELATING TO PROFESSIONAL HEALTH SERVICES PLAN CORPORATIONS).
     3  SECTION 2502.  DUTIES OF PLAN AND DEPARTMENT.
     4     (A)  PLAN DUTIES.--A PLAN SHALL HAVE THE FOLLOWING DUTIES:
     5         (1)  TO SUBMIT A PROPOSAL TO THE DEPARTMENT ON OR BEFORE
     6     MARCH 30 OF EACH YEAR SETTING FORTH THE MANNER IN WHICH THE
     7     PLAN WILL PROVIDE PROPOSED COMMUNITY HEALTH REINVESTMENT
     8     ACTIVITIES CONDUCTED OR PROVIDED BY THE PLAN DURING THE NEXT
     9     FISCAL YEAR.
    10         (2)  TO ANNUALLY PROVIDE TO THE DEPARTMENT, THE BANKING
    11     AND INSURANCE COMMITTEE OF THE SENATE AND THE INSURANCE
    12     COMMITTEE OF THE HOUSE OF REPRESENTATIVES THE NAME AND
    13     ADDRESS OF EACH OFFICER, DIRECTOR OR EMPLOYEE WHO SERVES ON
    14     THE BOARD OF DIRECTORS OF A HOSPITAL OR OTHER HEALTH CARE
    15     FACILITY AS DEFINED IN SECTION 802.1 OF THE ACT OF JULY 19,
    16     1979 (P.L.130, NO.48), KNOWN AS THE HEALTH CARE FACILITIES
    17     ACT, OR ON THE BOARD OF AN ENTITY THAT OWNS, OPERATES OR
    18     MANAGES A HOSPITAL OR OTHER HEALTH CARE FACILITY. THIS
    19     PARAGRAPH SHALL APPLY TO A NONPROFIT OR FOR-PROFIT SUBSIDIARY
    20     OR AFFILIATE OF A HOSPITAL PLAN CORPORATION OR PROFESSIONAL
    21     HEALTH SERVICES PLAN CORPORATION. THE INFORMATION SHALL BE
    22     SUBMITTED BY JANUARY 31 FOR THE IMMEDIATELY PRECEDING YEAR.
    23     (B)  DEPARTMENT DUTIES.--THE DEPARTMENT SHALL HAVE THE
    24  FOLLOWING DUTIES:
    25         (1)  TO DEVELOP A FORM WHICH SHALL BE USED BY EACH PLAN
    26     FOR THE SUBMISSION OF THE PROPOSAL UNDER SUBSECTION (A)(1).
    27     THE FORM SHALL REQUIRE THE ITEMIZATION OF INDIVIDUAL
    28     COMMUNITY HEALTH REINVESTMENT ACTIVITIES AND THE COST OF EACH
    29     ACTIVITY. THE PROPOSAL SHALL BE ON A FORM PUBLISHED BY THE
    30     DEPARTMENT IN THE PENNSYLVANIA BULLETIN.
    20070H1150B4085                 - 47 -     

     1         (2)  TO APPROVE OR DISAPPROVE THE EXPENDITURES IN THE
     2     PROPOSAL SUBMITTED UNDER SUBSECTION (A)(1).
     3  SECTION 2503.  PUBLIC RECORD.
     4     ALL PROPOSALS SUBMITTED UNDER SECTION 2502 SHALL BE PUBLIC
     5  RECORDS.
     6  SECTION 2504.  REGULATIONS.
     7     THE DEPARTMENT MAY PROMULGATE REGULATIONS AS NECESSARY FOR
     8  THE ADMINISTRATION OF THIS ARTICLE.
     9     SECTION 10.  REPEALS ARE AS FOLLOWS:
    10         (1)  THE GENERAL ASSEMBLY DECLARES THE REPEAL UNDER
    11     PARAGRAPH (2) IS NECESSARY TO EFFECTUATE THE ADDITION OF
    12     SECTION 1403.2 OF THE ACT.
    13         (2)  SECTION 1716.1-E OF THE ACT OF APRIL 9, 1929
    14     (P.L.343, NO.176), KNOWN AS THE FISCAL CODE, IS REPEALED.
    15         (3)  THE ACT OF DECEMBER 19, 1990 (P.L.834, NO.198),
    16     KNOWN AS THE GAA AMENDMENTS ACT OF 1990, IS REPEALED INSOFAR
    17     AS IT IS INCONSISTENT WITH THIS ACT.
    18     SECTION 11.  THIS ACT SHALL NOT APPLY TO ANY MERGER,
    19  CONSOLIDATION OR OTHER ACQUISITION OF CONTROL COMPLETED OR
    20  CONSUMMATED PRIOR TO THE EFFECTIVE DATE OF THIS SECTION AND, IF
    21  REQUIRED, FOLLOWING THE ISSUANCE OF AN APPROVING DETERMINATION.
    22     SECTION 12.  THIS ACT SHALL APPLY TO ANY APPLICATION,
    23  STATEMENT OR OTHER PLAN OR PROPOSAL RELATING TO A MERGER,
    24  CONSOLIDATION OR OTHER ACQUISITION OF CONTROL FILED WITH THE
    25  INSURANCE DEPARTMENT ON OR AFTER JANUARY 1, 2007.
    26     SECTION 13.  THIS ACT SHALL TAKE EFFECT AS FOLLOWS:
    27         (1)  THE AMENDMENT OR ADDITION OF SECTION 405.2(C), 635.3
    28     AND 1405(C) OF THE ACT SHALL TAKE EFFECT IN 60 DAYS.
    29         (2)  THE REMAINDER OF THIS ACT SHALL TAKE EFFECT
    30     IMMEDIATELY.
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