SENATE AMENDED

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY DeLUCA, BELFANTI, BRENNAN, COHEN, DALEY, DONATUCCI, FAIRCHILD, GOODMAN, W. KELLER, KORTZ, KOTIK, MANDERINO, MANN, MELIO, MILLARD, MILLER, MOUL, READSHAW, SIPTROTH, THOMAS, VULAKOVICH, WALKO, YOUNGBLOOD, CALTAGIRONE, MATZIE AND MURT, FEBRUARY 19, 2009

SENATOR D. WHITE, BANKING AND INSURANCE, IN SENATE, AS AMENDED, FEBRUARY 2, 2010   

AN ACT

Amending the act of September 2, 1961 (P.L.1232, No.540),

entitled "An act providing for the regulation of credit life

insurance and credit accident and health insurance;

conferring powers and imposing duties on the Insurance

Commissioner and prescribing penalties," further providing

for premiums and refunds.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 8(b) of the act of September 2, 1961

(P.L.1232, No.540), known as the Model Act for the Regulation of

Credit Life Insurance and Credit Accident and Health Insurance,

is amended to read:

Section 8.  Premiums and Refunds.--* * *

(b)  The following shall apply:

(1)  Each individual policy or group certificate shall

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provide a notice that in the event of termination of the

insurance, including by renewing or refinancing the covered

indebtedness, prior to the [scheduled maturity date of the

indebtedness any refund of an amount paid by the debtor for

insurance] original expiration date of that insurance coverage:

(i)  that the debtor may be entitled to a refund of unearned

premium;

(ii)  that the person who is the holder of the underlying

debt instrument on the date the debt terminates shall provide

notice to the insurer of the termination of the debt no later

than sixty days after the termination, which notice shall

include the name of the debtor and the payoff date of the

underlying debt and any relevant contact information for the

debtor known to the holder; and

(iii)  that any refund of an amount paid by the debtor for

insurance shall be paid or credited promptly to the person

entitled thereto after receipt of the notice required under

paragraph (1)(ii): Provided, however, That [the commissioner

shall prescribe a minimum refund and] no refund [which would be]

less than [such minimum] five dollars ($5) need be made. The

formula to be used in computing such refund shall be filed with

and approved by the commissioner.

(2)  In any claim or action asserted by an insured against an

insurer for failure to refund any unearned premium in accordance

with this section, the insurer shall be entitled to indemnity

from a holder of a debt instrument who failed to provide the

notice required under paragraph (1)(ii).

* * *

Section 2.  The amendment of section 8(b) of the act shall

apply to individual policies or group certificates of credit

insurance delivered, issued for delivery or renewed no more than

120 days after the effective date of this act.

Section 3.  This act shall take effect January 1, 2010.

(1)  Each individual policy or group certificate paid by

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single premium shall provide a notice that in the event of

termination of the insurance, including by renewing or

refinancing the covered indebtedness, prior to the scheduled

maturity date of the indebtedness [any refund of an amount paid

by the debtor for insurance] that:

(i)  the debtor may be entitled to a refund of unearned

premium;

(ii)  the person who is the holder of the underlying debt

instrument on the date the debt terminates shall provide notice

to the insurer of the termination of the debt no later than

sixty days after the termination, which notice shall include the

name of the debtor and the payoff date of the underlying debt

and any relevant contact information for the debtor known to the

holder, or may alternatively provide notice directly to the

debtor with instructions on how to obtain a refund from the

insurer; and

(iii)  any refund of an amount paid by the debtor for

insurance shall be paid or credited promptly to the person

entitled thereto[: Provided, however, That the commissioner

shall prescribe a minimum refund and no] after receipt of notice

by the insurer.

(2)  No refund [which would be less than such minimum] for

any amount less than five dollars ($5) need be made. The formula

to be used in computing such refund shall be filed with and

approved by the commissioner.

* * *

Section 2.  The amendment of section 8(b) of the act shall

apply to individual policies or group certificates of credit

insurance delivered, issued for delivery or renewed on and after

the effective date of this section.

Section 3.  This act shall take effect in 120 days.