HOUSE AMENDED
PRIOR PRINTER'S NO. 1135
PRINTER'S NO. 1458
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
877
Session of
2017
INTRODUCED BY WHITE AND WARD, SEPTEMBER 6, 2017
AS REPORTED FROM COMMITTEE ON INSURANCE, HOUSE OF
REPRESENTATIVES, AS AMENDED, FEBRUARY 5, 2018
AN ACT
Amending the act of May 17, 1921 (P.L.789, No.285), entitled "An
act relating to insurance; establishing an insurance
department; and amending, revising, and consolidating the law
relating to the licensing, qualification, regulation,
examination, suspension, and dissolution of insurance
companies, Lloyds associations, reciprocal and inter-
insurance exchanges, and certain societies and orders, the
examination and regulation of fire insurance rating bureaus,
and the licensing and regulation of insurance agents and
brokers; the service of legal process upon foreign insurance
companies, associations or exchanges; providing penalties,
and repealing existing laws," in insurance producers, further
providing for rebates prohibited and for inducements
prohibited.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Sections 645-A and 646-A of the act of May 17,
1921 (P.L.789, No.285), known as The Insurance Department Act of
1921, are amended to read:
Section 645-A. Rebates prohibited.
(a) Prohibition.--[No] EXCEPT AS OTHERWISE PROVIDED IN THIS
SECTION, NO insurance producer shall, directly or indirectly,
offer, promise, allow, give, set off or pay a rebate of, or part
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of, a premium payable on the contract of insurance or on the
insurance producer's commission, earnings, profits, dividends or
other benefit founded, arising, accruing or to accrue thereon,
or any special advantage in date of policy or age of issue, or
any paid employment or contract for services of any kind, or any
other valuable consideration or inducement, to or for insurance
on a risk in this Commonwealth which is not specified in the
contract of insurance.
(a.1) Construction.--Nothing in this section shall be
construed as prohibiting an insurance producer from offering or
giving to an insured or prospective insured money or any favor,
advantage, object, valuable consideration or anything other than
money which has a cost of or a redeemable value less than or
equal to $100 which is not specified in the contract of
insurance. The commissioner may increase this amount upon
publication of notice in the Pennsylvania Bulletin.
(A.1) EXCEPTION.--AN INSURANCE PRODUCER MAY OFFER OR GIVE TO
AN INSURED OR A PROSPECTIVE INSURED, ON AN ANNUAL AGGREGATE
BASIS, ANY FAVOR, ADVANTAGE, OBJECT, VALUABLE CONSIDERATION OR
ANYTHING OTHER THAN MONEY THAT HAS A COST OF OR A REDEEMABLE
VALUE OF LESS THAN OR EQUAL TO $100, WHICH IS NOT SPECIFIED IN
THE CONTRACT OF INSURANCE. THE COMMISSIONER MAY INCREASE THIS
AMOUNT UPON PUBLICATION OF NOTICE IN THE PENNSYLVANIA BULLETIN.
(A.2) RECEIPT CONTINGENT ON PURCHASE.--NOTWITHSTANDING ANY
OTHER PROVISION OF THIS SECTION TO THE CONTRARY, AN INSURANCE
PRODUCER MAY NOT MAKE RECEIPT OF ANYTHING OF VALUE CONTINGENT ON
THE PURCHASE OF INSURANCE.
(b) Penalty.--A person that violates subsection (a) commits
a misdemeanor of the third degree.
(C) CONSTRUCTION.--NOTHING IN THIS SECTION SHALL BE
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CONSTRUED AS:
(1) PERMITTING ANY UNFAIR METHOD OF COMPETITION OR AN
UNFAIR OR DECEPTIVE ACT OR PRACTICE UNDER THE ACT OF JULY 22,
1974 (P.L.589, NO.205), KNOWN AS THE UNFAIR INSURANCE
PRACTICES ACT; OR
(2) PROHIBITING AN INSURANCE PRODUCER FROM OFFERING OR
GIVING TO AN INSURED, FOR FREE OR AT A DISCOUNTED PRICE,
SERVICES OR OTHER OFFERINGS THAT RELATE TO LOSS CONTROL OF
THE RISKS COVERED UNDER THE POLICY.
Section 646-A. Inducements prohibited.
(a) Prohibition.--[No] EXCEPT AS OTHERWISE PROVIDED IN THIS
SECTION, NO insurance producer shall, directly or indirectly,
offer, promise, give, option, sell or purchase any stocks,
bonds, securities or property, or any dividends or profits
accruing or to accrue thereon, or other thing of value
whatsoever, as an inducement to purchase a contract of
insurance. Nothing in this section shall be construed to prevent
the taking of a bona fide obligation, with legal interest, in
payment of any premium. This section shall not prohibit payment
or receipt of referral fees in accordance with this act.
(a.1) Construction.--Nothing in this section shall be
construed as prohibiting an insurance producer from offering or
giving to an insured or prospective insured money or any favor,
advantage, object, valuable consideration or anything other than
money which has a cost of or a redeemable value less than or
equal to $100. The commissioner may increase this amount upon
publication of notice in the Pennsylvania Bulletin.
(A.1) EXCEPTION.--AN INSURANCE PRODUCER MAY OFFER OR GIVE TO
AN INSURED OR A PROSPECTIVE INSURED, ON AN ANNUAL AGGREGATE
BASIS, ANY FAVOR, ADVANTAGE, OBJECT, VALUABLE CONSIDERATION OR
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ANYTHING OTHER THAN MONEY THAT HAS A COST OF OR A REDEEMABLE
VALUE OF LESS THAN OR EQUAL TO $100. THE COMMISSIONER MAY
INCREASE THIS AMOUNT UPON PUBLICATION OF NOTICE IN THE
PENNSYLVANIA BULLETIN.
(A.2) RECEIPT CONTINGENT ON PURCHASE.--NOTWITHSTANDING ANY
OTHER PROVISION OF THIS SECTION TO THE CONTRARY, AN INSURANCE
PRODUCER MAY NOT MAKE RECEIPT OF ANYTHING OF VALUE CONTINGENT ON
THE PURCHASE OF INSURANCE.
(b) Penalty.--A person that violates subsection (a) commits
a misdemeanor of the third degree.
(C) CONSTRUCTION.--NOTHING IN THIS SECTION SHALL BE
CONSTRUED AS:
(1) PERMITTING ANY UNFAIR METHOD OF COMPETITION OR AN
UNFAIR OR DECEPTIVE ACT OR PRACTICE UNDER THE ACT OF JULY 22,
1974 (P.L.589, NO.205), KNOWN AS THE UNFAIR INSURANCE
PRACTICES ACT; OR
(2) PROHIBITING AN INSURANCE PRODUCER FROM OFFERING OR
GIVING TO AN INSURED, FOR FREE OR AT A DISCOUNTED PRICE,
SERVICES OR OTHER OFFERINGS THAT RELATE TO LOSS CONTROL OF
THE RISKS COVERED UNDER THE POLICY.
Section 2. This act shall take effect in 60 days.
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