Title 31--INSURANCE INSURANCE DEPARTMENT [31 PA. CODE CH. 67] Catastrophic Loss Benefits Continuation Fund [28 Pa.B. 5482] The Insurance Department (Department), by this order, adopts amendments to Chapter 67, Subchapter A (relating to Catastrophic Loss Trust Fund) to read as set forth in Annex A. This rulemaking is necessary due to the repeal of the Catastrophic Loss Trust Fund and the subsequent implementation of the Catastrophic Loss Benefits Continuation Fund.
Purpose
Sections 67.1--67.15 were originally promulgated to provide guidance for the handling of claims under the Catastrophic Loss Trust (CAT) Fund created in 1984 under 75 Pa.C.S. §§ 1761--1769, which was repealed effective December 12, 1988, by the act of December 12, 1988 (P. L. 1120, No. 144) (Act 144). Subsequently, the act of April 26, 1989 (P. L. 13, No. 4) (Act 4) added 75 Pa.C.S. Chapter 17, Subchapter I (relating to miscellaneous provisions). Section 1798.4 of Act 4 established the Catastrophic Loss Benefits Continuation Fund (Fund) to provide funds necessary to pay catastrophic loss benefits to individuals who suffered a catastrophic loss after October 1, 1984, and prior to June 1, 1989, or during the December 1988-89 registration year for which payment for CAT Fund coverage was made in accordance with former 75 Pa.C.S. § 1762.
Section 1798.2 of Subchapter I contains a ''savings provision'' providing that despite the repeal of Subchapter F by Act 144, persons experiencing catastrophic losses during the time the CAT Fund was in effect (October 1, 1984, through June 1, 1989) or during the December 1988-89 vehicle registration year for which a fee was paid, shall continue to receive, or will be eligible to receive, catastrophic loss benefits as if Subchapter F had not been repealed. Because of the repeal of Subchapter F and the addition of Subchapter I allowing claimants to continue to receive Fund benefits, it is necessary to modify various sections of Chapter 67 as well as add a new section to reflect these statutory changes and provide a more accurate reflection of current Fund needs.
Statutory Authority
These amendments are published under the authority of sections 506 and 1502 of The Administrative Code of 1929 (71 P. S. §§ 186 and 412).
Comments
Notice of the proposed rulemaking was published at 27 Pa.B. 6229 (November 29, 1997) as a proposed rulemaking with a 30-day public comment period.
No comments were received from the Standing Committees or the public. On January 30, 1998, the Independent Regulatory Review Commission (IRRC) submitted its comments and recommendations to the Department. The following is a summary of the comments and the Department's response in its final rulemaking.
Section 67.18 (relating to coordination of benefits), provided that an eligible CAT Fund claimant shall cooperate in providing coordination of benefit information to the Fund and the Fund's administrator. The section as proposed further provided that a claimant's failure to cooperate in providing this information will result in a claimant's suspension of benefits.
IRRC questioned the Department's statutory authority to suspend claimant benefits under this section and recommended that if this section remains, the Department clarify what would be considered a ''failure to cooperate.'' In accord with IRRC's concerns, the Department has deleted the suspension of benefits language from the regulations. Section 67.18 now reads ''an eligible claimant shall cooperate in providing coordination of benefit information to the Administrator and the Fund.'' Because the Department deleted the suspension of claimant benefits language from the regulations, it is unnecessary to clarify ''failure to cooperate.''
In § 67.1 (relating to purpose), IRRC recommended that the Department add ''after October 1, 1984, but'' before ''prior to June 1, 1989'' in § 67.1 to clarify the inclusive dates during which claimants may have suffered catastrophic losses. The Department agrees and has revised § 67.1 to respond to IRRC's clarity concern.
In § 67.2 (relating to definitions), the Department agreed with IRRC's comments and has revised § 67.2 to incorporate ''limitations provided in the act'' into the regulations since the act has been repealed. The act's limitations on eligibility are contained in 75 Pa.C.S. §§ 1761 and 1766. Because of the repeal of the act, and the resultant difficulty for claimants to reference the act, 75 Pa.C.S. §§ 1761 and 1766 (now repealed) will be appended to the regulations as Appendix A. The definition of ''benefits'' in § 67.2 has been revised.
In § 67.6 (relating to appeals), IRRC questioned whether the date of the ''written determination'' is the same as the mailing date, and if not, recommended that the Department calculate the 30-day time period for appeal from the date of mailing.
The Department considered IRRC's recommendation but finds that use of the mailing date to calculate the 30-day time period will be administratively difficult. As an alternative, the Department suggests that the date of the written determination continue to be utilized to calculate the appeal period, but that the 30-day time period be increased to 33 days to allow time for claimants to receive the written determination through the mail. The additional 3 days will benefit claimants because it should afford the full 30-day time-frame during which to file an appeal, and the Department will know the specific date from which the 33-day appeal period will begin to run.
Fiscal Impact
State Government
These amendments will not have an impact on costs of the Fund or the Department.
General Public
These amendments are not expected to have a fiscal impact upon the general public.
Political Subdivisions
These amendments have no impact on costs to political subdivisions.
Private Sector
These amendments have no impact on costs to the private sector.
Paperwork
These amendments impose no additional paperwork requirements on the Department or the Fund.
Persons Regulated
These amendments apply to claimants who are currently receiving benefits from the Fund, catastrophically injured claimants who are not currently eligible to receive benefits from the Fund but who may be eligible in the future, the Administrator for the Fund and the Fund itself.
Contact Person
Questions or comments regarding the amendments may be addressed in writing to Peter J. Salvatore, Regulatory Coordinator, Office of Special Projects, 1326 Strawberry Square, Harrisburg, PA 17120, (717) 787-4429.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on November 29, 1997, the Department submitted a copy of these amendments to the Independent Regulatory Review Commission (IRRC) and to the Chairpersons of the House Insurance Committee and the Senate Banking and Insurance Committee. In addition to the submitted amendments, the Department has provided IRRC and the Committees with a copy of a detailed Regulatory Analysis Form prepared by the Department in compliance with Executive Order 1996-1, ''Regulatory Review and Promulgation.'' In compliance with section 5(c) of the Regulatory Review Act, the Department also provided IRRC and the Committees with copies of the comments received. A copy of that material is available to the public upon request.
Under section 5.1(d) of the Regulatory Review Act (71 P. S. § 745.5a(d)), these final-form regulations were deemed approved by the House and Senate Committees on September 15, 1998. Under section 5.1(e) of the Regulatory Review Act, IRRC met on September 24, 1998, and approved the final-form regulations.
Findings
The Insurance Commissioner finds that:
(1) Public notice of intention to adopt this rulemaking as amended by this order has been given under sections 201 and 202 of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. §§ 1201 and 1202), and the regulations thereunder, 1 Pa. Code §§ 7.1 and 7.2.
(2) The adoption of this rulemaking in the manner provided in this order is necessary and appropriate for the administration and enforcement of the authorizing statutes.
Order
The Insurance Commissioner, acting under the authorizing statutes, orders that:
(a) The regulations of the Department, 31 Pa. Code Chapter 67, are amended by amending §§ 67.3--67.5 and adding §§ 67.16 and 67.17 to read as set forth at 27 Pa.B. 6229 (November 29, 1997); and by amending §§ 67.1, 67.2, 67.6 and by adding § 67.18 and Appendix A to read as set forth in Annex A.
(b) The Commissioner shall submit this order, 27 Pa.B. 6229 and Annex A to the Office of General Counsel and Office of Attorney General for approval as to form and legality as required by law.
(c) The Commissioner shall certify this order and Annex A and deposit them with the Legislative Reference Bureau as required by law.
(d) This order shall take effect upon publication in the Pennsylvania Bulletin.
M. DIANE KOKEN,
Insurance Commissioner(Editor's Note: For the text of the order of the Independent Regulatory Review Commission relating to this document, see 28 Pa.B. 5189 (October 10, 1998).)
Fiscal Note: Fiscal Note 11-160 remains valid for the final adoption of the subject regulations.
Annex A TITLE 31. INSURANCE PART II. AUTOMOBILE INSURANCE CHAPTER 67. CATASTROPHIC LOSS
BENEFITS CONTINUATION FUND§ 67.1.
Purpose. The purpose of this subchapter is to provide procedures for the establishment and administration of the Fund, which continues the Catastrophic Loss Trust Fund eligibility determinations for certain individuals suffering catastrophic losses on or after October 1, 1984, but prior to June 1, 1989, or who may have suffered a catastrophic loss during the December 1988 to December 1989 vehicle registration year for which payment for Catastrophic Loss Trust Fund coverage was made in accordance with former section 1762 of the act (repealed).
§ 67.2.
Definitions. The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise:
Act--75 Pa.C.S. §§ 1701--1798 (relating to the Motor Vehicle Financial Responsibility Law).
Administrator--The person or entity designated by the Fund to review claims for catastrophic loss benefits, determine the eligibility of the claimant and make payment where appropriate.
Benefits--Payments by the Fund for reasonable, necessary and accident-related expenses for medical treatment and rehabilitative services which exceed $100,000, subject to limitations provided in sections 1761 and 1766 of the act (now repealed). Reference may be made to sections 1761, 1762 and 1766, in Appendix A.
Claims manager--The Department employe designated by the Commissioner to manage the daily activities of the Fund.
Department--The Insurance Department of the Commonwealth.
Eligible claimant--An individual who meets the requirements of § 67.16 (relating to eligible claimant for fund benefits).
Fund--The Catastrophic Loss Benefits Continuation Fund established to provide benefits required by the act.
Surcharge--The amount to be paid by drivers upon conviction of any traffic violation, exclusive of parking offenses, to fund the Fund.
§ 67.6.
Appeals. (a) A claimant who disputes a determination by the Administrator or Fund concerning eligibility for or allowance of benefits, may file a written complaint with the claims manager. The written determination by the Fund or Administrator shall advise the claimant how to file a complaint with the claims manager. A complaint is timely filed by the claimant if received by the claims manager no later than 33 days after the date of the written determination from the Administrator or the Fund denying eligibility for or allowance of benefits.
(b) The claims manager will issue a written determination notifying the claimant of the results of the claims manager's review. If the claimant is not satisfied with the results of the claims manager's review, the claimant may request in writing a formal administrative hearing before the Commissioner. The written determination by the claims manager will advise the claimant how to request a hearing. A request for hearing is timely if received by the Department no later than 33 days after the date of the written determination from the claims manager.
(c) Appeals are conducted in accordance with 1 Pa. Code Part II (relating to the General Rules of Administrative Practice and Procedure) as applicable to the Department and in accordance with Chapter 56 (relating to special rules of administrative practice and procedure).
§ 67.18.
Coordination of benefits. An eligible claimant shall cooperate in providing coordination of benefit information to the Administrator and the Fund.
APPENDIX A Section
1761.
Definitions (Repealed). 1762. Funding (Repealed). 1766. Benefits (Repealed). § 1761. Definitions (Repealed).
The following words and phrases when used in this subchapter shall have the meanings given to them in this section unless the context clearly indicates otherwise:
''Administrator.'' The administrator designated by the Catastrophic Loss Trust Fund Board.
''Board.'' The Catastrophic Loss Trust Fund Board.
''Catastrophic loss.'' An injury, arising out of the maintenance or use of a motor vehicle, for which the reasonable and necessary expenses for medical treatment and rehabilitative services, as described in section 1712(1) (relating to availability of benefits), exceed $100,000.
''Catastrophic loss benefit.'' Payments by the Catastrophic Loss Trust Fund for those reasonable and necessary expenses only for medical treatment and rehabilitative services which, as described in section 1712(1), exceed $100,000, subject to the limitations provided in section 1766 (relating to benefits). Catastrophic loss benefits shall not duplicate any other payments for medical treatment and rehabilitative services.
''Eligible claimant.'' Except as provided in the definition of ineligible claimant, eligible claimant includes a resident of this Commonwealth who suffers injury on or after the effective date of this subchapter arising out of the maintenance or use of a motor vehicle in the United States, its territories or possessions and Canada. The estate of an eligible claimant shall be entitled to receive catastrophic loss benefits pursuant to section 1766 to the extent that financial obligations for reasonable and necessary medical treatment and rehabilitative services were incurred by the eligible claimant prior to the death of that person. Otherwise eligible claimants shall not be disqualified from participating in or receiving benefits from the Catastrophic Loss Trust Fund for injuries suffered after the effective date of this subchapter but prior to their first registration renewal after the effective date of this subchapter.
''Executive director.'' The executive director of the Catastrophic Loss Trust Fund Board.
''Fund.'' The Catastrophic Loss Trust Fund.
''Fund charge.'' The fund charge established under this subchapter.
''Ineligible claimant.'' Any of the following:
(1) A person who is the owner of a motor vehicle who has not complied with the registration requirements of Chapter 13 (relating to registration of vehicles).
(2) A person who is the driver or occupant of a recreational vehicle not intended for highway use, a motorcycle, a motorized pedalcycle, a motor-driven cycle or like type vehicle required to be registered under this title but not subject to the charge levied in section 1762 (relating to funding).
''Manager.'' The manager designated by the Catastrophic Loss Trust Fund Board.
§ 1762.
Funding (Repealed). The Catastrophic Loss Trust Fund shall be funded by levying an initial charge of $5 upon all motor vehicles required to be registered under Chapter 13 (relating to registration of vehicles) except trailers, recreational vehicles not intended for highway use, motorcycles, motor-driven cycles, motorized pedalcycles or like type vehicles. This charge shall be remitted to an insurance company or other party as may be designated by the Insurance Department. Upon receipt of the charge, the insurance company or other designated party shall remit it to the Insurance Department for deposit in the trust fund. The Catastrophic Loss Trust Fund Board shall by regulation determine by January 1 of each calendar year the amount of the fund charge for each registration year subsequent to the initial registration year and shall notify the Insurance Department which shall notify the insurance companies or other designated parties to collect the charge.
§ 1766.
Benefits (Repealed). (a) General rule.--Subject to the limitations set forth in subsection (b), the Catastrophic Loss Trust Fund shall provide catastrophic loss benefits to eligible claimants only for the payment of expenses for medical treatment and rehabilitative services in excess of $100,000. No payment shall be made by the fund for the first $100,000 of expense for medical treatment and rehabilitative services incurred by an eligible claimant.
(b) Maximum benefit.--The maximum catastrophic loss benefit which shall be paid by the fund on behalf of any one eligible claimant shall be $50,000 per year and $1,000,000 lifetime aggregate. During the first 18 months of eligibility, the administrator may approve payments on behalf of a claimant without regard to the $50,000 per year limit but subject to the $1,000,000 lifetime aggregate.
(c) Effect of other benefits.--Except for workers' compensation, catastrophic loss benefits paid or payable by the fund shall be primary to any other available source of accident or health benefits including any program, group contract or other private or public source of benefits unless the law authorizing or providing those benefits makes the benefits primary to the benefits provided under this subchapter.
(d) Structured settlements.--The administrator may enter into structured settlements to pay benefits under this subchapter. Where it appears the settlement will be both cost effective to the fund and in the best interest of the claimant, the restrictions in subsection (b) shall not apply to this subsection, but in no event shall the cost of the structured settlement exceed the present value of the future annual payments up to the maximum lifetime aggregate benefit remaining calculated at 6% simple interest.
(e) Preclusion of pleading, proving and recovering benefits.--In any action for damages against a tortfeasor arising out of the maintenance or use of a motor vehicle, a person who is eligible to receive catastrophic loss benefits shall be precluded from pleading, introducing into evidence or recovering the amount of medical and rehabilitative expenses for which catastrophic loss benefits were paid or are payable. This preclusion applies only to catastrophic loss benefits.
(f) Subrogation.--There shall be no subrogation or reimbursement from a claimant's tort recovery with respect to catastrophic loss benefits.
[Pa.B. Doc. No. 98-1788. Filed for public inspection October 30, 1998, 9:00 a.m.]
