INSURANCE DEPARTMENT [31 PA. CODE CH. 65] Charter Amendments; Financial Requirements [31 Pa.B. 5552] The Insurance Department (Department) proposes to delete Chapter 65, Subchapter C (relating to charter amendments; financial requirements) to read as set forth in Annex A. This rulemaking is proposed under the authority of sections 206, 506, 1501 and 1502 of The Administrative Code of 1929 (71 P. S. §§ 66, 186, 411 and 412); sections 202, 206 and 601 of The Insurance Company Law of 1921 (40 P. S. §§ 382, 386 and 721) (act); and 15 Pa.C.S. §§ 21201--21208 (relating to GAA Amendments Act of 1990). The chapter applies to property and casualty insurers authorized to write automobile insurance coverages under section 202(c)(11) of the act. The subchapter provided for the automatic amendment of existing charters and established minimum capital and surplus requirements for domestic insurers affected by the act of November 27, 1968 (P. L. 118, No. 349) (Act 349).
Purpose
The purpose of this rulemaking is to delete §§ 65.21--65.26 to eliminate obsolete, unnecessary regulations. Section 202 of the act delineates the underwriting authorities of various types of insurers. Act 349 consolidated the underwriting authority to write automobile bodily injury liability and automobile property damage liability insurance coverages. The regulations were adopted May 16, 1969, to implement the provisions of Act 349 with respect to insurers writing automobile insurance coverages in this Commonwealth.
Section 65.23 (relating to charters automatically amended) provides for the automatic amendment of the existing charters of insurers that were authorized to write both of the consolidated coverages and delineated the effect of Act 349 on the authority of insurers that had one of the two consolidated underwriting powers. The GAA Amendments Act of 1990 updated the Commonwealth's business corporation laws relating to insurance companies. The updates included the repeal of provisions in the act requiring the Department's approval of charters for the creation of insurers. As a result of these updates, insurer charters are no longer required to specify underwriting authority. Therefore, the provisions in §§ 65.21--65.23 (relating to definition of act; authority for writing certain policies; and charters automatically amended) are outdated and no longer needed.
Sections 65.24--65.26 (relating to minimum paid-up capital for stock insurers; minimum surplus for mutual insurers; and determining compliance) establish minimum capital and surplus requirements for mutual insurers with the authority to write automobile liability insurance. The current minimum capital and surplus requirements for these insurers are now found in sections 206 and 601 of the act. Therefore, §§ 65.24--65.26 also are outdated and no longer needed.
Affected Parties
The deletion of the subchapter affects property and casualty insurers authorized to write automobile insurance coverages in this Commonwealth.
Fiscal Impact
There is no fiscal impact as a result of the deletion of the subchapter.
Paperwork
The deletion of the subchapter would impose no additional paperwork requirements on the Department or insurers.
Effectiveness/Sunset Date
This proposed rulemaking will become effective upon final publication in the Pennsylvania Bulletin. Because the rulemaking proposes to delete the subchapter, no sunset date has been assigned.
Contact Person
Questions or comments regarding the proposed rulemaking may be addressed in writing to Peter J. Salvatore, Regulatory Coordinator, Office of Special Projects, 1326 Strawberry Square, Harrisburg, PA 17120, (717) 787-4429 within 30 days following the publication of this notice in the Pennsylvania Bulletin. Questions or comments also may be e-mailed to psalvatorestate.pa.us or faxed to (717) 772-1969.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on September 26, 2001, the Department submitted a copy of this proposed rulemaking to the Independent Regulatory Review Commission (IRRC) and to the Chairpersons of the Senate Banking and Insurance Committee and the House Committee on Insurance. In addition to submitting this proposed rulemaking, the Department has provided IRRC and the Committees with a copy of a detailed Regulatory Analysis Form prepared by the agency in compliance with Executive Order 1996-1, ''Regulatory Review and Promulgation.'' A copy of this material is available to the public upon request.
Under section 5(g) of the Regulatory Review Act, if IRRC has objections to any portion of the proposed rulemaking, it will notify the Department within 10 days of the close of the Committees' review period. The notification shall specify the regulatory review criteria that have not been met by that portion. The Regulatory Review Act specifies detailed procedures for review, prior to final publication of the regulations by the Department, the General Assembly and the Governor of objections raised.
M. DIANE KOKEN,
Insurance CommissionerFiscal Note: 11-211. No fiscal impact; (8) recommends adoption.
Annex A TITLE 31. INSURANCE PART II. AUTOMOBILE INSURANCE CHAPTER 65. [MISCELLANEOUS PROVISIONS] (Reserved) Subchapter C. [CHARTER AMENDMENTS; FINANCIAL REQUIREMENTS] (Reserved) § 65.21. [Definition of act] (Reserved).
[When used in this subchapter, the term act shall mean the Insurance Company Law of 1921 (40 P. S. §§ 361--488.5), unless the context clearly indicates otherwise.]
§ 65.22. [Authority for writing certain policies] (Reserved).
[Prior to November 27, 1968, the authority to write automobile bodily injury liability coverage was found in section 202(c)(4) of The Insurance Company Law (40 P. S. § 382(c)(4)), and the authority to write automobile property damage liability coverage was found in section 202(c)(11) of such act (40 P. S. § 382(c)(11)). The act has combined the authority for these two coverages in section 202(c)(11) (40 P. S. § 382(c)(11)).]
§ 65.23. [Charters automatically amended] (Reserved).
[(a) It shall be the position of the Insurance Department that the act has automatically amended all affected existing charters of insurance companies to reflect the change indicated in § 65.22 (relating to authority for writing certain policies). Therefore, no insurer need formally amend its charter in order to retain the same authority which it had prior to the enactment of the act.
(b) An insurer licensed for section 202(c)(4) powers under the Insurance Company Law (40 P. S. § 382(c)(4)) but not section 202(c)(11) powers prior to the act (40 P. S. § 382(c)(11)) shall hold full section 202(c)(4) powers plus a limited section 202(c)(11) power permitting the writing of automobile bodily injury liability coverage but none of the other coverages authorized by section 202(c)(11).
(c) An insurer licensed for section 202(c)(11) powers but not section 202(c)(4) powers prior to the act does not, by virtue of the act, automatically obtain the authority to write automobile bodily injury liability coverage; such additional authority may be obtained only by a formal amendment to the charter.]
§ 65.24. [Minimum paid-up capital for stock insurers] (Reserved).
[Domestic or foreign stock insurers which were authorized prior to November 27, 1968 to write policies of automobile liability insurance (whether bodily injury or property damage liability or both) in this Commonwealth shall, by November 27, 1973, have a minimum paid-up capital stock of $500,000.]
§ 65.25. [Minimum surplus for mutual insurers] (Reserved).
[(a) Nonassessable policies. Domestic mutual insurance companies which were authorized prior to November 27, 1968, to write nonassessable policies of automobile liability insurance, whether bodily injury or property damage liability, or both, in this Commonwealth shall, by November 27, 1973, have and thereafter maintain unimpaired a minimum surplus of $500,000 for this class of insurance.
(b) Only assessable policies. Domestic mutual insurance companies which were authorized prior to November 27, 1968, to write only assessable policies of automobile liability insurance, whether bodily injury or property damage liability, or both, in this Commonwealth shall, by November 27, 1973, have and thereafter maintain unimpaired a minimum surplus of $100,000 for this class of insurance.
(c) Foreign insurers. Foreign mutual insurers which were licensed prior to November 27, 1968, to write such policies, whether assessable or nonassessable, in this Commonwealth shall meet the same respective minimum surplus requirement by November 27, 1973.]
§ 65.26. [Determining compliance] (Reserved).
[The Insurance Department will contact each insurer not presently in compliance with the minimum financial requirement provisions of this subchapter in order to determine what course of action such insurer proposes to follow to meet the November 27, 1973, deadline.]
[Pa.B. Doc. No. 01-1804. Filed for public inspection October 5, 2001, 9:00 a.m.]
