INDEPENDENT REGULATORY REVIEW COMMISSION Actions Taken by the Commission [26 Pa.B. 5915] The Independent Regulatory Review Commission met publicly on Thursday, November 21, 1996, at 10:30 a.m. and took the following actions:
Regulations Approved:
Pennsylvania Public Utility Commission # 57-152--Line Extensions (amends 52 Pa. Code § 65.1 and adds sections 65.21, 65.22 and 65.23)
Pennsylvania Public Utility Commission # 57-156--Revisions of Rules and Administrative Practice and Procedure (amends 52 Pa. Code Chapters 1, 3, 5, 57 and 59)
Pennsylvania Insurance Department # 11-135--Requirements for Funds Held as Security for the Payment of Obligations of Unlicensed, Unqualified Reinsurers (amends 31 Pa. Code by adding Chapter 163)
Municipal Police Officers' Education and Training Commission # 17-55--Administration of the Training Program (amends 37 Pa. Code by adding a new Chapter 203 and by repealing Chapter 201)
Department of Agriculture # 2-108--Deletion of ''Grade AA'' Regulatory Standards for Milk (deletes the provisions of 7 Pa. Code Chapter 59)
State Board of Chiropractic # 16A-437--Examination Fees (amends 49 Pa. Code § 5.6)
Pennsylvania Insurance Department # 11-136--No-Fault Motor Vehicle Insurance (amends 31 Pa. Code by deleting Chapter 66)
Commissioners present: John R. McGinley, Jr., Chairperson; Robert J. Harbison, III, Vice Chairperson; Arthur Coccodrilli; John F. Mizner; Irvin G. Zimmerman
Public meeting held
November 21, 1996Pennsylvania Public Utility Commission--Line Extensions; Doc. No. 57-152
Order On September 23, 1994, the Independent Regulatory Review Commission (Commission) received this proposed regulation from the Pennsylvania Public Utility Commission (PUC). This rulemaking would amend 52 Pa. Code § 65.1 and add §§ 65.21, 65.22 and 65.23. This regulation would also delete § 69.171 Fixed utility line extensions--statement of policy. The authority for this regulation is 66 Pa.C.S. §§ 501 and 1501. The proposed regulation was published in the Pennsylvania Bulletin on October 8, 1994 with a 45-day public comment period. The final-form regulation was submitted to the Commission on November 12, 1996.
The PUC is proposing to establish a universal standard for determining when an individual may be required to contribute to the costs of a line extension for water utility service and the amount of contribution that will have to be made. The proposed regulation applied to large electric, water, natural gas, and local exchange telephone utilities. However, as a result of comments received during the proposed rulemaking stage, the final-form rulemaking only applies to line extensions for water utilities.
Historically, utilities have had provisions in their tariffs (rules, rates and conditions for service) that provided either a specific distance of free line extension or that established a utility contribution toward the costs of an extension based on the customer's expected revenue or consumption. In September 1992, the PUC adopted a Statement of Policy (52 Pa. Code § 69.171 Fixed utility line extensions--statement of policy) where it interpreted Pennsylvania appellate court decisions on when a customer should contribute to the costs of a line extension for all utilities. This policy statement provides that a utility can only require a customer contribution if a given line extension would materially handicap the utility in securing a fair return on its overall investment or would place an undue burden on utility customers.
Numerous complaints have been filed on utilities' line extension policies which have resulted in extensive litigation before the PUC. The PUC has not historically provided clear direction on line extensions and the utilities' policies have varied considerably. As a result, the PUC has had to decide numerous line extension complaints on a case-by-case basis with no apparent end in sight. The PUC developed this rulemaking in an effort to develop a fair and uniform policy for line extensions to alleviate litigation.
The rulemaking establishes an economic test to determine when a customer contribution may be required for a proposed water utility line extension. Customer contributions may be required at the point where annual revenue from the line extension is less than the utility's annual line extension costs. The utility's investment is determined by a formula in the regulation which includes factors directly related to the line extension including the utility's expected revenues and costs. A customer's contribution is determined by subtracting the utility's investment from the total construction costs for the line extension. The regulation further provides that utilities with $10 million or more in gross annual revenue shall give the customer the option of either paying the customer contribution over a period of not less than 3 years with the utility recovering financing costs, or providing information to the customer on financial institutions that may offer financing. Finally, the regulation creates a category called ''special utility service'' which is specifically exempted from the economic test in the rulemaking. Special utility service is defined as residential or business service which exceeds that required for ordinary residential purposes.
The Senate Consumer Affairs and Professional Licensure Committee met on November 13, 1996, and approved the rulemaking. The House Consumer Affairs Committee met on November 20, 1996, and approved the rulemaking.
All PUC jurisdictional public water utilities will be affected by the regulation. According to the PUC, the cost of compliance will vary from utility to utility since some companies already have policies which are at least as generous as the regulation while others are more restrictive. The PUC believes the economic test contained in the regulation will result in a substantially greater amount of footage at no cost to the customer. The regulation should provide a more streamlined approach to determine when a customer contribution may be required for a line extension. This should result in a decrease in the number of appeals and complaints being filed against utilities concerning whether contributions need to be made by customers and in the associated costs incurred by the utilities and the PUC.
We have reviewed this regulation and find it to be in the public interest. We compliment the PUC on their determination to improve this regulation. This regulation has been revised several times to resolve various concerns. We expressed serious concerns with a final-form regulation filed on March 21, 1996, and the PUC withdrew that final-form regulation on April 12, 1996. The PUC resubmitted a final-form rulemaking on October 28, 1996, but withdrew that final-form regulation on November 12, 1996, to correct a substantive error. The PUC resubmitted this final-form rulemaking on November 12, 1996. The following discussion highlights some of the previous concerns expressed and how the PUC resolved the issues.
In the final-form regulation submitted March 21, 1996, the PUC used an economic test to determine the percentage of the total construction costs the customer may be required to pay. Unfortunately, none of the definitions and nothing in the PUC's regulation clearly reflected an intent to net contributions against the utility's investment to calculate costs. In fact, the regulation, as interpreted by Table III in the PUC's Order approving the final-form regulation, showed an intent to base depreciation costs and debt costs upon the total cost of the line extension, which included the contributed property. For this reason, we believed the PUC's economic test was flawed. We recommended that the rulemaking be withdrawn to make the appropriate revisions. The PUC withdrew the rulemaking. In the resubmitted regulation, the PUC corrected the calculations to set contributions against the utility's investment. Therefore, the PUC has satisfactorily addressed our concern in this area.
The proposed regulation exempted ''special utility service'' from the economic test provisions of the regulation. Special utility service was defined as residential or business service which exceeds that required for ordinary residential purposes or service for which there is a safe, adequate and competitively priced alternative to meet the applicant's utility needs. If the utility determined that a line extension falls under the definition of special utility service, the customer no longer qualified for the economic test provisions in the regulation and would be required to bear the full cost of a line extension.
We saw two problems with the special utility service provision. First, we believed the economic test in the regulation should be used to strike a reasonable balance between the utility and all of its customers regardless of the service the customer was requesting. We did not believe any provisions beyond the economic test were necessary or reasonable. Second, the regulation also did not provide guidance on how to determine ''safe, adequate and competitively priced alternatives'' or how the utility would substantiate their existence to the customer. For these reasons we believed the special utility service provision should have been deleted. The PUC explained that there are circumstances where the special utility service provision would protect the utility. However, the PUC agreed that the utilities were not prepared to provide substantive alternatives to customers and the PUC deleted the ''safe, adequate and competitively priced alternatives'' from the final-form regulation. We believe the special utility service definition is now an acceptable compromise.
In every submittal to the Commission, including the PUC's order accompanying the final-form rulemaking, the rulemaking had a provision which exempted special utility service from all of the provisions except one. The single provision that was not exempted for special utility service provided for refunds of a portion of the money advanced by the original customer if more customers attached service lines to the main extension within 10 years. However, in the final-form regulation submitted on October 28, 1996, the PUC inadvertently exempted special utility service from the requirement to provide reimbursement of a portion of the advance if additional customers attach to the main extension. The PUC recognized the error and the regulation was withdrawn. The resubmitted regulation now contains the correct exemption language for special utility service.
The proposed regulation provided that a utility with gross annual receipts of $10 million or more must provide a line extension customer the option of financing the cost of the line extension over at least a 3-year period. Our comments recommended that the PUC delete this financing provision unless it could demonstrate a significant number of potential utility customers are having difficulty obtaining the cost of essential line extensions. We took this position because we do not believe utilities should be in the business of providing financial services to its customer or have the ability to perform this function. We suggested that if the PUC maintained the financing provision in the regulation, it should allow the utility to screen customers with poor credit histories and to charge market based rates.
In response to our concern, the PUC amended the regulation by providing two options which are within the discretion of the utility. The first option is that a utility may finance the customer's main extension costs over 3 years. The second option is that the utility may provide information to the customer on financial institutions that may offer financing. We believe the amended regulation provides the flexibility for a utility to avoid financing a customer's costs for a main extension and, therefore, we consider this issue to be resolved.
Finally, another concern we raised with the final-form rulemaking submitted March 21, 1996, was that it allowed a utility discretion in collecting the customer contribution. After establishing the ground rules for a fair and common policy, the central provision in section 65.21(b) states the following: ''. . . a bona fide service applicant may be required to provide a customer advance to the utility's cost of construction for the line extension.'' (Emphasis added.) We believed that in order for the regulation to be fairly applied, the word ''may'' should have been changed to ''shall'' because discretion could result in inequitable treatment of line extension requests.
The PUC addressed this concern in their Order and stated that ''a hard and fast rule would mean that companies wishing to be more generous would have to seek a waiver of the rule. . . .'' The PUC perceives a need to protect service applicants from overly zealous utilities, but the PUC does not perceive a need to protect the utilities from themselves. The PUC states that utilities do not as a rule make uneconomic or irrational business decisions by offering to fund their own line extensions when they are permitted to ask for a reasonable customer contribution. The PUC believes using the word ''shall'' would not address a compelling public interest.
We believe a more definitive guideline would avert more line extension proceedings before the PUC, or at a minimum make the adjudication of a complaint easier. Further, based upon the PUC's explanation in their Order, we question how the PUC will treat the resulting investment by a ''generous'' utility in a ratemaking proceeding if the utility foregoes the opportunity for a contribution and funds a line extension. A more definitive requirement could avoid even more future litigation because the exercise of discretion has the potential for inequitable treatment of customers requesting line extensions and could have future ratemaking implications. However, the PUC's complaint procedures and adversarial ratemaking process provide the opportunity to resolve these issues if they ever develop into a significant problem. Despite this remaining concern, the regulation is an improvement over the PUC's present procedures which have resulted in numerous case-by-case judgments on line extension complaints.
Therefore, It Is Ordered That:
1. Regulation No. 57-152 from the Pennsylvania Public Utility Commission, as submitted to the Commission on November 12, 1996, is approved; and
2. The Commission will transmit a copy of this Order to the Legislative Reference Bureau.
Commissioners Present: John R. McGinley, Jr., Chairperson; Robert J. Harbison, III, Vice Chairperson; Arthur Coccodrilli; John F. Mizner, Dissenting; Irvin G. Zimmerman
Public meeting held
November 21, 1996Pennsylvania Public Utility Commission--Revisions of Rules of Administrative Practice and Procedure; Doc. No. 57-156
Order On March 28, 1995, the Independent Regulatory Review Commission (Commission) received this proposed regulation from the Pennsylvania Public Utility Commission (PUC). This rulemaking would comprehensively amend and update the PUC's rules of Administrative Practice and Procedure at 52 Pa. Code Chapters 1, 3, 5, 57 and 59. The authority for this regulation is found in sections 331--335, 501, and 701--703 of the Public Utility Code (66 Pa.C.S. §§ 331--335, 501, and 701--703) and the Commonwealth Documents Law (45 P. S. § 1201 et seq.) and its attendant regulations at 1 Pa. Code §§ 7.1--7.4. The proposed regulation was published in the April 8, 1995 edition of the Pennsylvania Bulletin, with a 90-day public comment period. The final-form regulation was submitted to the Commission on October 28, 1996.
The PUC believes these amendments are necessary to improve the rules by changing provisions which are incorrect, inefficient or outdated. The PUC's stated objective is to produce procedural rules that are fair, efficient and clear. The rules were previously amended in 1984 and 1989. Approximately 100 sections are involved in these amendments, ranging from minor grammatical changes, rewording phrases and correcting references to adding entirely new sections to address perceived problems.
The PUC began this round of proposed changes by publishing an advance notice of proposed rulemaking in the Pennsylvania Bulletin on March 13, 1993. Following receipt of numerous comments and recommendations from PUC practitioners, a PUC internal committee made further changes before this rulemaking was adopted by the PUC.
Chapter 1 amendments section 1.8 (Definitions) includes certain new terms. For example, the rules now distinguish ''active parties'' from ''inactive parties'' in general rate cases. There is also now an Office of the ''Prothonotary'' (rather than ''Secretary'') of the PUC. The ''Prothonotary'' is the PUC office where pleadings and other documents are filed and records kept.
These amendments update a variety of procedural filing requirements. For example, under ''date of filing'' (section 1.11), a new subsection (c) has been added to explicitly prohibit telecopier facsimile transmission (fax) filings. The rationale is to ensure that the PUC's files contain clear and legible original documents. However, parties to litigation proceedings are not precluded from agreeing to accept faxed documents from each other. In the final-form regulation, new language has been added to subsection (b) in section 1.12 (relating to computation of time) to further clarify the rules on computing time.
Section 1.21 (appearance in person) and section 1.22 (appearance by attorney or certified legal intern), involve representation before the PUC. The PUC's proposed amendments to these sections were the most controversial provisions of this rulemaking, based on commentators' comments during the proposed rulemaking phase. Several commentators, including the Pennsylvania Bar Association's Unauthorized Practice of Law Committee (PBA) and the Attorney General's Office of Consumer Advocate (OCA), cited Pennsylvania's statutory and case law (and Pennsylvania Supreme Court Rules of Professional Conduct) which generally impose significant restrictions on using non-lawyers in the manner proposed in the revisions to sections 1.21 and 1.22.
For example, amendments proposed for section 1.22(d) would have allowed legal assistants (joining attorneys and legal interns), employed by or subject to the direct supervision of a currently certified Pennsylvania attorney, to represent an individual who files a formal complaint with the PUC's Bureau of Consumer Services alleging an inability to pay a utility bill. It was unclear whether this language was intended to allow such representation before an Administrative Law Judge (ALJ) in formal, adversarial hearings. The PUC's intent was to only allow legal assistants to be involved in representing complainants in non-hearing informal proceedings involving factual issues (for example, resolution of a complaint over a utility bill).
We concluded our Comments on the unauthorized practice of law issue by stating our belief that the representation of parties by legal assistants may be allowed only in informal proceedings before the PUC's Bureau of Consumer Services. We requested that section 1.22 of the final-form regulation be further amended, consistent with applicable law, to clarify the limits of legal assistants' representational authority. The PUC has further amended sections 1.21 and 1.22 in response to these concerns.
Section 1.21 of the final-form regulation has been revised and reorganized into four subsections for improved clarity. Subsection (a) provides that individuals may represent themselves in PUC proceedings. Subsection (b) now provides that in adversarial proceedings partnerships, corporations, trusts, associations, agencies, political subdivisions and government entities shall be represented only as provided under section 1.22 (for example, by attorneys and certified legal interns). The PUC also adopted a suggestion of the OCA and amended subsection (b) to provide that any request for a general rate increase (under 66 Pa.C.S. § 1307(f) or § 1308(d)), made under subsection (b), shall be considered to be an adversarial proceeding.
Section 1.21(c) is the former section 1.21(b). It provides that, in nonadversarial proceedings, a member of a partnership may represent the partnership, and a bona fide officer of a corporation, trust or association may represent the corporation, trust or association. An officer or employe of another agency, political subdivision or government entity may represent the agency or political subdivision before the PUC and in conjunction with formal proceedings under Chapter 5 (relating to formal proceedings).
Section 1.21(d) is new in the final-form regulation. It provides that in informal proceedings brought under Chapters 56 and 64 (relating to standards and billing practices for residential utility service and residential telephone service, for example, residential utility billing disputes), parties may be represented by paralegals working under the direct supervision of an attorney admitted to the Pennsylvania Bar or by another appropriate individual. The PUC substituted the word ''paralegals'' for ''legal assistants'' and clarified that the role of paralegals as representatives is limited to only informal proceedings, which involve efforts to resolve factual issues in billing disputes. Since informal proceedings do not involve legal issues, the PUC also provided, for added flexibility, that parties may be represented by paralegals supervised by a licensed attorney or another appropriate individual.
Section 1.22 now provides for representational appearance by an attorney or a certified legal intern. The proposal to allow an appearance by a ''legal assistant'' has been dropped, as was the proposed subsection (d). Subsection (a) provides that a Pennsylvania attorney may represent individuals, partnerships, associations, corporations or government entities in PUC proceedings. Subsection (b) would allow an attorney from another state to represent a party in a PUC proceeding even if a Pennsylvania attorney would not be accorded like privileges in that other state, if so allowed in the discretion of the presiding officer or the PUC. Sections 1.22(c) would allow law students meeting the requirements of Pennsylvania Bar Admission Rule 321 to appear in PUC proceedings consistent with Pennsylvania Bar Admission Rule 322 (relating to authorized activities of certified legal interns).
In the proposed version, the PUC amended section 1.36 to allow a party's attorney to personally verify all applications, petitions, formal complaints, motions and answers. In our Comments on the proposed rulemaking, we questioned the PUC's justification for allowing an attorney to sign a verification since, in many cases, the attorney may know only what has been disclosed by the client. We suggested the PUC adopt alternative section 1.36(a) language proposed by Duquesne Light Company (Duquesne Light). The PUC did so in the final-form regulation and also deleted the reference to a party's attorney executing a verification.
Section 1.54(c) provides for service of process by mail and how that is to be done. In our Comments on the proposed rulemaking we suggested some language changes to improve clarity and allow the use of other modes of delivery (for example, by Federal Express). The PUC incorporated our suggested language in the final-form regulation.
Other subchapters of Chapter 1 may be summarized as follows. Subchapter D deals with requirements for documentary filings and provides basic filing forms. Subchapter E relates to fees. Section 1.43(a) increases the fee to provide copies of microfilm from $25 per roll to $80 per roll. Minor clarifying amendments are also proposed in the language of other subchapters including: Subchapter F, dealing with service of documents; Subchapter G, dealing with matters before other tribunals; and Subchapter H, relating to public access to PUC records.
A number of clarifications/corrections have been made in Chapter 3 (relating to special provisions). Subchapter A deals with special PUC actions. It includes procedures for emergency orders and interim emergency orders, including their issuance or denial, and hearings on them. An ''emergency order'' is an ex parte order issued by a single PUC Commissioner, the PUC, the PUC's Director of Operations or his executive assistant, or the PUC's Secretary, in response to an emergency. This change has been made to reflect the PUC's current practice of having the PUC's Secretary sign emergency orders when a PUC Commissioner or the Director of Operations is not available. Other sections deal with various procedural matters relating to emergency orders.
Subchapter B of Chapter 3 deals with informal complaint procedures. Section 3.111(b) provides that informal complaints in rate cases be filed with the Prothonotary of the PUC. All other informal complaints instituted by a letter or other informal communication are to be filed with the PUC's Bureau of Consumer Services. Non-rate case informal complaints involve mostly billing/ability-to-pay disputes with utilities. The filing of an informal complaint may lead to the filing of a formal complaint with the PUC, which would be a more formal, adversarial proceeding before an ALJ.
Section 3.501 (relating to certificate of public convenience as a water or wastewater treatment supplier), has been expanded and refined to cover wastewater treatment suppliers. The PUC states that it coordinated these provisions with the Department of Environmental Protection (DEP). Subsection (d) requires service of applications upon the OCA, the Office of Small Business Advocate (OSBA), and the DEP. The protest subsection has been moved to section 3.502, which sets out the requirements for filing protests in more detail. Section 3.551 sets forth a listing of various official PUC forms.
There is a new Subchapter I (sections 3.601 and 3.602) with requirements for public utilities to file a notice of registration of a securities certificate with the PUC before they may issue or assume securities. This information, currently in Form L, is slightly revised and moved into the body of this regulation.
Chapter 5 (relating to formal proceedings) deals with amendments to the procedural requirements for formal PUC proceedings (as distinguished from ''informal'' proceedings before the PUC's Bureau of Consumer Services). These include sections 5.21 (formal complaints, generally) and 5.41 (petitions, generally), which add new subsections requiring that petitions be served upon the OCA, the PUC's Office of Trial Staff and, if applicable, the OSBA. Section 5.21(d) spells out that the filing of a formal complaint generally entitles the complainant to a formal trial-type hearing unless the PUC determines that the complaint should be dismissed without hearing if, in its opinion, a hearing is not necessary in the public interest. New language relating to the filing of motions has been added to further clarify section 5.21(d).
Many other sections in Chapter 5 have been expanded or otherwise include a variety of clarifying amendments, including those dealing with hearings and other conferences, settlements and stipulations, transcripts, interlocutory (for example, interim or pre-final) review of PUC rulings, discovery, evidence and witnesses, subpoenas and protective orders and presiding officers.
The PUC also has made minor clarifying amendments to section 57.26 (relating to construction and maintenance of electrical service facilities), and to sections 57.45 and 59.45 (preservation of records) relating to electric service and gas service, respectively.
These comprehensive amendments of the PUC's procedural rules will affect public utilities subject to the PUC's jurisdiction, including those providing gas, water, telecommunication, electric and some transportation services. The amendments will also affect other parties who appear before the PUC in connection with various complaints or requests for approval of utility rate changes. In terms of record keeping and reporting impacts, certain amendments may require some additional information while other amendments may reduce or otherwise lessen current requirements.
There is one direct cost increase associated with this rulemaking. Section 1.43(a), relating to schedule of fees payable to the PUC, would increase the fee to provide copies of microfilm from $25 per roll to $80 per roll. The PUC states that it has done so following an in-house cost study, which establishes that the proposed new charge reflects its actual costs. No opposition was expressed about this change.
Commentators on the proposed version of this rulemaking, in addition to this Commission, were the PBA; Central Pennsylvania Paralegal Association; National Federation of Paralegal Associations, Inc.; DEP; Duquesne Light; law firms of Kirkpatrick & Lockhart and Malatesta, Hawke & McKeon; OCA; OSBA; PECO Energy Company; Pennsylvania Conference of Administrative Law Judges; Pennsylvania Gas Association; Pennsylvania Power Company; West Penn Power Company; PUC Office of Trial Staff; PUC's Special Assistants and its Bureaus of Audits, Law and the Secretary; and Raymond A. Thistle, Jr., Esquire.
Most, but not all, comments consisted of suggested refinements and ''fine-tuning'' amendments. After carefully considering all comments, the PUC further revised the final-form regulation. There were also a number of suggested changes that the PUC chose not to make. The PUC staff stated that in some instances certain suggested changes were determined to be too costly, administratively too burdensome, or otherwise were inappropriate to adopt.
On November 13, 1996, the Senate Consumer Protection and Professional Licensure Committee met and voted to approve the final-form regulation.
The Commission received four comment letters on the final-form regulation. Letters from the Harrisburg law firm of Maletesta, Hawke & McKeon and the Keystone Alliance of Paralegal Associations were supportive of the final-form regulation. The Pennsylvania Gas Association suggested a further clarification be made. The comment letter from the PBA objected to the use of the word ''paralegals'' in section 1.21(d) as an ambiguous and imprecise term. The PBA also noted that this provision could be interpreted as allowing ''another appropriate individual'' (for example, someone other than a non-Pennsylvania licensed attorney) to supervise paralegals. It is the PBA's position that paralegals must be supervised exclusively by attorneys.
At our public meeting, the PUC representative stated that the term ''paralegal'' was used to refer to a general class of individuals and clarified that the phase ''another appropriate individual'' is intended to allow a company's customer service representative or some other person to participate in a billing dispute between the utility and its customer. While the wording of this section could be improved, we agree with the PUC's position on this issue.
We also note that PUC Commissioner John Hanger issued a Statement in connection with the PUC's Order approving the submission of this final-form regulation. Commissioner Hanger, reflecting a concern he raised initially in connection with the proposed version of this rulemaking, stated that section 1.21 should be amended to make clear that non-attorneys may appear as witnesses presenting factual testimony in adversarial proceedings before an ALJ without having to hire an attorney to sponsor their testimony.
We understand Commissioner Hanger's concern that it may not be economically feasible or practical for small utilities to hire an attorney so that a witness can give factual testimony in an adversarial proceeding. However, any business which has been incorporated is required by Pennsylvania law to be represented by an attorney in adversarial proceedings. In effect, for the corporation to have legal standing so that an owner or other person may present factual testimony in a proceeding before an ALJ, the testimony must be sponsored by an attorney who has entered an appearance on behalf of the corporation. This is in contrast to the section 1.21(a) rule which allows individuals to represent themselves in either formal or informal PUC proceedings.
We have reviewed this regulation and find it to be in the public interest. The final-form regulation incorporates extensive amendments, including many of those suggested by commentators. These revisions will update incorrect, inefficient or outdated provisions and result in fairer, more efficient and clarified PUC procedural rules.
Therefore, It Is Ordered That:
1. Regulation No. 57-156 from the Pennsylvania Public Utility Commission, as submitted to the Commission on October 28, 1996, is approved; and
2. The Commission will transmit a copy of this Order to the Legislative Reference Bureau.
Commissioners Present: John R. McGinley, Jr., Chairperson; Robert J. Harbison, III, Vice Chairperson; Arthur Coccodrilli; John F. Mizner; Irvin G. Zimmerman
Public meeting held
November 21, 1996Insurance Department--Requirements for Funds Held as Security for the Payment of Obligations of Unlicensed, Unqualified Reinsurers; Doc. No. 11-135
Order On February 27, 1996, the Independent Regulatory Review Commission (Commission) received this proposed regulation from the Insurance Department (Department). This rulemaking would amend 31 Pa. Code by adding Chapter 163. The authority for this regulation is found in sections 319, 319.1 and 319.2 of the Insurance Law of 1921 (Act) (40 P. S. §§ 442, 442.1 and 442.2). The proposed regulation was published in the March 9, 1996 Pennsylvania Bulletin with a 30-day public comment period. The final-form regulation was submitted to the Commission on November 4, 1996.
Reinsurance is an agreement in which one insurance company (the ceding insurer) purchases insurance from another insurance company (the reinsurer) to cover the potential losses the ceding insurer may incur from the policies it has underwritten. By ''ceding'' a portion of the risk of loss to a reinsurer, the ceding insurer is protected from operating losses and can underwrite a greater number of policies.
According to the Department, for accounting purposes a ceding insurer may create an asset for losses it is entitled to recover from a reinsurer or reduce its liabilities for losses that are reinsured. This accounting transaction is called credit for reinsurance. However, if the reinsurer is not licensed by the Department or is not on the Department's list of qualified reinsurers, the reinsurer must provide collateral for the amount it is obligated to pay the ceding insurer under the reinsurance agreement. The collateral must meet the requirements established in the proposed regulation for the ceding insurer to take credit for the reinsurance.
This regulation establishes minimum requirements for trust agreements, letters of credit and other types of security approved by the Department for credit for reinsurance ceded to unlicensed, unqualified reinsurers. The regulation is intended to ensure that the collateral provided by the reinsurer to back up its obligations under the reinsurance agreement meets minimum standards for quality and collectibility.
In our Comments submitted in response to the proposed rulemaking, we raised several issues relating to the clarity of the regulation. The Department agreed with the vast majority of our recommendations, and the final-form regulation reflects the changes we suggested in our Comments. However, the Department rejected two of our recommendations. In addition, the Insurance Federation of Pennsylvania (IFP) made a recommendation in its comments on the proposed rulemaking relating to credit for reinsurance ceded to an alien reinsurer. A discussion of these issues follows.
Section 163.6(a) provides that assets in trust accounts must be in the form of security permitted by 40 P. S. § 442.1(b). However, the regulation does not list the types of security permitted by 40 P. S. § 442.1(b). In our Comments, we noted that the clarity of the regulation could be improved by including a list of acceptable types of security. Therefore, we recommended that in the final-form regulation, the Department provide a list summarizing the types of security permitted by 40 P. S. § 442.1(b).
In response, the Department stated that it believes domestic insurers have ready access to and are familiar with the laws and regulations affecting reinsurance agreements, and with statutory accounting principles related to reinsurance agreements. The Department stated that it believes summarizing the statutory requirements in the regulation could increase the potential for misinterpretation and noncompliance. The Department does not object to reciting statutory language that is not lengthy or subject to misinterpretation if taken out of context of the statute. However, because of the nature and length of 40 P. S. § 442.1(b), the Department decided not to repeat it in the regulation.
We agree with the Department that misinterpretation is possible if portions of the statute are taken out of context. In addition, no party has raised any objection to the reference to 40 P. S. § 442.1(b) in the regulation. Therefore, we believe the Department has sufficiently justified its reasons for rejecting the recommendation we made on this issue in our Comments.
Section 163.8 provides the conditions under which the trustee may resign or be removed. In its comments, IFP proposed to add an additional provision to subsection (3) which would allow for replacement of a trust with a letter of credit. In our Comments, we noted that it was our understanding that nothing in the regulation would prevent a trust from being replaced with a letter of credit. We noted that the clarity of the regulation could be improved by adopting IFP's recommendation. We recommended that the Department incorporate IFP's proposal in the final-form regulation.
In its response, the Department agreed that nothing in the regulation precludes one form of security from being replaced with another. The Department noted that the introductory statement in section 163.8 provides the following:
This section applies if the resignation or removal of a trustee does not result in the termination of the trust agreement under § 163.9 (relating to termination of trust agreements). (Emphasis added.)
Based on this introductory statement, the Department explained that the restrictions in section 163.8 apply only when there is a change in the trustee for an existing agreement, not when an agreement is terminated and replaced with another form of security. Therefore, the Department concluded that IFP's recommendation would contradict, rather than clarify, the existing language.
We believe the Department has sufficiently explained why it rejected IFP's recommendation. Consequently, we have no outstanding concerns on this issue.
A domestic insurer may take credit for reinsurance ceded to an alien reinsurer under certain circumstances. Credit for reinsurance is permitted if the alien reinsurer is licensed in Pennsylvania, included on the Department's list of qualified reinsurers, or provides collateral to back up its obligations under the reinsurance agreement. In its comments, IFP proposed to add a new subsection (c) to section 163.20 (Other security acceptable to the Commissioner) which would permit credit for reinsurance ceded to a reinsurer domiciled and licensed in an alien jurisdiction. IFP proposed to permit credit for reinsurance if:
1. The alien jurisdiction has standards similar to those of Pennsylvania;
2. The reinsurance is recognized by the regulatory authority of the alien jurisdiction;
3. The reinsurance or the alien jurisdiction is approved by Pennsylvania's Insurance Commissioner; and
4. The credit for reinsurance is no more than 10% of the domestic ceding insurer's policyholder surplus as of the last filing.
In our Comments, we stated that IFP's proposal would place the burden on the Department of determining if the reinsurance requirements in a foreign country are comparable to those in Pennsylvania. We stated the burden of proving that reinsurance provided by an unqualified, alien reinsurer is acceptable should fall on the ceding insurer, not the Department. We further stated it would be inappropriate to assume that because the reinsurance is recognized by the regulatory authority of the alien jurisdiction it meets minimum standards for quality and collectibility in Pennsylvania.
To determine if the standards in an alien jurisdiction are comparable to those in Pennsylvania, the Department would not only have to be familiar with the alien jurisdiction's reinsurance standards, but also its laws and insurance practices. Without this information, it would be inappropriate for Pennsylvania's Insurance Commissioner to approve the reinsurance or the alien jurisdiction, even with the 10% limit proposed by IFP. We also noted in our Comments that alien reinsurers may conduct business in Pennsylvania by becoming ''qualified'' to do business in Pennsylvania under the requirements for qualifications set forth in 31 Pa. Code § 161.3(3).
We stated that we recognized the merit of IFP's position that no alien reinsurer may be as financially sound as a domestic reinsurer and able to meet its obligations under the reinsurance agreement. However, IFP's proposed subsection (c) placed the burden of demonstrating that the alien reinsurer can meet its obligations on the Department. We asserted in our Comments that this burden should fall on the ceding insurer. Consequently, we did not support IFP's proposal.
In the Preamble to the final-form regulation, the Department stated that it had given further consideration to IFP's recommendation but elected not to change its initial position on this issue. The Department asserts that existing laws and regulations provide sufficient alternatives for receiving credit for reinsurance. They emphasized that credit is allowed if an alien reinsurer:
1. Becomes licensed to transact business in Pennsylvania;
2. Becomes designated by the Insurance Commissioner as a qualified reinsurer; or
3. Provides collateral to cover its obligations.
The Department also pointed out that 31 Pa. Code § 161.8 provides the conditions under which partial credit for reinsurance with an alien reinsurer may be taken without full collateralization. In addition, the Department stressed the difficulty in making a determination that an alien jurisdiction's laws and standards are comparable to those in Pennsylvania, and in monitoring the status of the alien jurisdiction's laws and standards on an ongoing basis. The Department concluded that IFP's recommendation would unnecessarily increase the financial risk to domestic insurers.
We believe the decision to reject IFP's recommendation relating to alien reinsurers is appropriate. The Department has analyzed IFP's position and determined that it is not in the best interest of domestic insurers.
We have reviewed this regulation and find it to be in the public interest. The final-form regulation will benefit domestic ceding insurers by protecting their interests in reinsurance agreements with unlicensed, unqualified reinsurers.
Therefore, It Is Ordered That:
1. Regulation No. 11-135 from the Insurance Department, as submitted to the Commission on November 4, 1996, is approved; and
2. The Commission will transmit a copy of this Order to the Legislative Reference Bureau.
[Continued on next Web Page]
[Continued from previous Web Page] Commissioners Present: John R. McGinley, Jr., Chairperson; Robert J. Harbison, III, Vice Chairperson; Arthur Coccodrilli; John F. Mizner; Irvin G. Zimmerman
Public meeting held
November 21, 1996Municipal Police Officers' Education and Training Commission--Administration of the Training Program; Doc. No. 17-55
Order On May 21, 1996, the Independent Regulatory Review Commission (Commission) received this proposed regulation from the Municipal Police Officers' Education and Training Commission (MPOETC). This rulemaking would amend 37 Pa. Code by adding a new Chapter 203 and by repealing Chapter 201. The authority for this regulation is section 5 of the Municipal Police Officers Education and Training Law, act of June 18, 1974 (act) (53 P. S. § 744(15)) which grants the MPOETC the authority to make rules and regulations as may be necessary to implement education and training programs for police officers. The proposed regulation was published in the June 15, 1996 Pennsylvania Bulletin with a 30-day public comment period. The final-form regulation was submitted to the Commission on October 25, 1996.
The purpose of this regulation is to implement mandatory recruit training for all police officers and to provide for certification of those individuals who successfully complete the training, who are employed by a political subdivision or certain colleges or are deputy sheriffs employed by the Allegheny County Sheriff's Office. The regulation provides that certification must be renewed every 2 years and mandates that an officer must complete at least 12 hours of in-service training yearly and maintain certification in first aid, CPR and weapons qualification. The regulation also sets physical, psychological and criminal standards for police officers. Those officers that do not meet the standards are subject to decertification.
The proposed Chapter 203 also establishes certification requirements for training schools, including minimum equipment and space standards, annual inspections by the MPOETC and procedures pertaining to the revocation of a school's certification. Schools are also required to comply with public safety standards established under the Fire and Panic Act.
The regulation establishes the basic police training course curriculum consisting of 16 prescribed areas of instruction including: Pennsylvania criminal law; patrol procedures and operations; and human relations skills. The rulemaking also includes a cheating policy which bars an individual observed cheating from further participation in required training. Requirements are also provided for the certification of basic and special police training instructors.
Section 749(a) of the act specifically establishes that the MPOETC ''shall provide for reimbursement to each political subdivision of 100% of the allowable tuition and the ordinary and necessary living and travel expenses incurred by their police officers while attending certified municipal police basic training schools.'' The regulation reiterates the requirement contained in the act.
The MPOETC reports that there are currently 21 schools certified to provide basic training across the State; five of those schools are run by the Pennsylvania State Police. Annually, there are approximately 1,000 to 1,500 new officers that participate in the 13-week basic training course while there are 17,000 to 18,000 existing officers that participate in the in-service training.
Over 80% of the MPOETC's annual budget of $80 million is utilized for grants and subsidies that pay for basic, mandatory in-service and nonmandatory in-service training. A 13-week (520 course hours) basic training course ranges in cost from $2,000 to $3,000 depending upon the location of the school providing the training.
The MPOETC notes that since the requirements of the act, enacted in 1988, are currently being met on a voluntary basis, no new costs are anticipated as a result of the promulgation of this rulemaking.
As noted previously, all officers must comply with mandatory in-service training, first aid, CPR and weapons qualifications annually, or they may be decertified. Therefore, some officers who were ''grandfathered'' for basic training purposes, will now have to comply with the mandatory in-service training for the first time.
The cost to municipalities will be for transportation of officers to in-service training schools and in maintaining first aid, CPR and firearms qualifications and costs associated with paying overtime or salaries to the officers attending the training.
The MPOETC has implemented nearly every suggestion contained in our Comments. There are only two minor issues where the MPOETC declined to adopt our suggestions; for both issues it provided a compromise.
The first issue relates to the request from the Department of Conservation and Natural Resources, Bureau of State Parks, for the inclusion of a specific provision which would permit the MPOETC to provide instructor training to law enforcement officers employed by the Bureau of State Parks. The MPOETC elected not to amend the final-form regulation primarily because there are a number of other agencies who have also requested instructor training. The MPOETC reports that its resources would not permit it to train a large number of instructors from outside agencies. However, the MPOETC notes that officers from these agencies are able to receive training under section 203.82(b).
The second issue relates to our recommendation to include the specific number of course hours required to complete the basic police training course. We made this recommendation because we believe that the number of hours is essential information that should be included in the regulation. However, the MPOETC declined to adopt the recommendation because the MPOETC provides the schools with the entire curriculum which may not be modified in any way. Additionally, the curriculum is periodically revised as a result of court decisions or through outside consultants hired to review the curriculum. However, to address our concern of ensuring public notification, the MPOETC agreed to amend the section by adding language indicating that it will publish notice in the Pennsylvania Bulletin and its own newsletter whenever the number of course hours changes.
We have reviewed this regulation and find it to be in the public interest. This final-form regulation establishes minimum training standards for the selection and continued employment of municipal police officers within the Commonwealth and reflects the provisions of the act amended in 1988.
Therefore, It Is Ordered That:
1. Regulation No. 17-55 from the Municipal Police Officers' Education and Training Commission, as submitted to the Commission on October 25, 1996, is approved; and
2. The Commission will transmit a copy of this Order to the Legislative Reference Bureau.
Commissioners Present: John R. McGinley, Jr., Chairperson; Robert J. Harbison, III, Vice Chairperson (abstaining); Arthur Coccodrilli; John F. Mizner; Irvin G. Zimmerman
Public meeting held
November 21, 1996Department of Agriculture--Deletion of ''Grade AA'' Regulatory Standards for Milk; Doc. No. 2-108
Order On July 17, 1996, the Independent Regulatory Review Commission (Commission) received this proposed regulation from the Department of Agriculture (Department). This rulemaking is proposing to delete the provisions of 7 Pa. Code Chapter 59 that allow milk processed in the Commonwealth to be sold in the Commonwealth as ''Grade AA'' milk. The amendments are proposed under the authority of the act of July 2, 1935 (Act) (31 P. S. §§ 645--660f) which authorizes the Department to regulate the production, processing, storage and packaging of milk to safeguard human health. The proposed regulation was published in the July 27, 1996 Pennsylvania Bulletin, with a 30-day public comment period. The final-form regulation was submitted to the Commission on October 22, 1996.
The National Council of Interstate Milk Shippers (NCIMS), of which Pennsylvania is a member, prohibits its members from developing super-grade designations for the quality of milk. NCIMS has determined that using the ''Grade AA'' standard violates the interstate agreement under which ''Grade A'' milk moves unimpeded in interstate commerce.
NCIMS is an organization created by the United States Food and Drug Administration Milk Safety Branch, state regulatory agencies and the Nation's dairy industry to standardize regulations to ensure the safety of the milk supply and to facilitate the interstate shipment of milk. All states are members of this organization. NCIMS developed a uniform set of standards (Grade A Pasteurized Milk Ordinance) which allows member states' milk to move in interstate commerce to other member states without those states imposing any further sanitation or testing requirements.
Under current regulations, milk processed within the Commonwealth may be designated Grade AA if it meets prescribed chemical, bacteriological and temperature standards. The Grade AA designation of milk is a voluntary standard that dairies may elect to meet. The distinguishing factor in the preparation of Grade A verses Grade AA milk is the prescribed limits of acceptable bacteria. Grade AA milk must have lower amounts of bacteria per milliliter than Grade A milk. The bacteria limits are not indicative of product safety but rather are reflective of the quality of the milk.
The Department revised its milk sanitation regulations in 1982 and planned to delete the provisions relating to Grade AA at that time. However, a committee of dairy processors requested the retention of Grade AA standards and agreed to refrain from seeking certification for the interstate shipment of their milk in exchange for the retention of those standards.
At the time, the Department believed retention of the Grade AA standard for certain milk processed and sold only within this Commonwealth would not be violative of NCIMS standards and would not place milk processed by other NCIMS states at a competitive disadvantage. However, out-of-State dairy processors who process milk in compliance with NCIMS Grade A milk standards have complained that they are at a competitive disadvantage when marketing their milk in Pennsylvania. In fact, the larger Pennsylvania dairies have also complained about the competitive disadvantage they experience when marketing their Grade A milk against Grade AA milk.
On December 27, 1995, the NCIMS ruled that the Commonwealth's Grade AA standards violate the NCIMS's Grade A Pasteurized Milk Ordinance. NCIMS made clear its intention to designate the Commonwealth as a state that is not in compliance with the NCIMS Grade A Pasteurized Milk Ordinance if the Commonwealth does not promptly delete its Grade AA standards.
Specifically, Part II, Section 4 of NCIMS's Grade A Pasteurized Milk Ordinance states:
. . . The use of super grade designations shall not be permitted. Grade designations such as ''Grade AA Pasteurized'' . . . give the consumer the impression that such a grade is significantly safer than Grade A. Such an implication is false, because the Ordinance requirements for Grade A pasteurized, ultrapasteurized or aseptically processed milk when properly enforced, will insure that this grade of milk will be as safe as milk can practicably be made.
Grade AA milk represents less than 5% of the Commonwealth's dairy output. The Department reports that there are five smaller dairies that process Grade AA milk (two in the Harrisburg area and three in the Pittsburgh area). In contrast, Grade A milk represents over 90% of the Commonwealth's dairy output. The Commonwealth is a chief exporter of dairy products, and the majority of the Commonwealth's dairy production is in compliance with NCIMS standards to facilitate this export industry.
If the NCIMS designates the Commonwealth as a state that is not in compliance with the Grade A Pasteurized Milk Ordinance, the immediate effect would be to allow member states to embargo Pennsylvania-processed milk or impose sanitation, testing or compositional requirements that would impede the interstate sale of Pennsylvania produced milk and milk products. As an example, the Department indicates that the state regulatory agency overseeing Maryland's dairy industry has indicated that it would require Pennsylvania dairy processors to be inspected by Maryland inspection personnel as a prerequisite to the importation of Pennsylvania-processed milk into Maryland.
The Department acknowledges that the deletion of Grade AA standards may impose some costs upon the Pennsylvania-based dairy processors that currently process milk meeting Grade AA requirements. Although the dairy processors would experience a decrease in testing costs, these processors might suffer some short-term financial loss of customers familiar with the Grade AA designations. It is not known whether these losses would be entirely offset by decreased testing costs.
Failing to delete the Grade AA standards would subject Pennsylvania-produced milk and milk products to embargoes or additional testing requirements of other NCIMS member states. The Department notes that the adverse fiscal impact on the Commonwealth's dairy industry would be immediate and dramatic, and would outweigh any adverse fiscal impact imposed by the promulgation of this regulation upon Grade AA dairy processors.
The regulatory amendment is necessary to keep Pennsylvania milk and milk products competitive in interstate commerce, and to prevent the imposition of embargoes or burdensome inspection or certification requirements upon Pennsylvania-processed milk and milk products by other states.
Representative Raymond Bunt, Jr., Chairperson, of the Agriculture and Rural Affairs Committee, submitted a letter dated September 13, 1996, indicating that the Committee members ''recognize the fact that because of the substantial negative implications for the entire milk industry of the NCIMS ruling that Pennsylvania's Grade AA standards violate the Pasteurized Milk Ordinance, the Department has very little choice but to proceed with this proposal.''
The final-form regulation contains no changes from the proposed regulation. We did not file any comments on the proposed regulation. Furthermore, we did not receive any negative recommendations on the final-form regulation from either the House or Senate Agriculture and Rural Affairs Committees.
Therefore:
The Commission will notify the Legislative Reference Bureau that Regulation No. 2-108 from the Department of Agriculture, as submitted to the Commission on October 22, 1996, was deemed approved under section 5(b.3) of the Regulatory Review Act (71 P. S. § 745.5(b.3)) on November 13, 1996.
Commissioners Present: John R. McGinley, Jr., Chairperson; Robert J. Harbison, III, Vice Chairperson; Arthur Coccodrilli; John F. Mizner; Irvin G. Zimmerman
Public meeting held
November 21, 1996State Board of Chiropractic--Examination Fees; Doc. No. 16A-437
Order On October 28, 1996, the Independent Regulatory Review Commission (Commission) received this regulation from the State Board of Chiropractic (Board). This rulemaking would amend 49 Pa. Code § 5.6. The authority for this rulemaking is section 812.1 of The Administrative Code of 1929 (71 P. S. § 279.3a) and section 1101(a) of the Chiropractic Practice Act (63 P. S. § 625.1101(a)). Notice of proposed rulemaking was omitted for this regulation; it will become effective upon publication in the Pennsylvania Bulletin.
This regulation increases the fee for the radiologic procedures examination from $55 to $75. The fee will become effective for examinations given after July 1, 1997. The first examinations after that date are scheduled for November 1997. The Board contracts with the American Chiropractic Registry of Radiologic Technologists (ACRRT) to prepare and administer this examination.
The fee increase is necessary due to an increase in the contract costs. This past May, approximately 115 candidates took the examination in Pennsylvania according to the Board. To obtain certification to perform radiologic procedures under the direct supervision of a chiropractor who is on the premises, candidates must pass the ACRRT certifying examination. This regulation will impose an additional cost of $20 on future applicants for certification. The Board claims that there is no additional cost for the Commonwealth or local governments.
The House Professional Licensure Committee and the Senate Consumer Protection and Professional Licensure Committee approved this final-form regulation on November 13, 1996.
We have reviewed this regulation and find it to be in the public interest. Section 812.1(b) of The Administrative Code of 1929 requires that the ''applicants' fees cover the entire cost of the examination.'' This regulation is necessary to meet this statutory requirement. The Board asserts that all persons affected by this regulation have been or will be given actual notice of its intention to increase the fee before final rulemaking under section 204(2) of the Commonwealth Documents Law (45 P. S. § 1204(2)). We greatly appreciate the timeliness of the rulemaking adopting this fee increase. By implementing this regulation now, the Board is providing affected parties with practically a full year's notice of the fee increase. We commend the Board for this effort and encourage all the licensure boards and the Bureau of Professional and Occupational Affairs to implement future fee increases in a similar fashion to provide ample notice to all affected individuals and organizations.
Therefore, It Is Ordered That:
1. Regulation No. 16A-437 from the State Board of Chiropractic, as submitted to the Commission on October 28, 1996, is approved; and
2. The Commission will transmit a copy of this Order to the Legislative Reference Bureau.
Commissioners Present: John R. McGinley, Jr., Chairperson; Robert J. Harbison, III, Vice Chairperson; Arthur Coccodrilli; John F. Mizner; Irvin G. Zimmerman
Public meeting held
November 21, 1996Insurance Department--No-Fault Motor Vehicle Insurance; Doc. No. 11-136
Order On November 4, 1996, the Independent Regulatory Review Commission (Commission) received this regulation from the Insurance Department (Department). This rulemaking would amend 31 Pa. Code by deleting Chapter 66. The authority for this regulation is contained in sections 206, 506 and 1501 of The Administrative Code of 1929 (71 P. S. §§ 66, 186 and 411) and 75 Pa.C.S. Chapter 17 and § 6103. Notice of proposed rulemaking was omitted for this regulation; it will become effective upon publication in the Pennsylvania Bulletin.
This proposal deletes Chapter 66 from Title 31. Chapter 66 was promulgated under the Pennsylvania No-fault Motor Vehicle Insurance Act of 1974 (Act 176). Chapter 66 is obsolete because Act 11 of 1984, the Motor Vehicle Insurance Responsibility Law (MVIRL), became effective October 1, 1984. The Department promulgated regulations to implement the MVIRL as Chapter 67 of Title 31.
The Insurance Federation of Pennsylvania (IFP) commented that the assigned claims plan provided for in section 66.131, Assigned Claims Plan, and section 66.111(b) pertaining to application of motorcycle security, is still in existence and continues to have responsibilities.
We agree with the IFP's position that notice of obligations of the assigned claims plan established in Chapter 66 must be retained. Section 9 of the act of February 12, 1984 (P. L. 53, No. 12) states:
Savings provision--Notwithstanding the repeal of the act of July 19, 1974 (P. L. 489, No. 176), known as the Pennsylvania No-fault Motor Vehicle Insurance Act, the requirement to fund the payment of assigned claims under section 108 of that act remains unaffected.
On November 15, 1996, the Department submitted an amendment to its preamble and annex which inserts an historical note at sections 66.111 and 66.131 to state that requirement to fund the payment of assigned claims under section 108 of Act 176 remains unaffected.
We have reviewed this regulation and find it to be in the public interest. Obsolete provisions in Chapter 66 are replaced by Chapter 67 which contains requirements of the MVIRL. The repeal of provisions in Chapter 66 which are no longer applicable will remove out-of-date requirements, thereby facilitating ease of use and avoiding unnecessary confusion because only current requirements for motor vehicle insurance will be retained.
Therefore, It Is Ordered That:
1. Regulation No. 11-136 from the Insurance Department, as submitted to the Commission on November 4, 1996, and amended on November 15, 1996, is approved; and
2. The Commission will transmit a copy of this Order to the Legislative Reference Bureau.
JOHN R. MCGINLEY, Jr.,
Chairperson[Pa.B. Doc. No. 96-2069. Filed for public inspection December 6, 1996, 9:00 a.m.]
