INSURANCE DEPARTMENT [31 PA. CODE CHS. 89 AND 89a] Policies and Forms; General Filing Requirements and General Contents of Forms [30 Pa.B. 4623] The Insurance Department (Department) proposes to amend Chapter 89 (relating to general filing requirements and general contents of forms), and adopt Chapter 89a (relating to approval for life insurance, accident and health insurance and property and casualty insurance filing and form) to read as set forth in Annex A. This rulemaking is proposed under the authority contained in sections 206, 506, 1501 and 1502 of The Administrative Code of 1929 (71 P. S. §§ 66, 186, 411 and 412); sections 510--514 of The Insurance Company Law of 1921 (40 P. S. §§ 510--514), and section 3(a) of the Accident and Health Filing Reform Act (40 P. S. § 3803(a)).
Purpose
Chapter 89 was adopted in 1969. This chapter was intended to provide filing and content requirements for life and accident and health insurance forms to insurers doing business in this Commonwealth. These requirements are necessary to assure the consistent and complete filing of forms by insurers.
The Department is proposing to establish Chapter 89a to improve readability. These new sections of Chapter 89a set forth the requirements for the content and filing of life insurance and annuities, accident and health insurance and property and casualty insurance form filings. In addition, requirements for annuities and property and casualty insurance and provisions to allow for filings by means of the Internet or electronically were also incorporated in Chapter 89a. This will ensure the consistent application of filing requirements across all product lines filed with the Department. The Department is also revising these regulations to respond to changes in the insurance marketplace.
Explanation of Regulatory Requirements
Section 89.3 (relating to filing requirements) is being proposed for deletion. Portions of 89.3 will be incorporated in new § 89a.3 (relating to filing requirement).
Section 89.4 (relating to general filing procedures) is being proposed for deletion. Portions of 89.4 will be incorporated into new § 89a.4 (relating to general filing procedure).
Section 89.5 (relating to letter of submission) is being proposed for deletion. Portions of 89.5 will be incorporated into new § 89a.5 (relating to letter of submission).
Section 89.11 (relating to general contents of forms) is being proposed for deletion. Portions of 89.11 will be incorporated into new § 89a.6 (relating to general contents of forms).
Section 89.17 (relating to replacement of forms) is being proposed for deletion because it is not necessary for companies to inform the Department that a form or filing is obsolete or no longer being issued.
Section 89.21 (relating to general) is being proposed for deletion because tentative approval of filings is no longer necessary. Parts of § 89.21 are being incorporated into new § 89a.4 (relating to general filing procedure).
Section 89.22 (relating to changes in forms) is being proposed for deletion because the section is obsolete and no longer applicable to the review of form filings by the Department.
Section 89.23 (relating to documents shall be complete) is being proposed for deletion.
Section 89a.1 (relating to definitions) sets forth the definitions to be utilized in the chapter. Two definitions have been added to the subsection, which were not in § 89.1 to bring the regulations up-to-date with current market conditions and activities. ''Filer'' has been added to clarify the entity submitting forms to the Department. ''Prominent type'' has been added for clarification of certain form content requirements.
Section 89a.2 (relating to purpose) establishes the purpose of the chapter.
Section 89a.3 (relating to form filings) is being proposed to include annuities and property and casualty insurance forms to the requirements of the chapter as well as previous language contained in § 89.3. Section 89a.3(b) contains language that was previously found in § 89.4(c).
Section 89a.4 (relating to general filing procedure) includes the requirements found previously in § 89.4 and establishes the specific filing procedures and requirements that need to be followed. Section 89a.4(a) now allows for the filing of forms by means of the Internet and other electronic mediums and sets forth the specific filing requirements for this method of filing forms.
Section 89a.5 (relating to letter of submission) includes the requirements found previously in § 89.5 and establishes the specific filing procedures and requirements being used by the Department for letter of submissions.
Section 89a.6 (relating to general contents of forms) includes the requirements found previously in §§ 89.11 and 89.17 and establishes the specific form contents and requirements necessary for review by the Department. Section 89a.6 also has a readability section added. This section is being added because the readability issue is a consumer protection.
Affected Parties
Insurance companies transacting business in this Commonwealth who must follow the Department's form and content requirements of form filings will be affected by the proposed rulemaking.
Fiscal Impact
State Government
The proposal will not have an impact on Department costs associated with monitoring industry compliance because this does not represent a major change from current policy.
General Public
The proposal is not expected to have any cost impact on premiums paid by consumers for insurance policies.
Political Subdivisions
The proposal has no impact on costs to political subdivisions.
Private Sector
The proposal will not have any major impact on private sector costs because this does not represent a major change from current policy.
Paperwork
This proposal imposes no additional paperwork requirements on the Department and modifies the paperwork requirements imposed on the insurance industry.
Effectiveness/Sunset Date
The proposal will become effective upon final adoption and publication in the Pennsylvania Bulletin as final rulemaking. 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, Pennsylvania Insurance Department, 1326 Strawberry Square, Harrisburg, PA 17120, within 30 days following the publication of this notice in the Pennsylvania Bulletin. Questions and comments may also be e-mailed to psalvato@ins.state.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 August 23, 2000, the Department submitted a copy of this proposal to the Independent Regulatory Review Commission (IRRC) and to the Chairpersons of the Senate Banking and Insurance Committee and the House Insurance Committee. In addition to the submitted proposal, 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.'' A copy of that material is available to the public upon request.
If IRRC has any 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 (71 P. S. §§ 745.1--745.14) specifies detailed procedures for the agency, the Governor and the General Assembly to review these objections before final publication of the regulations.
M. DIANE KOKEN,
Insurance CommissionerFiscal Note: 11-184. No fiscal impact; (8) recommends adoption.
Annex A TITLE 31. INSURANCE PART IV. LIFE INSURANCE CHAPTER 89. APPROVAL OF LIFE, ACCIDENT AND HEALTH INSURANCE Subchapter A. REQUIREMENTS FOR ALL POLICIES AND FORMS GENERAL PROVISIONS § 89.1. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
* * * * * Advertisement--[Printed or audio visual material used in newspapers, magazines, on radio or television, billboards or similar displays; descriptive literature or sales items, including but not limited to, circulars, leaflets, booklets, depictions, illustrations and form letters; prepared sales talks, presentations or material for use by agents or brokers and representations made by an agent or broker in connection therewith.] As defined in § 51.1 (relating to definitions).
* * * * * § 89.3. [Filing requirement] (Reserved).
[(a) Policies, contracts, certificates, endorsements, riders, applications and related forms for life, accident and health insurance shall, prior to their use in this Commonwealth, be submitted to and formally approved by the Department for filing or approval, unless specifically excepted under section 354 of the act (40 P. S. § 477(b)).
(b) The filing letter accompanying a document which deviates from the guidelines in this chapter shall call attention to the deviation and explain how it meets the applicable requirements of the insurance laws of the Commonwealth.
(c) The submission of the documents shall be directed to the Director, Bureau of Regulation of Rates and Policies, Insurance Department, Harrisburg, Pennsylvania 17120.]
§ 89.4. [General filing procedure] (Reserved).
[(a) Number of copies. Policies and related forms being submitted for either tentative or formal approval shall be submitted in duplicate. One copy will be retained by the Department in its files and the other copy will be returned to the insurer with the action taken by the Department noted thereon.
(b) By whom submitted. Submissions should be made by the home office of the company, association, exchange or society rather than by local representatives, bureaus, company, associations or conferences, except if other arrangements have been specially made with and agreed to by the Department. Correspondence from the Department relating thereto and approvals or disapprovals of the submissions will be mailed to the home office of the company, association, exchange or society.
(c) Out-of-State delivery. Where other jurisdictions require prior review by the Department, a single copy of each form (in duplicate for a group accident and health form) which is to be issued by a domestic insurer for delivery only outside of this Commonwealth, or to be used with policies or contracts delivered outside of this Commonwealth, may be filed with the Department.
(d) Tentative approval. In order that a form may be given due consideration and defects therein pointed out and corrected before it is printed for formal submission, an insurer may submit printer's proofs of the form in two copies for tentative approval. If other than printer's proofs are submitted, the copies shall be clearly legible. Typewritten copies or copies prepared by a legible duplicating process may be submitted for documents to be used in connection only with single cases or when their use will be too infrequent to justify other preparation.]
§ 89.5. [Letter of submission] (Reserved).
[The letter of submission shall be in duplicate, signed by a representative of the company authorized to submit forms for filing or approval, and shall contain at least all of the following information:
(1) The identifying form number of each form submitted. If the form is for a document other than a policy or contract, the form number of the policy or contract form or forms with which it will be used shall be indicated or, if for more general use, the type or group of the forms shall be described.
(2) A brief statement of the coverage provided. If the form is a policy or contract submitted for approval, there shall be a statement appropriately identifying the specific type of coverage provided.
(3) If the form contains provisions, conditions or concepts which depart from those generally used by the industry and which could be construed as uncommon or unusual, there shall be a statement to this effect which will point out the specific purpose and use of the form, provision, condition or concept.
(4) If the form is a new one, not replacing an existing form, a statement to that effect.
(5) If the form is intended to supersede another approved or filed form, the form number of the approved or filed form which is to be superseded, the approval date of the form superseded and a statement of the material changes made. If the previous form has not yet been formally acted upon by the Department, the form number and submission date shall be given.
(6) If the form being filed for formal approval has previously been submitted for preliminary review, a reference to the previous submission and a statement setting out either that the formal filing agrees precisely with the previous submission, or the specific changes made in the form since the time of preliminary review.
(7) If a form is intended to replace a very recently approved form because of an error found in the approved form, the insurer shall, if the approved form has not been issued, return the approved form with a statement in the submission letter that the form has not been issued. The insurer may, under these circumstances, use the same form number on the submitted corrected form. If, however, the form has been issued, the insurer shall place a new form number on the corrected form and need not return the previously approved form.
(8) A statement as to whether the form has been approved or authorized for use by the insurance department of the state of domicile of the insurer or that the form is not to be used in such state. If approval or authorization for use was sought but not granted, the reason for the action should be stated. This paragraph does not apply to group insurance.]
PREPARATION OF FORMS § 89.11. [General contents of forms] (Reserved).
[(a) Title and address. A policy form shall recite the full corporate or legal title of the company, association, exchange or society. The official home office address (city and state or province) shall appear on the face, on the back or on the specifications page. If administrative offices are maintained elsewhere, the other addresses may also be shown. For filing purposes, other forms filed should be identified with the name of the company by rubber stamp or other appropriate means.
(b) Form number. A form shall be designated by a suitable form number which may consist of numbers or letters, or both, and which shall appear in the lower left corner of the first page. The form number should be adequate to distinguish the form in question from others used by the insurer without reference to edition or printing date. The fact that various benefits are included in the policy by rider need not be reflected in the policy form number.
(c) Hypothetical data. Blank spaces of each policy form, except an application, shall be filled in and completed with hypothetical data to indicate the purpose and use of the form. In individual life insurance cases, it is suggested that forms be filled in as of age 35, except for forms to be used to insure juveniles, in which case the use of age 10 is suggested.
(d) Description of policy. A brief description of the nature of the policy shall be printed at the top or bottom of the first page of the policy and on the filing back, if any, or on the specifications page (where window-type policies or policies in booklet form are used). In the case of policies in booklet form, the plastic cover, if bulky, need not be filed. A statement shall be included in the brief description indicating whether the policy is participating or nonparticipating.]
§ 89.17. [Replacement of forms] (Reserved).
[(a) A new filing which replaces a form previously approved shall state the form number of the form or forms to be replaced in each case.
(b) If an approved form or filing becomes obsolete and is no longer being issued, the insurer shall so inform the Department.]
§ 89.18. Miscellaneous requirements.
(a) [Marketing procedures. If a form is submitted involving a method of marketing which departs from the direct agent approach or which employs a new concept, a complete explanation of the marketing procedures shall be provided, if requested by the Department.
(b) Countersignature of agent. In submitting forms to the Department, consideration should be given to sections 501 and 610 of the act (40 P. S. §§ 631 and 730), which provide for the countersignature of an authorized resident agent for insurers not incorporated or organized under the laws of the Commonwealth but authorized to transact business herein. It shall be necessary to provide in the forms, when required by law, for the countersignature of the authorized resident agent or to explain its omission fully.
(c)] ***
[(d)] (b) ***
FORMAL APPROVAL § 89.21. [General] (Reserved).
[(a) Policy forms may be submitted for formal approval either after or without tentative approval.
(b) Policy forms submitted for formal approval should be submitted in the form intended for actual issue, generally, in printed form. If a policy form will not be printed, as in cases of single or infrequent use, it is important that the form, when reproduced, be clear and legible and in reasonably permanent form considering its probable period of use.]
§ 89.22. [Changes in forms] (Reserved).
[The Department may not consider for formal approval a form which has been modified by typewritten, ink or other insertions or deletions. The changes should be made by printed, multigraph or rubber stamp endorsement properly executed by an authorized representative of the company.]
§ 89.23. [Documents shall be complete] (Reserved).
[The Department is concerned with complete policies, endorsements, certificates, applications and related forms. If amendatory pages are submitted, the pages shall be properly executed as such. Otherwise, the complete revised form including the amendments shall be submitted with distinguishing form number.]
(Editor's Note: The following text is proposed to be added and is being printed in regular type to enhance readability.)
CHAPTER 89a. APPROVAL FOR LIFE INSURANCE, ACCIDENT AND HEALTH INSURANCE AND PROPERTY AND CASUALTY INSURANCE FILING AND FORM GENERAL FILING PROVISIONS
Sec.
89a.1. Definitions. 89a.2. Purpose. 89a.3. Form filings. 89a.4. General filing procedure. 89a.5. Letter of submission. PREPARATION OF FORMS
89a.6. General contents of forms. GENERAL FILING PROVISIONS § 89a.1. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
Department--The Insurance Department of the Commonwealth.
Filer--A person or entity submitting insurance or annuity forms to the Department.
Prominent type--Font or formatting techniques which differentiate selected text from other text. The term includes, for example, capital letters, contrasting color and underscoring.
§ 89a.2. Purpose.
This chapter provides the criteria for insurers to use in preparing specific form filings for Department review. Additionally, the chapter provides requirements for the general content of forms.
§ 89a.3. Form filings.
(a) Submission of forms. Policies, contracts, certificates, endorsements, riders, applications and related forms for life insurance and annuities, accident and health insurance, and property and casualty insurance, intended to be issued in this Commonwealth, shall be submitted to the Department in accordance with the following:
(1) Forms for life insurance and annuities issued by insurance companies shall be submitted for prior approval in accordance with section 354 of The Insurance Company Law of 1921 (40 P. S. § 477b), unless specifically excepted under section 354 of The Insurance Company Law of 1921. Forms for life insurance and annuities issued by fraternal benefit societies shall be submitted for prior approval in accordance with section 404(f) of the Fraternal Benefit Societies Code (40 P. S. § 1142-404(f)), unless specifically excepted under section 354 of The Insurance Company Law of 1921.
(2) Forms for accident and health insurance shall be filed in accordance with section 3 of the Accident and Health Filing Reform Act (40 P. S. § 3803).
(3) Forms for property and casualty insurance shall be submitted for prior approval in accordance with section 354 of The Insurance Company Law of 1921 unless specifically excepted under section 354 of The Insurance Company Law of 1921.
(b) Out-of-State delivery. When other jurisdictions require prior approval or filing by the Department of forms to be issued in those jurisdictions by domestic Pennsylvania insurers, the insurers may submit the forms to the Department for approval or filing for issuance outside of this Commonwealth only.
§ 89a.4. General filing procedure.
(a) Number of copies.
(1) Forms intended to be issued in this Commonwealth shall be submitted in duplicate for hard copy filings. Filers submitting forms by means of the Internet or other electronic medium shall submit one electronic copy. One copy of each form may be retained by the Department.
(2) One copy of a form intended to be issued only outside this Commonwealth shall be submitted.
(b) Clearly legible forms. Forms intended to be issued in this Commonwealth shall be submitted in clearly legible form.
(c) Filing fee. A submission of forms shall include any filing fee as required by section 212 of The Insurance Department Act of 1921 (40 P. S. § 50).
(d) Self-addressed stamped return envelope. A hard copy submission of forms shall include a self-addressed envelope bearing enough postage to permit the return to the filer of the duplicate copies of the forms or submission letter, or both.
(e) Separate submissions. Forms for each line of insurance, life and annuities, accident and health, and property and casualty, shall be submitted separately to their respective bureaus within the Department: the Bureau of Life Insurance, the Bureau of Accident and Health Insurance, and the Bureau of Property and Casualty Insurance.
(f) By whom submitted. A submission of forms shall be made by the home office or an administrative office of the insurer, or by an attorney at law representing the insurer, unless the following applies:
(1) The submission includes, or is preceded by, a document from the insurer specifically authorizing the filer to make the submission on the insurer's behalf.
(2) The submission is made by a rating organization, licensed in this Commonwealth, on behalf of its members and subscriber companies.
§ 89a.5. Letter of submission.
The letter of submission shall be in duplicate for hard copy filings, shall clearly identify the insurer whose name appears on the forms, and shall be sent to the appropriate bureau director in the Office of Rate and Policy Regulation under the requirements of § 89a.4(e) (relating to general filing procedure). Only one copy of the letter of submission is necessary for Internet or other electronic submissions. The letter shall contain at least all of the following information for each form submitted:
(1) The identifying form number. Additionally, if the form is other than a policy, contract or certificate, the form number of the policy, contract or certificate with which it will be used, and the date approved by or filed with the Department, or if not approved or filed, the date last submitted to the Department, or if for more general use, the type or group of the forms shall be described. If the form is a group certificate, the form number of the group master policy with which it will be used, and the date the group master policy was approved by or filed with the Department, or if not approved or filed, the date last submitted to the Department, or if the certificate is for general use, the types of group master policies with which it will be used.
(2) A designation of the general type of form submitted; for example, policy, contract, certificate, rider, endorsement, amendment, agreement, application, insert page or other general type.
(3) A brief statement of the specific type of insurance or annuity benefit coverage provided by the form. If the form does not provide insurance or annuity benefit coverage, a brief statement of the specific purpose of the form.
(4) If the form contains any provision, condition, feature or concept that departs from those generally used by the industry and that could be construed as new, innovative, uncommon or unusual, a statement to this effect and an explanation of the specific purpose of the provision, condition, feature or concept.
(5) An explanation of the marketing method, if the method of marketing of the form departs from the direct sales approach or employs a new concept.
(6) If the form is a new one, not replacing an existing form, a statement to that effect.
(7) If the form is intended to replace another form, the form number of the form to be replaced, the date that the form was approved by or filed with the Department, and a statement of the changes made to the form to be replaced.
(8) For group insurance policy forms, a brief description of the type of entity to which the group policy will be issued; for example, discretionary group, association, out-of-State trust.
(9) The amount of the filing fee included with the submission or the amount that will be billed to the insurer.
PREPARATION OF FORMS § 89a.6. General contents of forms.
(a) Name and address. Each form shall state the full corporate or legal name of the company, association, exchange or society. However, the name need appear for filing purposes only on a rider, endorsement, amendment, agreement or insert page. If added for filing purposes only, the name may be added by any legible means. If more than one insurer is using an application, a multicompany application providing for the designation of the applicable insurer and available coverages, if applicable, may be used. A policy, contract or fraternal certificate shall state a current address for the insurer, consisting of at least a city and state or province.
(b) Form number. Each form shall contain a form number consisting of numbers, letters, or both. The form number shall be adequate to distinguish the form from all others used by the insurer. The form number may be the same as that of a form to be replaced. However, if the form to be replaced was approved by or filed with the Department, it may not have been issued in this Commonwealth and shall be withdrawn from any issuance in this Commonwealth.
(c) Description or caption. Each form, except an insert page, shall contain a brief description or descriptive caption. This brief description or descriptive caption shall appear in prominent type on the first or cover page of the form, or, in the case of a policy, contract or certificate, on the specifications page if the brief description or descriptive caption is visible without opening the form. The brief description or descriptive caption shall contain at least the following information:
(1) A designation of the general type of the form, that is, policy, contract, certificate, rider, endorsement, amendment, agreement, application or other general type.
(2) A designation of the specific type of insurance or annuity coverage provided, or if the form does not provide insurance or annuity coverage, a designation of the purpose of the form.
(3) If the form is a policy, contract or certificate, an indication of whether the form is participating or nonparticipating.
(d) Required statement. A rider, endorsement, amendment or agreement designated by another term in its brief description or descriptive caption shall state that it is ''attached to and made part of the (policy, contract or certificate),'' as appropriate.
(e) Hypothetical data. The blank spaces of each form, except an application, shall be filled in with hypothetical data to indicate the purpose of the form. This data shall be realistic and consistent with the other contents of the form.
(f) Readability. A form:
(1) Shall be written in simple words and with sentences as short as possible. The words and sentences should convey meanings clearly and directly. Words should be used in their commonly understood senses.
(2) Shall contain a definition or explanation of terminology that would not be ordinarily understood by a person of average intelligence.
(3) May not contain inconsistent or contradictory language or provisions.
(4) That provides insurance coverage, shall accurately and completely explain the coverage and conditions of coverage.
[Pa.B. Doc. No. 00-1507. Filed for public inspection September 1, 2000, 9:00 a.m.]
