Section 3774. Manner of Initiating Article V Proceedings

(a) Judicial review of summary orders (Section 510 of Article V, 40 P. S. § 221.10). A request for judicial review of a summary order issued by the Commissioner shall be presented by petition for review and shall conform to the provisions of Chapter 15 of the Pennsylvania Rules of Appellate Procedure applicable to matters in the Court’s original jurisdiction.

(b) Court’s seizure order (Section 512 of Article V, 40 P. S. § 221.12). A petition by the Commissioner for a seizure order shall state the material facts that constitute the grounds for relief. The petition for seizure may be decided with or without an answer or a hearing. An insurer may petition the Court for hearing and review of an ex parte seizure order at any time and shall set forth the factual and legal basis in support of a contention that the Court should vacate or modify the seizure order. The Court may set a time for the Commissioner to file an answer, but in any event the Court shall decide the petition for hearing and review in accordance with Sections 512(d) and 513(a), (b), 40 P. S. § § 221.12(d) and 221.13(a), (b).

(c) Formal proceedings to commence rehabilitation or liquidation (Sections 515 and 520 of Article V, 40 P. S. § § 221.15 and 221.20).

(1) A petition by the Commissioner for rehabilitation or liquidation shall state the material facts that constitute the grounds for relief.

(2) Unless the Court otherwise orders, within thirty (30) days of the filing of a petition for rehabilitation or a petition for liquidation, the insurer shall file either an answer to the petition or consent to the entry of an order granting the relief the Commissioner seeks in the petition. An answer shall state the material facts that constitute a defense to the petition. No other response by the insurer is permitted.

(3) Following the entry of an order to rehabilitate or liquidate the business of an insurer, the Court may enter a case management order to supplement these Rules.

Official Note

Special forms of petition—A petition by the Commissioner for a seizure order or a petition by the Commissioner for an order of rehabilitation or liquidation is not a petition for review governed by Chapter 15 of the Appellate Rules because neither of these petitions present a challenge to government action. The term ‘‘petition’’ is used because it is used in Article V.

For determining a petition for a seizure order, Section 512 establishes a process that does not conform to the provisions of Chapter 15. Such a petition should be decided in accordance with the statutory process in conjunction with an order.

Rules 3771—3784 establish procedures for addressing petitions for rehabilitation or liquidation and matters associated with rehabilitation or liquidation of an insurer.

A petition by an insurer for hearing and review of a seizure order presents a matter properly addressed to the Court’s original jurisdiction. See 42 Pa.C.S. § 761 (establishing the Court’s original jurisdiction over all matters arising under Article V of the Insurance Department Act). However, the provisions of Chapter 15 applicable to original jurisdiction matters have little or no practical applicability to a petition for a hearing and review of an ex parte seizure order for which Section 512 confers upon the petitioner a right to a hearing within ten days. Consequently, a petition for hearing and review of a seizure order should be decided in accordance with the statutory process in Section 512 or Court order.

The special forms of petition named in Rule 3774 (initiating Article V proceedings) are not subject to the Rules of Civil Procedure.

The provisions of this Rule 3774 adopted June 8, 2012, effective July 30, 2012, 42 Pa.B. 3569.