NOTICES
Deregulation of Life Insurance Forms
[26 Pa.B. 4147] The Insurance Commissioner hereby deregulates certain life insurance and annuity forms, as authorized by section 354 of The Insurance Company Law of 1921 (40 P. S. § 477b) and by sections 404(f) and 615 of the Fraternal Benefit Societies Code (40 P. S. §§ 1142-404(f) and 1142-615), as set forth in Annex A.
Statutory Authority
Section 354 of The Insurance Company Law of 1921 (40 P. S. § 477b) requires that all policy forms for life insurance and annuities, and other lines of business, be submitted to the Insurance Commissioner for prior approval before issuance to any consumer in the Commonwealth. However, that law gives the Commissioner express authority to exempt forms from the prior approval requirement. The review and approval of such forms issued by Fraternal Benefit Societies is governed by 40 P. S. § 1142-404(f), which provides that such forms shall be filed in the manner provided for like policies issued by life, accident and health insurers under section 354. Accordingly, the Commissioner hereby exempts from filing or prior approval the forms for the lines of business listed in Annex A.
Insurers Subject to the Filing Requirement
Section 354 applies to insurance companies, associations and exchanges, which terms are defined at section 101 of The Insurance Company Law (40 P. S. § 361). Additionally, the Fraternal Benefit Societies Code (40 P. S. § 1142-101-702) incorporates by reference the general provision laws, including section 354, that relate to the review and approval of policy forms. Therefore, this notice of deregulation of life and annuity forms also applies to fraternal benefit societies. Section 354 does not regulate the approval of Credit Insurance forms and, therefore, these are not affected by the deregulation herein.
Forms Which Are Not Deregulated
The Commissioner's action to deregulate certain group forms does not extend to the following:
Group universal and group variable life policies and certificates and all riders, amendments, endorsements and applications used with them;
Individual retirement annuity (IRA) group annuity policies and certificates and all riders, amendments, endorsements and applications used with them;
Synthetic guaranteed investment contracts and certificates and all riders, amendments, endorsements and applications used with them; and
Group annuity policies issued to policyholders other than employers, trustees of employer funds, labor unions, police fraternities, firemen's fraternities, teachers' associations or federations, multiple employer trusts, labor union trusts, association trusts, associations, or trustees of collective trusts. All certificates, riders, amendments, endorsements and applications used with the aforementioned group annuity policies.
Forms which include both regulated and deregulated lines of business must continue to be submitted for prior approval.
Continuing Authority of the Commissioner
Notwithstanding the implementation of this notice, the Commissioner will retain complete authority to request and be provided a copy of any form being issued in this Commonwealth, as provided by section 903 of The Insurance Department Act of 1921 (40 P. S. § 323.1 et seq.).
The Commissioner also will retain complete authority to reassume regulatory authority over the types of forms deregulated hereunder at her discretion.
Section 354 of The Insurance Company Law of 1921 (40 P. S. § 477b) does not regulate guaranteed investment contracts without annuity provisions and funding agreement contracts without annuity provisions. However, section 202 of The Insurance Company Law of 1921 (40 P. S. § 382) does not authorize life insurance companies to issue such contracts in the Commonwealth.
Notwithstanding the deregulation of the forms specified herein, all such forms must continue to comply with applicable Pennsylvania law including, but not limited to:
Uniform Policy Provisions (40 P. S. § 510)
Standard Nonforfeiture Law for Life Insurance (40 P. S. § 510.1)
Group Life Insurance Act (40 P. S. § 532.1 et seq.) Fraternal Benefit Societies Code (40 P. S. § 1142-401 through 405.)
Effective Date
This deregulation action is effective as of September 1, 1996.
Questions
Questions concerning this notice may be directed to Sally Engle, Director, Bureau of Life Insurance, Insurance Department, 1311 Strawberry Square, Harrisburg, PA 17120, (717) 787-4192.
Annex A Deregulated Life Insurance and Annuity Forms
The Insurance Commissioner, by this notice, hereby deregulates the following lines of business under the authority of section 354 of The Insurance Company Law of 1921 (40 P. S. § 447b), effective September 1, 1996.
1) Individual Traditional Term Life policies (not including indeterminate premium, limited benefit,1 modified premium2 or single premium term life policies).
2) Individual Traditional Whole Life policies (not including interest sensitive, indeterminate premium, limited benefit1 or modified premium2 whole life policies).
3) Individual Traditional Endowment policies (not including interest sensitive, indeterminate premium or modified premium2 endowment policies).
4) Individual Traditional Term Life riders (not including indeterminate premium, limited benefit1 or modified premium2 term life riders).
5) Individual Traditional Cost of Living, Guaranteed Purchase Option, Spouse Term, Child Term, Family Term, Other Insured, Dividend Additions, Business Exchange and Substitute Insured riders.
6) Individual Fixed Immediate Annuity policies, not including policies with market value adjustment or providing payments of interest only, and all riders, amendments and endorsements used with them.
7) Individual Annuity applications, except individual variable annuity applications.
8) Group Term Life policies and certificates. All riders, amendments, endorsements and applications used with them.
9) Group Whole Life policies and certificates (not including Universal Life policies and certificates). All riders, amendments, endorsements and applications used with them.
10) Group Annuity policies issued to employers, trustees of employer funds, labor unions, police fraternities, firemen's fraternities, teachers' associations or federations, multiple employer trusts, labor union trusts, association trusts, associations, or trustees of collective trusts. All certificates, riders, amendments, endorsements and applications used with them.
LINDA S. KAISER,
Insurance Commissioner
[Pa.B. Doc. No. 96-1406. Filed for public inspection August 23, 1996, 9:00 a.m.] _______
1 Limited life insurance policies are defined at 31 Pa. Code § 87.12.
2 Modified premium life insurance policies are defined at 31 Pa. Code § 87.13.
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