NOTICES
Flood Insurance: Pennsylvania Insurance Agents' Responsibilities; Notice 1997-1
[27 Pa.B. 687] During the past year, the Insurance Department staffed 38 Disaster Recovery Centers across the State to assist Pennsylvanians affected by the record-setting nine disasters declared in 1996.
Time and again, Department personnel were informed by Commonwealth residents that their insurance agent had told them that ''flood insurance is not available'' or ''you don't qualify for flood insurance.'' In reliance upon this advice, some consumers did not purchase flood protection and, regrettably, suffered severe financial consequences once disaster struck.
In the event an agent misrepresents the availability of or eligibility for flood insurance, the Insurance Commissioner may find that this activity violates The Unfair Insurance Practices Act (40 P. S. §§ 1171.1--1171.15) which prohibits persons from making an untrue, deceptive or misleading statement regarding the business of insurance. In addition, the Commissioner may make other findings, including that agents who make false statements regarding the availability of or eligibility for flood insurance coverage no longer meet the competency requirement for licensure (40 P. S. § 234); 31 Pa. Code §§ 37.46 and 37.47 (relating to standards for denial of certificate/license; and revocation, suspension, nonrenewal of certificates and licenses).
After an administrative enforcement hearing is held, if the Commissioner finds a violation of law has occurred, the Commissioner may impose sanctions against the violator. Available sanctions include the issuance of a cease and desist order; suspension, revocation or refusal to renew the agent's certificate of qualification; or imposition of a civil penalty of $1,000 for each and every violation (40 P. S. §§ 279, 1171.9 and 1171.11).
Agents are expected to be familiar with the National Flood Insurance Program, and the eligibility criteria under that program. In addition, some companies participate in the Write-Your-Own Program, and agents for such companies are expected to be familiar with such program. Agents are also expected to be familiar with the limits and exclusions which apply to flood insurance, and to respond accurately to consumer inquiries about risk mitigation techniques which could be employed in light of such limits and exclusions. The Department also encourages knowledgeable agents to assist their customers in considering the purchase of any necessary flood insurance during the assessment of the consumer's overall insurance and risk protection needs.
The Department encourages agents to attend courses on flood insurance. During the past year, the National Flood Insurance Program offered several free seminars throughout the Commonwealth for agents to learn more about the program. To assist this effort, the vendor which manages the Department's continuing education program (Insurance Testing Corporation) has made it possible for the National Flood Insurance Program to offer continuing education credits for these seminars by waiving the candidate reporting fees.
The Insurance Department will diligently investigate allegations that an agent has misinformed a consumer about the availability of or eligibility for flood insurance. If such investigation reveals a violation of law, the violator will face appropriate enforcement action by this Department.
Questions concerning the information in this notice may be directed to Carolyn Montgomery, Director, Bureau of Consumer Services, 1321 Strawberry Square, Harrisburg, PA 17120, (717) 783-2153.
LINDA S. KAISER,
Insurance Commissioner
[Pa.B. Doc. No. 97-160. Filed for public inspection January 31, 1997, 9:00 a.m.]
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