RULES AND REGULATIONS
[31 PA. CODE CH. 135]
Qualifications of Persons Signing Annual Financial Statements
[28 Pa.B. 3758] The Insurance Department (Department) hereby deletes Chapter 135 (relating to qualifications of persons signing Annual Financial Statements) to read as set forth in Annex A, under the authority of sections 206, 506, 1501 and 1502 of The Administrative Code of 1929 (71 P. S. §§ 66, 186, 411 and 412); section 301(g) of the Insurance Department Act of 1921 (40 P. S. § 71(g)); and section 320 of The Insurance Company Law of 1921 (act) (40 P. S. § 443). The regulations relate to the qualifications of persons signing annual financial statements for foreign and domestic life, accident and health insurance companies, associations, exchanges, fraternal benefit societies and beneficial societies.
Purpose
The purpose of the deletion of Chapter 135 is to eliminate obsolete, unnecessary regulations. Adopted in 1971, the regulations prescribe the qualifications required of an actuary who signs the annual financial statement filed with the Department by life and accident and health insurance companies, associations, exchanges, fraternal benefit societies and beneficial societies. The regulations require the signing actuary to: (1) be a member of the American Academy of Actuaries; or (2) have the educational background necessary for the practice of actuarial science with not less than 7 years of actuarial experience.
The requirements in the regulations are no longer used by the Department and duplicate existing statutory and regulatory authority. The Insurance Department Act of 1921 was amended in 1994 adding section 301(g) requiring a submission of an actuarial opinion of reserves for annual statements, beginning with the year 1993.
The current qualification requirements for actuaries signing annual statements with respect to life insurers and fraternal benefit societies (including accident and health insurance written by those insurers) are found in § 84b.5(b) (relating to general requirements) adopted December 10, 1994, under the authority of section 301(f) of The Insurance Department Act of 1921.
The current actuarial qualification requirements for financial statements filed by property and casualty insurers (including accident and health insurance written by property and casualty insurers) are contained in the instructions for completing annual financial statements. Section 320(a)(2) of the act requires insurers to adhere to the annual statement instructions adopted by the National Association of Insurance Commissioners (NAIC), in the absence of a contrary statute, regulation or order of the Insurance Commissioner. For uniformity, the Commonwealth has historically relied upon NAIC instructions and has not adopted any laws, regulations or orders governing this topic.
Both the annual statement instructions (governing property and casualty insurers) and § 84b.5(b) sufficiently address the credentials that an actuary must have to sign a financial statement. Chapter 135 in no manner enhances the authorizing statutes and regulations. Therefore, the regulations are outdated and redundant, and have been superseded by more recent regulations and requirements.
Statutory Authority
The regulations are being deleted under the authority of sections 206, 506, 1501 and 1502 of The Administrative Code of 1929; section 301(g) of the Insurance Department Act of 1921; and section 320 of the act (40 P. S. § 443). The regulations were adopted under the authority of section 320 of the act; section 28 of the act of July 17, 1935 (P. L. 1092, No. 357) (40 P. S. § 1078) (now repealed) relating to fraternal benefit societies; and section 7 of the act of June 4, 1937 (P. L. 1643, No. 342) (40 P. S. § 1107) (now repealed) relating to beneficial societies.
Comments
Notice of this deletion was published at 27 Pa.B. 2824 (June 14, 1997) as a proposed rulemaking with a 30-day public comment period.
No comments were received from the standing committees, industry trade associations or other parties during the 30-day public comment period. On August 13, 1997, the Independent Regulatory Review Commission (IRRC) submitted notice to the Department that IRRC had no objections, comments or suggestions to offer on the deletion of the regulations.
Fiscal Impact
The deletion of the regulations has no fiscal impact. Because of the redundant nature of the regulations to section 301(g) of The Insurance Department Act of 1921, Chapter 84b and section 320 of the act, the regulatory provisions remain in effect under existing statutes and regulations.
Paperwork
The deletion of the regulations will impose no additional paperwork requirements on the Department, life insurers or fraternal benefit societies.
Affected Parties
The deletion of the regulations is expected to have a minimal effect on life insurers and fraternal benefit societies because the regulations are outdated and have been superseded by statutory amendment and subsequently adopted regulations.
Effectiveness/Sunset Date
The rulemaking will become effective upon final publication in the Pennsylvania Bulletin. Because the rulemaking deletes obsolete, redundant regulations, no sunset date has been assigned.
Contact Person
Questions or comments regarding this final-form rulemaking may be addressed in writing to Peter J. Salvatore, Regulatory Coordinator, Office of Special Projects, 1326 Strawberry Square, Harrisburg, PA 17120, (717) 787-4429.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on June 3, 1997, the Department submitted a copy of the proposed deletion to IRRC, the Chairpersons of the House Insurance Committee and the Senate Banking and Insurance Committee. In addition to the submitted final-form regulations, 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 the material is available to the public upon request.
These final-form regulations were deemed approved by the House Committee on June 21, 1998, and deemed approved by the Senate Committee on June 21, 1998. IRRC met on July 9, 1998, and deemed approved the deletion in accordance with section 5.1(d) of the Regulatory Review Act (71 P. S. § 745.5a(d)). IRRC met on July 9, 1998, and deemed approved the deletion in accordance with section 5.1(e) of the Regulatory Review Act.
Findings
The Commissioner finds that:
(1) Public notice of intention to adopt this rulemaking as amended by this order has been given under sections 201 and 202 of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. §§ 1201 and 1202) and the regulations thereunder, 1 Pa Code §§ 7.1 and 7.2.
(2) The adoption of this rulemaking in the manner provided in this order is necessary and appropriate for the administration and enforcement of the authorizing statutes.
Order
The Commissioner acting under the authorizing statutes, orders that:
(a) The regulations of the Department, 31 Pa. Code, are amended by deleting §§ 135.1 and 135.2 to read as set forth in Annex A.
(b) The Commissioner shall submit this order and Annex A to the Office of General Counsel and Office of Attorney General for approval as to form and legality as required by law.
(c) The Commissioner shall certify this order and Annex A and deposit them with the Legislative Reference Bureau as required by law.
(d) The regulations repealed by this order shall be abolished upon publication in the Pennsylvania Bulletin.
M. DIANE KOKEN,
Insurance Commissioner(Editor's Note: For the text of the order of the Independent Regulatory Review Commission relating to this document, see 28 Pa.B. 3558 (July 25, 1998).)
Fiscal Note: Fiscal Note 11-159 remains valid for the final adoption of the subject regulations.
Annex A
TITLE 31. INSURANCE
PART VIII. MISCELLANEOUS PROVISIONS
CHAPTER 135. (Reserved) § 135.1 (Reserved).
§ 135.2 (Reserved).
[Pa.B. Doc. No. 98-1269. Filed for public inspection August 7, 1998, 9:00 a.m.]
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