PROPOSED RULEMAKING
INSURANCE DEPARTMENT
[31 PA. CODE CH. 113]
Consent to Rate Filings
[29 Pa.B. 4446] The Insurance Department (Department) proposes to delete Chapter 113, Subchapter A (relating to consent to rate filings) to read as set forth in Annex A. The Department proposes the deletion under the authority of sections 206, 506, 1501 and 1502 of The Administrative Code of 1929 (71 P. S. §§ 66, 186, 411 and 412); and the Property and Casualty Filing Reform Act (40 P. S. §§ 710-1--710-19). Chapter 113, Subchapter A was promulgated under section 4(g) of The Casualty and Surety Rate Regulatory Act (40 P. S. § 1184(g)); and section 4(h) of The Fire, Marine and Inland Marine Rate Regulatory Act (40 P. S. § 1224(h)).
Purpose
The purpose of this proposed rulemaking is to delete Chapter 113, Subchapter A and eliminate obsolete and inconsistent regulations that serve no compelling interest. Under section 4(g) of The Casualty and Surety Rate Regulatory Act; and section 4(h) of The Fire, Marine and Inland Marine Rate Regulatory Act, insurance companies are permitted to charge a rate in excess of the approved rate for a specific policy. This activity is generally associated with risks for which there is difficulty locating coverage due to some unusual condition such as increased hazard. When insurance companies write a policy using the consent to rate provision, they are required to submit a filing to the Department using a ''consent to rate form.''
As a result of the Property and Casualty Filing Reform Act enacted in 1998, the consent to rate provision has been repealed for commercial insurance policies. The law allows insurance companies to use rates that deviate up to 25% above their approved rates without making a filing with the Department. Insurance companies can also use rates greater than 25%; however, the companies are then required to make an individual filing with the Department. The Property and Casualty Filing Reform Act made the consent to rate regulation obsolete and no longer necessary.
Fiscal Impact
The deletion of this subchapter will have minimal impact on the property and casualty insurance industry and the Department. Insurance companies that do business in this Commonwealth and write property and casualty insurance policies using the consent to rate provision will not be required to submit the consent to rate form to the Department, thereby saving both the companies and the Department any expense associated with preparing and filing the consent to rate form. Again, this fiscal impact is estimated to be very minimal due to the infrequent usage of this provision.
Paperwork
The deletion of this subchapter is expected to decrease paperwork requirements for the affected parties because the deletion eliminates unnecessary reporting requirements for the insurance industry.
Affected Parties
The deletion of this subchapter will affect all insurers who are licensed to sell property and casualty insurance in this Commonwealth.
Effectiveness/Sunset Date
The rulemaking will become effective upon final publication in the Pennsylvania Bulletin. Because the rulemaking proposes to delete obsolete regulations, 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, 1326 Strawberry Square, Harrisburg, PA 17120, within 30 days following the publication of this notice in the Pennsylvania Bulletin.
Questions or comments may also be e-mailed to psalvato@ins.state.pa.us or faxed to (717) 705-3873.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on August 10, 1999, the Department submitted a copy of this proposed rulemaking to the Independent Regulatory Review Commission (IRRC) and to the Chairpersons of the House Insurance Committee and the Senate Banking and Insurance Committee. In addition to the submitted proposed rulemaking, 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 objections to any portion of this proposed rulemaking, it will notify the Department within 10 days of the close of the Committee's review period. The notification shall specify the regulatory review criteria that have not been met by that portion. The Regulatory Review Act specifies detailed procedures for the Department, the Governor and the General Assembly to review these objections before final publication of the regulations.
M. DIANE KOKEN,
Insurance CommissionerFiscal Note: 11-194. No fiscal impact; (8) recommends adoption.
Annex A
TITLE 31. INSURANCE
PART VII. PROPERTY, FIRE, AND CASUALTY INSURANCE
CHAPTER 113. MISCELLANEOUS PROVISIONS
Subchapter A. [CONSENT TO RATE FILINGS] (Reserved) § 113.1. [Filing procedure.] (Reserved).
[(a) Consent to Rate filings shall be submitted by fire and casualty insurance companies in duplicate not later than 30 days after the date the insured signed.
(b) The filing shall indicate the company name and home office address and shall be signed by an officer or authorized filing representative.
(c) Filed and surcharged rates of the company for each coverage afforded shall be shown on the Consent to Rate form.]
§ 113.2. [Policy declaration.] (Reserved).
[(a) A copy of the policy declaration page shall accompany each Consent to Rate filing and charges shall be included in the premium shown on the policy declaration page.
(b) The copy of the declaration page shall be retained by the Insurance Department.]
§ 113.3. [Filings to meet statutory requirements.] (Reserved).
[(a) Consent to Rate filings shall meet statutory requirements of the insurance laws of the Commonwealth and shall be completed before being signed by the insured.
(b) The signing of blank forms by the insured may not be permitted.]
§ 113.4. [Filings by companies which have cancelled.] (Reserved).
[Consent to Rate forms shall indicate the name and address of the insurance company which has cancelled, not renewed or refused applicants insurance, and the Consent to Rate filings shall be justified by an individual inspection of the risk with a detailed written report and other pertinent information on which the excess rates are based. The material will be treated as confidential and returned to the company by the Insurance Department. ]
§ 113.5. [Commonwealth plans.] (Reserved).
[(a) The applicant shall be made aware of the Pennsylvania Fair Plan before submitting a fire Consent to Rate filing on his property.
(b) The applicant shall be made aware of the Pennsylvania Assigned Risk Insurance Plan before submitting a Consent to Rate filing.]
§ 113.6. [Ineligibility for surcharged rates.] (Reserved).
[Pennsylvania Uninsured Motorist Coverage is not eligible for surcharged rates.]
§ 113.7. [Maintenance of statistics.] (Reserved).
[Separate experience and expense statistics shall be maintained and submitted within 90 days after the end of each calendar year.]
§ 113.8. [Fire Consent to Rate filings.] (Reserved).
[Exhibits A, B, C and D attached hereto and made a part of this chapter are suggested forms for fire Consent to Rate filings.]
(Editor's Note: As part of this proposal, the Department is proposing to delete the text of Exhibits A--D which appear at 31 Pa. Code pages 113-3--113-7, serial pages (208687)--(208691).)
[EXHIBIT A] (Reserved)
[EXHIBIT B] (Reserved)
[EXHIBIT C] (Reserved)
[EXHIBIT D] (Reserved)
§ 113.9. [Automobile Consent to Rate filings.] (Reserved).
[Exhibits E, F and G attached hereto and made a part of this regulation are suggested forms for automobile Consent to Rate filings.]
(Editor's Note: As part of this proposal, the Department is proposing to delete the text of Exhibits E--G, which appears at 31 Pa. Code pages 113-8--113-11, serial pages (208692)--(208694) and (234361).)
[EXHIBIT E] (Reserved)
[EXHIBIT F] (Reserved)
[EXHIBIT G] (Reserved)
[Pa.B. Doc. No. 99-1371. Filed for public inspection August 20, 1999, 9:00 a.m.]
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