RULES AND REGULATIONS
Title 31--INSURANCE
INSURANCE DEPARTMENT
[31 PA. CODE CH. 65]
Collision Loss Settlements
[29 Pa.B. 4864] The Insurance Department (Department) hereby deletes §§ 65.11--65.14 to read as set forth in Annex A. The Department is publishing this deletion as a final-form rulemaking. The Department's authority is found in sections 206, 506, 1501 and 1502 of The Administrative Code of 1929 (71 P. S. §§ 66, 186, 411 and 412), and the act of June 17, 1998 (P. L. 464, No. 68) (40 P. S. §§ 991.2001--991.2013) (Act 68) (formerly the act of June 5, 1968 (P. L. 140, No. 78)), relating to the cancellation, refusal to renew and refusal to write private passenger automobile insurance policies. The regulations required an insurer to use actual cash value with certain adjustments as the standard for settling collision losses.
Purpose
The purpose of this rulemaking is to delete §§ 65.11--65.14, to eliminate outdated regulations that do not serve any compelling public purpose. The regulations were adopted May 5, 1970, under the authority of former Act 78. Under the standard automobile collision loss insurance policy the insurer contracts to pay the insured the ''actual cash value'' of the insured's automobile at the time of a total loss by the insured. The regulations reiterate that the standard for settling collision losses is actual cash value and requires insurers to adjust the book value of an automobile on the basis of fair market value plus the State sales tax on the cost of a replacement vehicle. The regulations further define the term actual cash value as the cost of repairing or replacing the damaged property with other property of like kind and quality in the same physical condition, commonly known as replacement cost less depreciation.
After careful review, the Department is deleting the regulations because they are no longer necessary. Collision loss settlements are covered more comprehensively in Chapter 62 (relating to motor vehicle physical damage appraisers) (physical damage appraisers), adopted December 28, 1973. The subject regulations duplicate the requirements in § 62.3, which establishes standards to be used to determine replacement value under the insurance policy provisions covering the total loss of a motor vehicle.
The physical damage appraisers regulations provide better protection for insureds than the subject regulation because they provide more options for determining the value of the vehicle. Examples in determining the vehicle value are the guide source method, the dealer quotation method and the actual cost method. These methods are defined in Chapter 62. In certain situations, insurers are required to offer the higher of the values obtained in settlement.
Comments
Notice of this proposed rulemaking was published at 27 Pa. B. 3061 (June 28, 1997) with a 30-day public comment period. No comments were received during the 30-day public comment period.
Fiscal Impact
The deletion of these regulations will not have any impact on costs associated with the Department, insurance companies, physical damage appraisers, political subdivisions or the public.
Paperwork
The deletion of these regulations imposes no additional paperwork requirements on the Department, insurers, physical damage appraisers or the public.
Persons Regulated
The deletion of these regulations applies to insurance companies and individuals that determine the value of a vehicle or cost of repairs to a damaged vehicle in this Commonwealth.
Contact Person
Questions regarding these regulations should be directed to: Peter Salvatore, Regulatory Coordinator, Office of Special Projects, 1326 Strawberry Square, Harrisburg, PA 17120, (717) 787-4429. Questions 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 June 18, 1997, the Department submitted a copy of this 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 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.'' In compliance with section 5(c) of the Regulatory Review Act, the Department also provided IRRC and the Committees with copies of the comments received. A copy of that material is available to the public upon request.
This rulemaking was deemed approved by the House Committee and Senate Committee on August 9, 1999, in accordance with section 5a(d) of the Regulatory Review Act (71 P. S. § 745.5a(d)). IRRC met on August 19, 1999, and approved the regulations in accordance with section 5a(e) of the Regulatory Review Act (71 P. S. § 745.5a(e)).
Findings
The Insurance 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 for in this order is necessary and appropriate for the administration and enforcement of the authorizing statutes.
Order
The Insurance Commissioner, acting under the authorizing statutes, orders that:
(a) The regulations of the Department, 31 Pa. Code Chapter 65, are amended by deleting §§ 65.11--65.14 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 adopted by this order shall take effect upon publication in the Pennsylvania Bulletin.
M. DIANE KOKEN,
Insurance Commissioner(Editor's Note: For the order of the Independent Regulatory Review Commission relating to this document, see 29 Pa. B. 4749 (September 4, 1999).)
Fiscal Note: Fiscal Note 11-151 remains valid for the final adoption of the subject regulations.
Annex A
TITLE 31. INSURANCE
PART VII. PROPERTY, FIRE AND CASUALTY INSURANCE
CHAPTER 65. MISCELLANEOUS PROVISIONS §§ 65.11--65.14. (Reserved).
[Pa.B. Doc. No. 99-1575. Filed for public inspection September 17, 1999, 9:00 a.m.]
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