RULES AND REGULATIONS
[31 PA. CODE CHS. 89 AND 89a]
Policies and Forms; General Filing Requirements and General Contents of Forms
[32 Pa.B. 5747] The Insurance Department (Department) amends Chapters 89 and 89a (relating to approval of life, accident and health insurance; and approval for life insurance, accident and health insurance and property and casualty insurance filing and form) to read as set forth in Annex A.
Statutory Authority
The final-form rulemaking is promulgated under the authority in sections 206, 506, 1501 and 1502 of The Administrative Code of 1929 (71 P. S. §§ 66, 186, 411 and 412); sections 510--514 of The Insurance Company Law (40 P. S. §§ 510--514); and section 3(a) of the Accident and Health Filing Reform Act (40 P. S. § 3803(a)).
Comments and Response
Notice of proposed rulemaking was published at 30 Pa.B. 4623 (September 2, 2000) with a 30-day comment period. During the 30-day comment period, comments were received from Erie Family Life Insurance Company (Erie), Highmark, Inc. (Highmark) and the Insurance Federation of Pennsylvania (IFP).
On November 2, 2000, as part of its regulatory review, the Independent Regulatory Review Commission (IRRC) submitted comments to the Department. The following is a response to these comments.
General
In regard to electronic filings, IRRC questioned how the Department would handle incompatibility problems with data submitted in electronic filings, specifically if the Department was unable to open attachments or files.
The compatibility of filing formats between the Department and insurers is an operational issue for the Department. The process currently in place is if a company submits a filing electronically and the Department is unable to open the attached file, the Department contacts the company and request; a resubmital of the filing in a format that is compatible with the Department's operating systems. As technology evolves, the Department envisions fewer problems with compatibility.
Erie requested a summary of the changes in the filing process for this Commonwealth that were published in the Pennsylvania Bulletin.
A summary of changes was not given to them because that was a proposed rulemaking and the Department did not want to have a particular company follow anything other than the current regulation. However, it should be noted that notice of filing requirements for insurance policies in this Commonwealth are done by statute, regulation or through Department notice. Regulations and Department notices will be submitted to the Pennsylvania Bulletin, the official publication of the Commonwealth, for public review.
Section 89a.2. Purpose
IRRC and the IFP noted that requirements in Chapter 89 still apply to life and accident and health filings. They suggested either combining these chapters or cross-referencing them for clarity.
The Department agrees with the comments. Chapter 89 is a very large catchall chapter with regulatory requirements for many different lines of business. The Department intends to modify the requirements in Chapter 89, referenced by IRRC and the IFP, in the future under new sections of the regulation, such as Chapter 89b and Chapter 89c, and then reserve the sections in Chapter 89 that would become obsolete. Section 89a.2(b) has been added to cross-reference the filing requirements in Chapter 89 that apply to life and accident and health filings.
Section 89a.3. Form filings.
The IFP commented that this section should be modified to reference the act of February 3, 1994 (P. L. 1, No. 1) and the act of February 17, 1994 (P. L. 92, No. 9) and other issues related to multistate group life and health filings.
After review, the Department believes the statutory language, as stated, is sufficient and therefore no changes to this section are necessary.
Section 89a.11(c)(3). General contents of forms.
IRRC and Highmark commented that the required use of ''participating or nonparticipating'' in subsection (c)(3) could cause confusion regarding whether providers in an insurer's health care network are ''participating or nonparticipating'' and requested that a different phrase be used or that this requirement not be applied to health insurers.
The Department agrees with the comments. The subsection has been modified as follows (addition italicized): ''If the form is a policy, contract or certificate, an indication of whether the form is participating or nonparticipating with regard to paying dividends to policyholders.''
In addition, the Department has reviewed several of the sections and believes that there are some minor editorial changes that need to be made. These changes, while not changing the intent of the final-form rulemaking, do clarify and enhance the rulemaking. The following is an analysis of those changes.
Section 89a.4. General filing procedure.
The Department accepts filings by any electronic medium. To improve readability, the reference to the Internet in this section has been deleted because it is redundant.
Section 89a.5. Letter of submission.
This section has been modified by the Department to clarify the filing requirements if an insurer's employee or a third party is filing with the Department on behalf of an insurer they must be identified in the letter of submission. In addition, the reference to the Internet has been deleted for the reasons noted in § 89a.4.
Section 89a.11(e). General contents of forms.
The Department has modified subsection (e) to define the requirements for the use of variable data in a form filing. The use of variable data in form filings eliminates the need for filers to submit redundant forms with only minor benefit changes. It improves the efficiency of the form filing process for filers and the form filing review process for the Department.
Affected Parties
Insurance companies transacting business in this Commonwealth who must follow the Department's form and content requirements of form filings.
Fiscal Impact
State Government
The final-form rulemaking will not have an impact on Department costs associated with monitoring industry compliance because this does not represent a major change from current policy.
General Public
The final-form rulemaking is not expected to have any cost impact on premiums paid by consumers for insurance policies.
Political Subdivisions
The final-form rulemaking has no impact on costs to political subdivisions.
Private Sector
The final-form rulemaking will not have a major impact on private sector costs because this does not represent a major change from current policy.
Paperwork
The final-form rulemaking imposes no additional paperwork requirements on the Department and modifies the paperwork requirements imposed on the insurance industry.
Effectiveness/Sunset Date
The final-form rulemaking becomes effective upon publication in the Pennsylvania Bulletin. No sunset date has been assigned.
Contact Person
Questions regarding this final-form rulemaking should be directed to Peter J. Salvatore, Regulatory Coordinator, Office of Special Projects, 1326 Strawberry Square, Harrisburg, PA 17120, (717) 787-4429, fax (717) 772-1969, psalvatore@state.pa.us.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on September 27, 2002, the Department submitted a copy of the notice of proposed rulemaking published at 30 Pa.B. 4623, to IRRC and to the Chairpersons of the House Insurance Committee and the Senate Banking and Insurance Committee for review and comment.
Under section 5(c) of the Regulatory Review Act, IRRC and the Committees were provided with copies of the comments received during the public comment period, as well as other documents when requested. In preparing this final-form rulemaking, the Department has considered the comments received from IRRC, the Committees and the public.
Under section 5.1(d) of the Regulatory Review Act (71 P. S. § 745.5a(d)), on October 17, 2002, this final-form rulemaking was deemed approved by the House and Senate Committees. Under section 5.1(e) of the Regulatory Review Act, IRRC met on October 24, 2002, and approved the final-form rulemaking.
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 Chapters 89 and 89a, are amended by deleting §§ 89.3--89.5, 89.11, 89.17 and 89.21--89.23; by amending §§ 89.1 and 89.18; and by adding §§ 89a.1--89a.5 and 89a.11 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) This order shall take effect upon final-form 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 32 Pa.B. 5582 (November 9, 2002).)
Fiscal Note: Fiscal Note 11-184 remains valid for the final adoption of the subject regulations.
Annex A
TITLE 31. INSURANCE
PART IV. LIFE INSURANCE
CHAPTER 89. APPROVAL OF LIFE, ACCIDENT AND HEALTH INSURANCE
Subchapter A. REQUIREMENTS FOR ALL POLICIES AND FORMS
GENERAL PROVISIONS § 89.1. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
Act--The Insurance Company Law of 1921 (40 P. S. §§ 341--991).
Advertisement--As defined in § 51.1 (relating to definitions).
Department--The Insurance Department of the Commonwealth.
§ 89.3. (Reserved).
§ 89.4. (Reserved).
§ 89.5. (Reserved).
PREPARATION OF FORMS § 89.11. (Reserved).
§ 89.17. (Reserved).
§ 89.18. Miscellaneous requirements.
(a) Riot injuries. If a policy contains an exception for injuries arising out of riots, the exception should be confined to those instances in which the insured is injured while participating in the riot.
(b) Rate books. Rate books and revisions thereof should be submitted for filing. The name of the insurer should appear on revision pages, supplements and the like, in order to facilitate proper filing in the Department. This subsection does not apply to group insurance.
FORMAL APPROVAL § 89.21. (Reserved).
§ 89.22. (Reserved).
§ 89.23. (Reserved).
CHAPTER 89a. APPROVAL FOR LIFE INSURANCE, ACCIDENT AND HEALTH INSURANCE AND PROPERTY AND CASUALTY INSURANCE FILING AND FORM GENERAL FILING PROVISIONS
Sec.
89a.1. Definitions. 89a.2. Purpose. 89a.3. Form filings. 89a.4. General filing procedure. 89a.5. Letter of submission. PREPARATION OF FORMS
89a.11. General contents of forms.
GENERAL FILING PROVISIONS § 89a.1. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
Department--The Insurance Department of the Commonwealth.
Filer--A person or entity submitting insurance or annuity forms to the Department.
Prominent type--
(i) Font or formatting techniques which differentiate selected text from other text.
(ii) The term includes, for example, capital letters, contrasting color and underscoring.
§ 89a.2. Purpose.
(a) This chapter provides the criteria for insurers to use in preparing specific form filings for Department review. Additionally, the chapter provides requirements for the general content of forms.
(b) In addition to the requirements of this chapter, Chapter 89 (relating to life and accident and health insurance filings) also applies to these filings.
§ 89a.3. Form filings.
(a) Submission of forms. Policies, contracts, certificates, endorsements, riders, applications and related forms for life insurance and annuities, accident and health insurance, and property and casualty insurance, intended to be issued in this Commonwealth, shall be submitted to the Department in accordance with the following:
(1) Forms for life insurance and annuities issued by insurance companies shall be submitted for prior approval in accordance with section 354 of The Insurance Company Law of 1921 (40 P. S. § 477b), unless specifically excepted under section 354 of The Insurance Company Law of 1921. Forms for life insurance and annuities issued by fraternal benefit societies shall be submitted for prior approval in accordance with section 404(f) of the Fraternal Benefit Societies Code (40 P. S. § 1142-404(f)), unless specifically excepted under section 354 of The Insurance Company Law of 1921.
(2) Forms for accident and health insurance shall be filed in accordance with section 3 of the Accident and Health Filing Reform Act (40 P. S. § 3803).
(3) Forms for property and casualty insurance shall be submitted for prior approval in accordance with section 354 of The Insurance Company Law of 1921 unless specifically excepted under section 354 of The Insurance Company Law of 1921.
(b) Out-of-State delivery. When other jurisdictions require prior approval or filing by the Department of forms to be issued in those jurisdictions by domestic Pennsylvania insurers, the insurers may submit the forms to the Department for approval or filing for issuance outside of this Commonwealth only.
§ 89a.4. General filing procedure.
(a) Number of copies.
(1) Forms intended to be issued in this Commonwealth shall be submitted in duplicate for hard copy filings. Filers submitting forms by means of electronic medium shall submit one electronic copy. One copy of each form may be retained by the Department.
(2) One copy of a form intended to be issued only outside this Commonwealth shall be submitted.
(b) Clearly legible forms. Forms intended to be issued in this Commonwealth shall be submitted in clearly legible form.
(c) Filing fee. A submission of forms shall include any filing fee as required by section 212 of The Insurance Department Act of 1921 (40 P. S. § 50).
(d) Self-addressed stamped return envelope. A hard copy submission of forms shall include a self-addressed envelope bearing enough postage to permit the return to the filer of the duplicate copies of the forms or submission letter, or both.
(e) Separate submissions. Forms for each line of insurance, life and annuities, accident and health, and property and casualty, shall be submitted separately to their respective bureaus within the Department: the Bureau of Life Insurance, the Bureau of Accident and Health Insurance, and the Bureau of Property and Casualty Insurance.
(f) By whom submitted. A submission of forms shall be made by the home office or an administrative office of the insurer, or by an attorney at law representing the insurer, unless the following applies:
(1) The submission includes, or is preceded by, a document from the insurer specifically authorizing the filer to make the submission on the insurer's behalf.
(2) The submission is made by a rating organization, licensed in this Commonwealth, on behalf of its members and subscriber companies.
§ 89a.5. Letter of submission.
The letter of submission shall be in duplicate for hard copy filings, shall clearly identify the insurer whose name appears on the forms and the filer, and shall be sent to the appropriate bureau director in the Office of Rate and Policy Regulation under the requirements of § 89a.4(e) (relating to general filing procedure). Only one copy of the letter of submission is necessary for electronic submissions. The letter shall contain at least all of the following information for each form submitted:
(1) The identifying form number. Additionally, if the form is other than a policy, contract or certificate, the form number of the policy, contract or certificate with which it will be used, and the date approved by or filed with the Department, or if not approved or filed, the date last submitted to the Department, or if for more general use, the type or group of the forms shall be described. If the form is a group certificate, the form number of the group master policy with which it will be used, and the date the group master policy was approved by or filed with the Department, or if not approved or filed, the date last submitted to the Department, or if the certificate is for general use, the types of group master policies with which it will be used.
(2) A designation of the general type of form submitted; for example, policy, contract, certificate, rider, endorsement, amendment, agreement, application, insert page or other general type.
(3) A brief statement of the specific type of insurance or annuity benefit coverage provided by the form. If the form does not provide insurance or annuity benefit coverage, a brief statement of the specific purpose of the form.
(4) If the form contains any provision, condition, feature or concept that departs from those generally used by the industry and that could be construed as new, innovative, uncommon or unusual, a statement to this effect and an explanation of the specific purpose of the provision, condition, feature or concept.
(5) An explanation of the marketing method, if the method of marketing of the form departs from the direct sales approach or employs a new concept.
(6) If the form is a new one, not replacing an existing form, a statement to that effect.
(7) If the form is intended to replace another form, the form number of the form to be replaced, the date that the form was approved by or filed with the Department, and a statement of the changes made to the form to be replaced.
(8) For group insurance policy forms, a brief description of the type of entity to which the group policy will be issued; for example, discretionary group, association, out-of-State trust.
(9) The amount of the filing fee included with the submission or the amount that will be billed to the insurer.
PREPARATION OF FORMS § 89a.11. General contents of forms.
(a) Name and address. Each form shall state the full corporate or legal name of the company, association, exchange or society. However, the name need appear for filing purposes only on a rider, endorsement, amendment, agreement or insert page. If added for filing purposes only, the name may be added by any legible means. If more than one insurer is using an application, a multicompany application providing for the designation of the applicable insurer and available coverages, if applicable, may be used. A policy, contract or fraternal certificate shall state a current address for the insurer, consisting of at least a city and state or province.
(b) Form number. Each form shall contain a form number consisting of numbers, letters, or both. The form number shall be adequate to distinguish the form from all others used by the insurer. The form number may be the same as that of a form to be replaced. However, if the form to be replaced was approved by or filed with the Department, it may not have been issued in this Commonwealth and shall be withdrawn from any issuance in this Commonwealth.
(c) Description or caption. Each form, except an insert page, shall contain a brief description or descriptive caption. This brief description or descriptive caption shall appear in prominent type on the first or cover page of the form, or, in the case of a policy, contract or certificate, on the specifications page if the brief description or descriptive caption is visible without opening the form. The brief description or descriptive caption shall contain at least the following information:
(1) A designation of the general type of the form, that is, policy, contract, certificate, rider, endorsement, amendment, agreement, application or other general type.
(2) A designation of the specific type of insurance or annuity coverage provided, or if the form does not provide insurance or annuity coverage, a designation of the purpose of the form.
(3) If the form is a policy, contract or certificate, an indication of whether the form is participating or nonparticipating with regard to paying dividends to policyholders.
(d) Required statement. A rider, endorsement, amendment or agreement designated by another term in its brief description or descriptive caption shall state that it is ''attached to and made part of the (policy, contract or certificate),'' as appropriate.
(e) Hypothetical data. The blank spaces of each form, except an application, shall be filled in with hypothetical data to indicate the purpose of the form. This data shall be realistic and consistent with the other contents of the form. Information appearing in a form, except an application, which is variable shall be bracketed or otherwise marked to denote variability.
(f) Readability. A form:
(1) Shall be written in simple words and with sentences as short as possible. The words and sentences should convey meanings clearly and directly. Words should be used in their commonly understood senses.
(2) Shall contain a definition or explanation of terminology that would not be ordinarily understood by a person of average intelligence.
(3) May not contain inconsistent or contradictory language or provisions.
(4) That provides insurance coverage, shall accurately and completely explain the coverage and conditions of coverage.
[Pa.B. Doc. No. 02-2095. Filed for public inspection November 22, 2002, 9:00 a.m.]
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