PROPOSED RULEMAKING
[31 PA. CODE CH. 67]
Motor Vehicle Financial Responsibility Law; Catastrophic Loss Benefits Continuation Fund
[27 Pa.B. 6229] The Insurance Department (Department), Bureau of Special Funds, proposes to amend Chapter 67, Subchapter A (relating to Catastrophic Loss Trust Fund) to read as set forth in Annex A. The proposed amendments are published as proposed rulemaking under the authority of sections 506 and 1502 of The Administrative Code of 1929 (71 P. S. §§ 186 and 412). The proposed rulemaking is necessary due to the repeal of the Catastrophic Loss Trust Fund and the subsequent implementation of the Catastrophic Loss Benefits Continuation Fund (Fund).
Purpose
Sections 67.1--67.15 were originally promulgated to provide guidance for the handling of claims under the Catastrophic Loss Trust Fund created in 1984 by Subchapter F of 75 Pa. C.S. §§ 1761--1769, which was deleted effective December 12, 1988, by the act of December 12, 1988 (P. L. 1120, No. 144) (Act 144). Subsequently, the act of April 26, 1989 (P. L. 13, No. 4) (Act 4) added Subchapter I to Title 75. Section 1798.4 of Act 4 established the Fund to provide funds necessary to pay catastrophic loss benefits to individuals who suffered a catastrophic loss after October 1, 1984, and prior to June 1, 1989, or during the December 1988-89 registration year for which payment for Catastrophic Loss Trust Fund coverage was made under former 75 Pa.C.S. § 1762.
Section 1798.2 of Subchapter I contains a savings provision providing that despite the repeal of Subchapter F by Act 144, persons experiencing catastrophic losses during the time between the Catastrophic Loss Trust Fund's effective date (October 1, 1984, and June 1, 1989) or during the December 1988-89 vehicle registration year for which a fee was paid, shall continue to receive, or will be eligible to receive, catastrophic loss benefits as if Subchapter F had not been deleted. Because of the deletion of Subchapter F and the addition of Subchapter I allowing claimants to continue to receive Fund benefits, it is necessary to modify various sections of Chapter 67 as well as add a new section to reflect the statutory changes and provide a more accurate reflection of current Fund needs.
Explanation of Regulatory Requirements
Section 67.1 (relating to purpose) is proposed to be revised to state that the deletion of and amendments to various sections of Chapter 67 are necessitated by the deletion of Subchapter F of 75 Pa.C.S. §§ 1761--1769, and the amendment of Title 75 to add Subchapter I, which allows certain claimants to continue to receive benefits through the Fund.
Section 67.2 (relating to definitions) is proposed to be revised to delete definitions for ''Board,'' ''Commissioner,'' ''Director,'' ''Fund charge,'' ''insured,'' ''insurer,'' ''manager,'' ''policy'' and ''self-insurer'' which are no longer applicable. Further, definitions have been added for ''claims manager,'' ''eligible claimant'' and ''surcharge'' which are necessary due to changes in the regulations.
Section 67.3 (relating to fund financing) is proposed to be amended to reflect that the Fund is now financed with surcharges placed on motor vehicle violations as opposed to a surcharge paid by each vehicle owner.
Section 67.4 (relating to filing of claim) is proposed to be revised to specify that the Fund will review a claim for benefits, advise the claimant of eligibility and may employ an administrator to perform these functions.
Section 67.5 (collection of data) is proposed to be revised in subsection (a) to clarify that both the Fund and its Administrator are authorized to obtain data or information from claimants, health care providers, insurers and self-insurers to assist in determining eligibility for Fund benefits. The language in subsection (a) authorizing the Administrator to collect data to assure sufficient Fund funding was deleted since the Administrator no longer performs this role. Subsection (b) was deleted in its entirety since it is no longer needed to properly enforce the law.
Section 67.6 (relating to appeals) is proposed to be changed to provide a new claim review procedure wherein a claimant may request review of the Administrator's determination of eligibility for benefits, allowance of benefits or otherwise by filing a complaint in writing that is received by the Claims Manager of the Fund no later than 30 days from the date of the Administrator's denial letter. No later than 30 days after receipt of claimant's written complaint, the Claims Manager shall issue a letter determination notifying the claimant of the decision on eligibility or allowance of benefits. If the claimant is dissatisfied with the results of the Claim Manager's determination, the claimant may then request, in writing, a formal administrative hearing before the Commissioner. This request must be received by the Department no later than 30 days of the date of the Claim Manager's determination.
This appeal process is a change from the procedure contained in the previous regulations, which allowed the claimant to request review of the Administrator's determination from the Department's Policyholders Services and Enforcement Division. This change is necessitated because the management of the Fund within the Department has changed from the Policyholder Services and Enforcement Division to the Bureau of Special Funds. Although the prior regulations did not set forth an explicit time period for the review process, the proposed amendments provide a 30-day time requirement for submitting requests for review to both the Claims Manager and the Commissioner. This time frame is consistent with the appeal periods contained in other insurance laws and the General Rules of Administrative Practice and Procedure, specifically 1 Pa. Code § 31.11.
Fund claimants who suffered a catastrophic loss between June 1, 1989, and December 31, 1989, may also be eligible to receive Extraordinary Medical Benefits (EMB). For these individuals, § 67.16 (relating to eligible claimant for Fund benefits) confirms that the EMB carrier would be the primary payor and the Fund secondary. This section must be added because EMB coverage came into effect after the December 12, 1988, deletion of the Catastrophic Loss Trust Fund.
Finally, § 67.16 is proposed to be added to delineate the claimant's duty to cooperate in providing coordination of benefits information to the Fund and its administrator. This section is necessary to ensure that the Fund is properly paying claimant benefits in all instances in which it is the primary payor, and not paying benefits in instances in which it is not.
Affected Parties
Parties who will be affected by these proposed amendments include claimants who are currently receiving benefits from the Fund, catastrophically injured claimants who are not currently eligible to receive benefits from the Fund but who may be eligible in the future, the Administrator for the Fund and the Fund itself.
Fiscal Impact
State Government
The proposed amendments will not have an impact on costs of the Fund or the Department.
General Public
The proposed amendments are not expected to have a fiscal impact upon the general public.
Political Subdivisions
The proposed amendments have no impact on costs to political subdivisions.
Private Sector
The proposed amendments have no impact on costs to the private sector.
Paperwork
The proposed amendments impose no additional paperwork requirements on the Department or the Fund.
Effectiveness/Sunset Date
The proposed amendments will become effective 90 days after final adoption and publication in the Pennsylvania Bulletin as final rulemaking. No sunset date has been assigned. All Department regulations are reviewed for continued effectiveness on a triennial basis.
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, (717) 787-4429, within 30 days of publication of this notice in the Pennsylvania Bulletin.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on November 14, 1997, the Department submitted a copy of proposed amendments 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 proposal, 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 the Committees have objections to any portion of the proposed amendments, they will notify the Department within 20 days of the close of the public comment period. If IRRC has objections to any portion of the proposed amendments, it will notify the Department within 10 days of the close of the Committees' comment period. The notification shall specify the regulatory review criteria which have not been met by that portion. The Regulatory Review Act specifies detailed procedures for review prior to final publication of the regulations by the Department, the General Assembly and the Governor of objections raised.
M. DIANE KOKEN,
Acting Insurance CommissionerFiscal Note: 11-160. No fiscal impact; (8) recommends adoption.
Annex A
TITLE 31. INSURANCE
PART II. AUTOMOBILE INSURANCE
CHAPTER 67. MOTOR VEHICLE FINANCIAL RESPONSIBILITY LAW
Subchapter A. CATASTROPHIC LOSS TRUST FUND § 67.1. Purpose.
[The purpose of this] This subchapter [is to provide] provides procedures for the establishment and administration of the Catastrophic Loss [Trust] Benefits Continuation Fund, which continues the Catastrophic Loss Trust Fund eligibility determinations for certain individuals suffering catastrophic losses prior to June 1, 1989, or who may have suffered a catastrophic loss during the December 1988 to December 1989 vehicle registration year for which payment for Catastrophic Loss Trust Fund coverage was made in accordance with former section 1762 of the act (Repealed).
§ 67.2. Definitions.
The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise:
* * * * * Administrator--The person or entity designated by the Catastrophic Loss [Trust] Benefits Continuation Fund [Board] to review claims for catastrophic loss benefits, determine the eligibility of the claimant and make payment [where] when appropriate.
Benefits--Payments by the Catastrophic Loss [Trust] Benefits Continuation Fund for reasonable [and], necessary and accident-related expenses for medical treatment and rehabilitative services which exceed $100,000, subject to limitations provided in the act.
[Board--The Board of Directors responsible for the general supervision of the Catastrophic Loss Trust Fund Board.]
Claims manager--The Department employe designated by the Insurance Commissioner to manage the daily activities of the Fund.
[Commissioner--The Insurance Commissioner of the Commonwealth.]
* * * * * [Director--The Executive Director hired by the Board to carry out its decisions, receive all claims for benefits, forward them to the administrator for handling and monitor their progress.]
Eligible claimant--An individual who meets the requirements of § 67.16 (relating to eligible claimant for fund benefits).
Fund--The Catastrophic Loss [Trust] Benefits Continuation Fund established to provide benefits required by the act.
[Fund charge--The amount to be paid by persons registering motor vehicles to fund the Catastrophic Loss Trust Fund.
Insured--A person who has purchased an insurance policy that provides coverage to satisfy the financial responsibility requirements of the act.
Insurer--An insurance company, association or exchange providing coverage on motor vehicles under the act.
Manager--The person designated by the Catastrophic Loss Trust Fund Board to accept, invest and reinvest the monies of the Catastrophic Loss Trust Fund.
Policy--An insurance policy which provides coverage to satisfy the financial responsibility requirements of the act.
Self-insurer--A person or entity designated as an approved self-insurer by the Department of Transportation as set forth in 67 Pa. Code § 223.5 (relating to certificate).]
Surcharge--The amount to be paid by drivers upon conviction of any traffic violation, exclusive of parking offenses, to fund the Fund.
§ 67.3. [Amount of fund charge] Fund financing.
[(a) Fund charge] The [fund] Fund shall be financed by [levying a fund charge on each motor vehicle required to be registered under 75 Pa.C.S. § 1301--1373 (relating to registration of vehicles) except trailers, recreational vehicles not intended for highway use, motorcycles, motor-driven cycles, motorized pedacycles or like type vehicles] surcharges for motor vehicle violations pursuant to 75 Pa.C.S. § 6506(a) and (b).
[(b) Initial Fund charge. On October 1, 1984, the amount of fund charge shall be $5 per annum.
(c) Subsequent Fund charge. By January 1, 1986, and by January 1 every year thereafter, the Board shall have established an annual fund charge in the amount necessary to ensure funding for all the Fund's liabilities, which amount shall be calculated in a manner consistent with sound actuarial principles.
(d) Amount required. The Catastrophic Loss Trust Fund charge shall be $8 for each vehicle required to be registered under 75 Pa.C.S. Chapter 13 (relating to registration of vehicles) except trailers, recreational vehicles not intended for highway use, motorcycles, motor-driven cycles, motorized pedacycles or like type vehicles during the period October 1, 1988--January 31, 1989. The charge during the period February 1, 1989--September 30, 1989 is $24.]
§ 67.4. [Filing of claim] Claim filing and review.
(a) A person who [is eligible for] seeks benefits from the Fund [may] shall file a claim for benefits [on a form available at the regional offices of the Department or at the office of the insurer] with the Fund. The Fund will review the claim for benefits and advise the claimant in writing as to whether the claimant is an eligible claimant.
(b) A [form] claim submitted to the Fund which is erroneously completed or contains inadequate information may be returned to the claimant for correction and resubmission [at the discretion of the Administrator].
(c) The Fund may employ an Administrator to review the claim for benefits and advise the claimant of eligibility.
§ 67.5. Collection of data.
[(a)] The Administrator [is] and Fund are authorized to obtain from claimants, insurers and self-insurers data or information which is necessary [to assure that funding is sufficient to pay claimants,] to permit review of claims for Fund benefits [and to perform other duties under the act.
(b) As soon as practical, but no later than 10 days after determining that a claim for medical and rehabilitative expenses is likely to exceed $100,000, the insurer or self-insurer shall notify the Fund in writing.]
§ 67.6. Appeals.
(a) A claimant who disputes a determination by [of] the Administrator or Fund concerning eligibility for or allowance of benefits, [allowance of benefits or otherwise,] may [obtain a review by filing] file a written complaint [with the Policyholders Services and Enforcement Division of the Department] with the Claims Manager. The written determination by the Fund or Administrator shall advise the claimant how to file a complaint with the Claims Manager. A complaint is timely filed by the claimant if received by the Claims Manager no later than 30 days after the date of the written determination from the Administrator or the Fund denying eligibility for or allowance of benefits.
(b) The Claims Manager shall issue a written determination notifying the claimant of the results of the Claims Manager's review. If the claimant is not satisfied with the results of the [Department's] Claims Manager's review, [he] the claimant may [seek] request in writing a formal administrative hearing before the Insurance Commissioner [under 2 Pa.C.S. §§ 501--508 and 701--704 (relating to Administrative Agency Law.)] The written determination by the Claims Manager shall advise the claimant how to request a hearing. A request for hearing is timely if received by the Department no later than 30 days after the date of the written determination from the Claims Manager.
(c) Appeals are conducted with the General Rules of Administrative Practice and Procedure applicable to the Department as set forth in 1 Pa. Code Part II and Chapter 56 (relating to special rules of administrative practice and procedure).
§ 67.16. Eligible claimant for Fund benefits.
An individual who has suffered injuries in a motor vehicle accident is an eligible claimant for Fund benefits if the individual meets the following criteria:
(1) The individual was a resident of this Commonwealth at the time of the accident.
(2) The injury arose out of the maintenance or use of a motor vehicle after October 1, 1984, and prior to June 1, 1989, or during the December 1988 to December 1989 vehicle registration year for which payment for Catastrophic Loss Trust Fund coverage was made in accordance with former section 1762 of the act (Repealed).
(3) The auto accident occurred in the United States, its territories or possessions or Canada.
(4) The injured person was not the driver or occupant of a recreational vehicle not intended for highway use, a motorcycle, a motorized pedal cycle, a motor-driven cycle or any vehicle required to be registered under 75 Pa.C.S. (relating to the Vehicle Code) but not subject to the Fund charge.
(5) As a result of the accident, the individual incurred reasonable and necessary medical and rehabilitative expenses exceeding $100,000.
(6) The individual's medical and rehabilitative expenses were not covered by workers' compensation.
(7) The individual's medical and rehabilitative expenses were not covered by a policy issued under the Pennsylvania No-fault Motor Vehicle Insurance Act (repealed).
§ 67.17 Extraordinary medical benefits coverage.
An eligible claimant receiving Fund benefits for accidents occurring between June 1, 1989, through December 31, 1989, may also be insured for extraordinary medical benefits coverage. If the Administrator or the Fund determines that extraordinary medical benefits are applicable, the insurer providing those benefits is the primary payor and the Fund has no obligation to pay until the benefits payable by the insurer providing the extraordinary medical benefits have been exhausted. No duplicate recovery is available. The total lifetime aggregate to one eligible claimant under both Extraordinary Medical Benefits coverage and the Fund may not exceed $1 million dollars.
§ 67.18. Coordination of benefits.
An eligible claimant shall cooperate in providing coordination of benefit information to the Administrator and the Fund. Failure to cooperate will result in a claimant's suspension of benefits.
[Pa.B. Doc. No. 97-1910. Filed for public inspection November 28, 1997, 9:00 a.m.]
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