RULES AND REGULATIONS
Title 31--INSURANCE
INSURANCE DEPARTMENT
[31 PA. CODE CH. 115]
Public Adjuster Contracts and Licensing Requirements
[34 Pa.B. 6404] The Insurance Department (Department) amends § 115.2 (relating to contents of public adjuster contracts, minimum standards) to read as set forth in Annex A.
Statutory Authority
The final-omitted rulemaking is adopted 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 under the specific statutory authority of sections 1--8 of the act of December 20, 1983 (P. L. 260, No. 72) (63 P. S. §§ 1601--1608) (act).
Notice of proposed rulemaking is omitted in accordance with section 204(3) of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. § 1204(3)) (CDL). In accordance with section 204(3) of the CDL, notice of proposed rulemaking may be omitted when the agency for good cause finds that public notice of its intention to amend an administrative regulation is, under the circumstances, impracticable and unnecessary.
Purpose
This final-omitted rulemaking will allow the section to be consistent with the statute. The Department is only modifying § 115.2 and is not amending any portion of the remainder of Chapter 115 (relating to public adjuster contracts and licensing requirements).
Explanation of Regulatory Requirements
Section 5 of the act allows a consumer 4 calendar days in which the consumer can rescind a contract with a public adjuster. The Department, in an attempt to standardize language and be consistent from chapter to chapter, determined that business days was more consistent throughout many of the chapters. Therefore, the Department changed calendar days to business days when this section was promulgated in 2002.
This final-omitted rulemaking will correct the deficiency and make consistent the terms between the regulation and the statute and thus avoid potential problems that consumers and public adjusters may have with future contracts.
Fiscal Impact
There will be minimal impact on public adjusters, as their contract will need to be revised. As many public adjusters are using computers to generate their contracts, the Department does not expect this expense to be significant.
Affected Parties
This final-omitted rulemaking will affect all public adjusters who do business in this Commonwealth.
Effectiveness/Sunset Date
This final-omitted rulemaking will become effective upon final adoption and publication in the Pennsylvania Bulletin. The Department continues to monitor the effectiveness of regulations on a triennial basis so no sunset date has been assigned.
Contact Person
Questions regarding the final-omitted rulemaking may be addressed to Peter J. Salvatore, Regulatory Coordinator, Insurance Department, 1326 Strawberry Square, Harrisburg, PA 17120, (717) 787-4429. Questions may also be e-mailed to psalvatore@ state.pa.us, fax (717) 772-1969.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on October 19, 2004, the Department submitted a copy of the final-omitted rulemaking to the Independent Regulatory Review Commission (IRRC) and to the Chairpersons of the House Committee on Insurance and the Senate Committee on Banking and Insurance. On the same date, the final-omitted rulemaking was submitted to the Office of Attorney General for review and approval under the Commonwealth Attorneys Act (71 P. S. §§ 732-101--732-506).
In accordance with section 5(c) of the Regulatory Review Act, on November 17, 2004, the final-omitted rulemaking was deemed approved by the Senate Banking and Insurance Committee and the House Insurance Committee. The Attorney General approved the final-omitted rulemaking on October 29, 2004. IRRC met on November 18, 2004, and approved the final-omitted rulemaking.
Findings
The Insurance Commissioner finds that:
(1) There is good cause to amend § 115.2 effective upon publication with the proposed rulemaking omitted. Deferral of the effective date of rulemaking would be impractical and not serve the public interest. Under section 204(3) of the CDL there is no purpose to be served by deferring the effective date.
(2) There is good cause to forego public notice of the intention to amend § 115.2 because notice of the rulemaking under the circumstances is unnecessary and impractical because the change proposed is necessary to ensure the consistency with the statute.
Order
The Commissioner, acting under the authority in sections 206, 506, 1501 and 1502 of The Administrative Code of 1929, orders that:
(a) The regulations of the Department, 31 Pa. Code Chapter 115, are amended by amending § 115.2 to read as set forth in Annex A.
(b) The Department shall submit this order and Annex A to the Office of Attorney General and the Office of General Counsel for approval as to form and legality as required by law.
(c) The Department 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 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 34 Pa.B. 6476 (December 4, 2004).)
Fiscal Note: 11-223. No fiscal impact; (8) recommends adoption.
Annex A
TITLE 31. INSURANCE
PART VII. PROPERTY, FIRE AND CASUALTY INSURANCE
CHAPTER 115. PUBLIC ADJUSTER CONTRACTS AND LICENSING REQUIREMENTS
GENERAL § 115.2. Contents of public adjuster contracts, minimum standards.
(a) A public adjuster contract shall contain, at a minimum, the following information:
(1) The title of the contract to read: Public Adjuster Contract.
(2) The name, business name, address and telephone number of the public adjuster.
(3) The name and address of the insured.
(4) The consideration expressed as a percentage of any payments to be received on the negotiated claim, or as a maximum dollar amount.
(5) A space provided for the execution date (month, day, year) of the contract.
(6) A space provided for the signature of the insured and the public adjuster.
(7) A provision setting forth the insured's right to cancel, which shall be printed in prominent type on the first page of the public adjuster contract in substantially the following form:
Notice of Right to Cancel You, the insured, may cancel this contract at any time prior to midnight of the fourth calendar day after the execution date of this contract. If you exercise your right to cancel this contract, you will be liable for reasonable and necessary emergency out-of-pocket expenses or services which were paid for or incurred by the public adjuster to protect the interests of the insured during the period preceding cancellation.
If you cancel this contract, anything of value given by you under the contract will be returned to you within 15 business days following the receipt by the public adjuster of your cancellation notice, and any security interest arising out of the contract will be cancelled. To cancel this contract, mail, fax or deliver in person a signed and dated copy of this notice or any other written notice, indicating your intent to cancel and the date thereof to (name of public adjuster) at (business address of public adjuster) not later than midnight of (date). I hereby cancel this contract.
_________________
(Date)
_________________
(Insured's signature)(b) A public adjuster contract may not contain any contract term that:
(1) Allows the public adjuster's fee to be collected when money is due from an insurance company, but not paid, or that allows a public adjuster to collect the entire fee from the first check issued by an insurance company, rather than as percentage of each check issued by an insurance company.
(2) Requires the insured to authorize an insurance company to issue a check only in the name of the public adjuster.
(3) Imposes late fees or collection costs on the insured.
[Pa.B. Doc. No. 04-2137. Filed for public inspection December 3, 2004, 9:00 a.m.]
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