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PA Bulletin, Doc. No. 98-374



[31 PA. CODE CH. 137]


[28 Pa.B. 1237]

   The Insurance Department (Department) hereby deletes Chapter 137 (relating to miscellaneous) under the authority of sections 206, 506, 1501 and 1502 of The Administrative Code of 1929 (71 P. S. §§ 66, 186, 411 and 412); sections 213, 214 and 216 of The Insurance Department Act of 1921 (40 P. S. §§ 51, 52 and 54); and the Casualty and Surety Rate Act (40 P. S. §§ 1181--1199).


   The purpose of this rulemaking is to delete Chapter 137 to eliminate obsolete regulations. The regulations, adopted in 1971, imposed several requirements on insurance companies licensed to do business in this Commonwealth. The regulations required companies to provide the Department with reports on unsafe products, to provide notification of internal consumer affairs programs and to practice honest advertising of insurance products.

   The Department has determined that the requirement to report information on unsafe products is not essential, the requirement has not been enforced, and statutory authority already exists to request this information, if necessary (40 P. S. §§ 323.1--324.13). In addition, the requirement regarding unsafe products duplicates information required to be supplied by manufacturers, retailers and distributors to the Consumer Products Safety Commission of the Federal Government and, thus, need not be routinely collected by an insurance regulator.

   The requirement concerning internal consumer affairs programs has also been determined by the Department to be unnecessary. The Department already monitors insurers' handling of consumer complaints through its market conduct examinations and requires compliance with the Unfair Insurance Practices Act (40 P. S. §§ 1171.1--1171.15) and companion regulations, Chapter 146 (relating to unfair insurance practices).

   Finally, the requirement that insurers advertise in an honest manner is already a requirement of, and is enforced through section 5 of the Unfair Insurance Practices Act (40 P. S. § 1171.5). Further, advertising is the subject of Chapter 51 (relating to advertising provisions).


   Notice of proposed rulemaking was published at 27 Pa.B. 1850 (April 12, 1997), with a 30-day public comment period. No comments were received from the Legislative standing committees, the Independent Regulatory Review Commission (IRRC) or the general public.

Fiscal Impact

   The Department estimates that 4--5 million claims are reviewed by Commonwealth insurers annually. The cost of reviewing these claims for the purpose of identifying unsafe products, as well as the cost of developing a system for retrieving and reporting information, would exceed $5 million annually. Therefore, the approximate savings of this deletion is estimated to be $5 million on an annual basis.


   The deletion of this chapter will decrease paperwork requirements for the affected parties in that the deletion eliminates unnecessary reporting requirements for the insurance industry.

Affected Parties

   The deletion of this chapter will affect all insurers who are licensed to sell insurance in this Commonwealth.

Effectiveness/Sunset Date

   The rulemaking will become effective upon final publication in the Pennsylvania Bulletin. Because the rulemaking deletes obsolete regulations, no sunset date has been assigned.

Contact Person

   Peter Salvatore, Insurance Department, 1326 Strawberry Square, Harrisburg, PA 17120, (717) 787-0636.

Regulatory Review

   Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on March 31, 1997, the Department submitted a copy of the notice of proposed rulemaking, published at 27 Pa.B. 1850 to IRRC and to the Chairpersons of the House Committee on Insurance and the Senate Committee on Banking and Insurance for review and comment. In compliance with section 5(b.1) of the Regulatory Review Act, the Department also provided IRRC and the Committees with copies of the comments received, as well as other documentation.

   In preparing these final-form regulations, the Department has considered all comments received from IRRC, the Committees and the public. These final-form regulations were deemed approved by the House Committee and the Senate Committee on January 26, 1998. The amendments were deemed approved by IRRC in accordance with section 5(g) of the Regulatory Review Act on January 27, 1998.


   The Insurance Commissioner finds that:

   (1)  Public notice of intention to delete these regulations as set forth in 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 deletion of these regulations in the manner provided in this order is necessary and appropriate for the administration and enforcement of the authorizing statutes.


   The Insurance Commissioner, acting under the authorizing statutes, orders that:

   (a)  The regulations of the Department, 31 Pa. Code Chapter 137, are amended by deleting §§ 137.2--137.4 to read as set forth at 27 Pa.B. 1850.

   (b)  The Commissioner shall submit this order and 27 Pa.B. 1850 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 27 Pa.B. 1850 and deposit them with the Legislative Reference Bureau as required by law.

   (d)  The deletion of these regulations as adopted by this order shall take effect upon publication in the Pennsylvania Bulletin.

Insurance Commissioner

   (Editor's Note:  For the text of the order of the Independent Regulatory Review Commission relating to this document, see 28 Pa.B. 859 (February 14, 1998).)

   Fiscal Note:  Fiscal Note 11-141 remains valid for the final adoption of the subject regulations.

[Pa.B. Doc. No. 98-374. Filed for public inspection March 6, 1998, 9:00 a.m.]

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