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PA Bulletin, Doc. No. 06-1492




[31 PA. CODE CH. 105]

Advances Made to Companies (Other than Mutual Life)

[36 Pa.B. 4180]
[Saturday, August 5, 2006]

   The Insurance Department (Department) rescinds Chapter 105 to read as set forth in Annex A. This final-omitted rulemaking is adopted under sections 206, 506, 1501 and 1502 of The Administrative Code of 1929 (71 P. S. §§ 66, 186, 422 and 412) and sections 320 and 322.2 of The Insurance Company Law of 1921 (act) (40 P. S. §§ 443 and 445.2).

   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)), known as the Commonwealth Documents Law (CDL). Under 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.


   The purpose of this final-omitted rulemaking is to rescind Chapter 105 to eliminate obsolete, unnecessary regulations. Chapter 105 was adopted November 25, 1968, under section 809 of the act (40 P. S. § 919). The chapter established form, content and reporting requirements for cash advances made to mutual insurance companies (other than mutual life companies). Section 809 of the act was repealed by the act of November 30, 2004 (P. L. 1690, No. 216) (Act 216). Act 216 added section 322.2 of the act, regarding the issuance of surplus notes by all types of domestic insurers. A surplus note is issued by an insurer in exchange for cash or other liquid assets that have been loaned or advanced to strengthen the insurer's surplus. The new statute is consistent with current National statutory accounting standards for surplus notes and requires insurers to report the issuance and holding of surplus notes in compliance with statutory accounting practices prescribed or otherwise permitted by the Insurance Commissioner (Commissioner) under section 320 of the act. Therefore, Chapter 105 is outdated and no longer needed.

Affected Parties

   The rescission of Chapter 105 affects domestic mutual insurance companies (other than mutual life companies).

Fiscal Impact

   There is no fiscal impact as a result of this final-omitted rulemaking.


   The rescission of Chapter 105 imposes no additional paperwork requirements on the Department or insurers.

Effectiveness/Sunset Date

   This final-omitted rulemaking will become effective upon publication in the Pennsylvania Bulletin. No sunset date has been assigned.

Contact Person

   Questions regarding this final-omitted rulemaking should be addressed to Peter J. Salvatore, Regulatory Coordinator, Insurance Department, 1326 Strawberry Square, Harrisburg, PA 17120, (717) 787-4429, fax (717) 772-1969,

Regulatory Review

   Under section 5.1(a) of the Regulatory Review Act (71 P. S. § 745.5a(a)), on June 15, 2006, the Department submitted a copy of the final-omitted rulemaking and a copy of a Regulatory Analysis Form 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 regulations were submitted to the Office of Attorney General for review and approval under the Commonwealth Attorneys Act (71 P. S. §§ 732-101--732-506).

   Under section 5.1(j.2) of the Regulatory Review Act, on July 19, 2006, the final-omitted rulemaking was deemed approved by the House and Senate Committees. The Attorney General approved the rescission of the regulations on June 23, 2006. Under section 5.1(e) of the Regulatory Review Act, IRRC met on July 20, 2006, and approved the final-omitted rulemaking.


   The Commissioner finds that:

   (1)  There is good cause to rescind Chapter 105 effective upon publication of this final-omitted rulemaking. Deferral of the effective date of this final-omitted 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 rescind Chapter 105 because notice of the amendment under the circumstances is unnecessary and impractical under section 204(3) of the CDL because the underlying statutory authority no longer exists.


   The Commissioner, acting under sections 206, 506, 1501 and 1502 of The Administrative Code of 1929, orders that:

   (1)  The regulations of the Department, 31 Pa. Code Chapter 105, are amended by deleting §§ 105.1--105.5 and 105.11--105.20 to read as set forth in Annex A.

   (2)  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.

   (3)  The Department shall certify this order and Annex A and deposit them with the Legislative Reference Bureau as required by law.

   (4)  This order shall take effect upon its 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 36 Pa.B. 4441 (August 5, 2006).)

   Fiscal Note: 11-233. No fiscal impact; (8) recommends adoption.

Annex A



CHAPTER 105. (Reserved)

§§ 105.1--105.5. (Reserved).

§§ 105.11--105.20. (Reserved).

[Pa.B. Doc. No. 06-1492. Filed for public inspection August 4, 2006, 9:00 a.m.]

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