§ 61.5. Notice of cancellation or refusal to renew; requirements.
Notices of cancellation or refusal to renew shall meet the following requirements:
(1) The form shall be clearly labeled: ‘‘Notice of Cancellation or Refusal to Renew.’’
(2) The form shall be given to the insured.
(3) The date, not less than 30 days after the date of delivery or mailing, on which the cancellation or refusal to renew is to become effective shall be clearly indicated. If the cancellation or nonrenewal is due to nonpayment of premium the effective date may be 15 days from the date of delivery or mailing.
(4) Space shall be provided for the insurer to provide the specific reasons for the cancellation or refusal to renew. In the alternative, the insurer may include a statement that the reasons will be supplied upon the written request of the insured. The statement shall specify that the request shall be mailed or delivered to the insurer not less than 20 days prior to the effective date. The statement shall further indicate that the insurer will supply the reasons within 5 days of its receipt of the request.
(5) If the cancellation or refusal to renew is based upon nonpayment of premium and the insurer notifies the insured less than 30 days prior to the effective date of the cancellation or nonrenewal, the insurer shall give the insured a period of at least 10 days to request the specific details of the reason for such cancellation or nonrenewal.
(6) The reasons for the cancellation shall be clear and complete. Upon request of the insured if the cancellation is for nonpayment of premium the insurer shall specify the amount of premium due, the date when it was due and to whom it was to be paid. If the premium was financed, the name and address of the organization financing the premium shall also be given. If the cancellation is because the driver’s license or motor vehicle registration of the named insured has been under suspension or revocation the notice shall specify the date of such revocation or suspension and the name of the administrative or judicial body ordering such action. The reasons for nonrenewal shall be clear and complete. They shall be stated such that a person of average intelligence and education can understand them.
(7) The form shall include advice that the insured has a right to request review of the insurer’s action as provided in § 61.6 (relating to appeal procedures) within 10 days of receipt of the reasons for cancellation or nonrenewal. In so doing the notice shall include the following:
(i) Advice that review may be requested by signing a copy of the form in a space provided and sending it to one of the regional offices of the Insurance Department.
(ii) The addresses of the four regional offices of the Insurance Department.
(8) If the reasons for the cancellation or nonrenewal are not included in the notice, the notice shall include advice that the insured has a right to request review of the insurer’s action within 10 days of receipt of the specific reason for the insurer’s action. The statement of the insurer’s reasons shall also comply with the requirements in paragraph (7).
(9) The form must include advice to the insured that he or she may be eligible for insurance under the Pennsylvania Automobile Insurance Plan.
(10) Each provision of the notice shall be set forth in clear and understandable terms. To assure adequate notice, the notice shall be set in roman type no smaller than ten point modern type, two points leaded, except where a larger type size is required.
(11) A recommended form of notice which would meet the requirements of the foregoing provisions is given in Appendix A.
(12) A recommended form of notice which would meet the requirements of the foregoing provisions if the notice states that reasons for nonrenewal or cancellation will be supplied upon request of the insured is given in Appendix B.
(13) A recommended form of a statement to the insured of the reasons for the cancellation or nonrenewal of the policy if the reasons were not given in the notice to the insured is set forth in Appendix C.
Source The provisions of this § 61.5 amended October 14, 1977, 7 Pa.B. 201. Immediately preceding text appears at serial page (19079).
Notes of Decisions Notice of Cancellation
The cancellation notice requirements specified by the Commissioner’s regulation, 31 Pa. Code § 61.5 and Appendices A—C to Chapter 61, are not applicable where the insurer demands proper premium and the insured refuses to pay even though aware that the premium is due, since the refusal to pay is an ‘‘overt action’’ indicating the insured’s intention to cancel, bringing the matter within the exclusion from statutory coverage under 40 P. S. § 1008.6(2). Federal Kemper Insurance Co. v. Insurance Department, 500 A.2d 796 (Pa. Cmwlth. 1985).
Notice of Nonrenewal
Automobile insurer’s notice of nonrenewal of policy, which included three additional accidents which occurred beyond the 36-month period during which accidents may be considered as basis for renewal, was not defective as failing to satisfy specificity requirements for reasons for nonrenewal. State Farm Mutual Automobile Insurance Company v. Insurance Department, 578 A.2d 999 (Pa. Cmwlth. 1990).
Cross References This section cited in 31 Pa. Code § 61.14 (relating to foreign language requirement).
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