§ 67.42. Phase-in of extraordinary medical benefit coverage.
(a) Mandatory offering. The act of April 26, 1989 (P. L.
, No. 4) (Act 4) amends the act to require automobile insurers to offer extraordinary medical benefit (EMB) coverage as of June 1, 1989. Insurers shall offer to bind this coverage as of June 1, 1989 if so requested by the policyholder. This includes policyholders who have been bound or assigned to an insurer under the Assigned Risk Plan. Policyholders who have already requested EMB or similar coverage from their insurer need not provide the insurer with additional notice to have this coverage effective as of June 1, 1989.(b) Notice to policyholders. By May 24, 1989, insurers should send a notice to policyholders in the form required by section 1798.2(c) of the act (relating to transition), except that if the insurer is utilizing the interim rate specified in subsection (e), appropriate revisions may be made in the interest of fully and accurately informing the policyholder. Insurers that have sent a notice to policyholders regarding an approved catastrophic loss filing by May 8, 1989 will be deemed to have satisfied the requirement of this subsection.
(c) Rate filing. Insurers are required by section 1798.2(b) of the act to make an EMB rate filing with the Department by May 26, 1989, that date being 30 days from the effective date of section 1798.2 of the act. This filing requirement includes those insurers which had obtained Departmental approval of catastrophic loss rates by April 26, 1989—the effective date of section 1798.2 of the act. However, those insurers may file amendments to their approved catastrophic loss filings with the changes necessary to comply with Act 4. No initial EMB rate filing or amendment to an approved catastrophic loss filing may be deemed into effect.
(d) Insurers with approved catastrophic loss rates and forms. Insurers which have obtained Departmental approval for catastrophic loss rates and forms by April 26, 1989 shall utilize those rates and forms for EMB endorsements issued effective on or after June 1, 1989 until the Department approves a new EMB rate or form. The insurer shall pro-rate the catastrophic loss premium to the next policy renewal. Insurers which are subscribers to a licensed rating organization that had obtained Departmental approval of catastrophic loss rates by April 26, 1989 may elect to utilize the rating organization’s approved rates and forms for EMB coverage until the rating organization receives approval of a revised filing under subsection (c). With approval of the Department, subscribers may utilize deviations from the rate and form approved for a rating organization if the deviation provides for a rate reduction and the form provides more liberal coverage. Insurers planning to utilize the rating organization’s rates and forms or deviations shall inform the Department of their intent by May 26, 1989.
(e) Interim rate and forms. Insurers are obligated by Act 4 to offer to bind EMB coverage as of June 1, 1989. However, Act 4 does not relieve insurers that had not obtained Departmental approval for catastrophic loss rates and forms by April 26, 1989 from the requirements under section 4(h) of the Casualty and Surety Rate Regulatory Act (40 P. S. § 1184(h)) and section 354 of the Insurance Company Law of 1921 (40 P. S. § 477b) that rates and forms be approved by the Department prior to use. Under the Commissioner’s authority under the Casualty and Surety Rate Regulatory Act (40 P. S. § § 1181—1199), the requirement of preapproved rates for EMB coverage is temporarily suspended if an insurer utilizes the interim Statewide rate of $38 per motor vehicle, per year. The interim rate is to be utilized for EMB endorsements issued effective on or after June 1, 1989, until the Department approves the insurer’s EMB rate filing. The interim EMB rate shall be prorated to the next policy renewal. Insurers not having approved EMB forms may utilize the form in Appendix A.
(f) Enforcement action. The Department may take enforcement action against insurers failing to offer to bind EMB coverage as of June 1, 1989. However, the Department will not take enforcement action against insurers utilizing the interim rates and forms specified in subsection (e) prior to the Department’s approval of n insurer’s EMB rates and forms.
Source The provisions of this § 67.42 adopted May 19, 1989, effective May 8, 1989, 19 Pa.B. 2178.
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