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PA Bulletin, Doc. No. 97-1026


[31 PA. CODE CH. 109]

Conversion of Certain Mutual Insurance Companies

[27 Pa.B. 3055]

   The Insurance Department (Department) deletes Chapter 109 (relating to conversion of certain mutual insurance companies) 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 sections 801-A--818-A of The Insurance Company Law of 1921 (40 P. S. §§ 911-A--928-A). 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).


   The purpose of this final-omitted rulemaking is to eliminate obsolete, unnecessary regulations. The regulations were adopted effective October 2, 1976, under the authority of the act of December 10, 1970 (P. L. 884, No. 279) (Act 1970) (40 P. S. §§ 1010.1--1010.14) (now repealed) relating to the conversion of mutual companies. The purpose of the regulations was to implement Act 1970 and facilitate compliance with its provisions. Act 1970 was repealed by section 16(a) of the act of December 21, 1995 (P. L. 714, No. 79). The currently effective requirements for the conversion of mutual companies are found in sections 801-A--818-A of The Insurance Company Law of 1921 known as the Insurance Company Mutual-to-Stock Conversion Act (40 P. S. §§ 911-A--928-A). Therefore, Act 1970 and its regulations have been superseded by the Insurance Company Mutual-to-Stock Conversion Act. Because Chapter 109 implements a statute that is no longer in existence, the regulations are no longer needed.

   Under section 204(3) of the CDL, notice of proposed rulemaking may be omitted if the agency finds that the notice procedures are impracticable and unnecessary. The deletion of Chapter 109 eliminates obsolete regulations that are no longer applicable to conversions of mutual insurance companies. Furthermore, public comments cannot change the obsolete status of the regulations. Accordingly, the Insurance Commissioner finds that the proposed rulemaking procedures in sections 201 and 202 of the CDL (40 P. S. §§ 1201 and 1202) are impracticable and unnecessary in this situation.

Affected Parties

   There are no parties affected by the deletion of the regulations because the regulations were made obsolete by the repeal of Act 1970.

Fiscal Impact

   The deletion of the regulations has no fiscal impact.


   The deletion of the regulations has no impact on paperwork.

Effectiveness/Sunset Date

   This order is effective upon publication in the Pennsylvania Bulletin. No sunset date has been assigned because the order deletes obsolete regulations.

Contact Person

   The person to contact for information on the deletion of these regulations is Stephen Johnson, Director, Bureau of Examinations, 1345 Strawberry Square, Harrisburg, PA 17120 (717) 783-4312.

Regulatory Review

   Under section 5(f) of the Regulatory Review Act (71 P. S. § 745.5(f)), on June 15, 1997, the Department submitted a copy of the rulemaking with proposed rulemaking omitted to the Independent Regulatory Review Commission (IRRC) and the Chairpersons of the Senate Banking and Insurance Committee and the House Insurance Committee. On the same date, the 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, the rulemaking was deemed approved by the Senate and House Committees on June 4, 1997. IRRC met on June 5, 1997, and approved the rulemaking.


   The Insurance Commissioner finds that:

   (1)  There is good cause to delete the regulations effective upon publication. Deferral of the effective date of the deletion of the regulations is impractical or contrary to the public interest under section 204 of the CDL because no purpose is served by deferring the effective date, and an immediate effective date best serves the public interest by deleting unnecessary regulations.

   (2)  There is good cause to forego public notice of the intention to delete Chapter 109 because public notice of the deletion is unnecessary and impractical, for the following reasons:

   (i)  Deletion of the regulations eliminates a rulemaking that is obsolete and no longer applicable to conversions of mutual insurance companies.

   (ii)  Public comment cannot change the fact that the regulations are unnecessary.


   The Insurance Commissioner, acting under the statutory authority, orders that:

   (a)  The regulations of the Department, 31 Pa. Code Chapter 109, are amended by deleting §§ 109.1--109.6 to read as set forth in Annex A.

   (b)  The Department shall submit this order and Annex A to the Office of the 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 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 27 Pa.B. 3000 (June 21, 1997).)

   Fiscal Note:  11-158. No fiscal impact; (8) recommends adoption.

Annex A



CHAPTER 109.  (Reserved)

§§ 109.1--109.6.  (Reserved).

[Pa.B. Doc. No. 97-1026. Filed for public inspection June 27, 1997, 9:00 a.m.]

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