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COMMONWEALTH OF PENNSYLVANIA

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PA Bulletin, Doc. No. 97-477

PROPOSED RULEMAKING

[31 PA. CODE CH. 111]

Pennsylvania FAIR Plan

[27 Pa.B. 1565]

   The Insurance Department (Department) proposes to delete Chapter 111 (relating to Pennsylvania Fair Plan) as set forth in Annex A, 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 The Pennsylvania Fair Plan Act (act) (40 P. S. §§ 1600.101--1600.502).

Purpose

   The purpose of this proposal is to delete Chapter 111 to eliminate redundant regulations. The Department adopted the regulations more than 20 years ago to implement the act. The act provides for the establishment of an Industry Placement Facility to assure fair access to insurance requirements (FAIR Plan) in order to make available basic property insurance for residential and commercial properties in this Commonwealth.

   The substance of these regulations is sufficiently addressed in the act, and the regulations in no manner enhance the authorizing statute. Therefore, it is found to be redundant, and it is no longer necessary to continue Chapter 111 within the Department regulations.

Affected Parties

   The deletion of this chapter affects property and casualty insurers licensed to do business in this Commonwealth.

Fiscal Impact

   The deletion of this chapter has no fiscal impact because of the redundant relation of the regulations to the act. The regulatory provisions remain in effect under the statute.

Paperwork

   There is no impact on paperwork as a result of the deletion of this chapter.

Effectiveness/Sunset Date

   The rulemaking will become effective upon final publication in the Pennsylvania Bulletin. Because the rulemaking proposes to delete redundant regulations, no sunset date has been assigned.

Contact Person

   Questions or comments regarding this proposed rulemaking may be addressed in writing to Carolyn Montgomery, Director, Bureau of Consumer Services, 1321 Strawberry Square, Harrisburg, PA 17120, (717) 783-2153, within 30 days of its publication in the Pennsylvania Bulletin.

Regulatory Review

   Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on March 14, 1997, the Department submitted a copy of this proposal to the Independent Regulatory Review Commission (IRRC) and the Chairpersons of the House Insurance Committee and the Senate Banking and Insurance Committee. In addition to submitting the proposal, the Department has provided IRRC and the Committees with a copy of a detailed Regulatory Analysis Form prepared by the agency in compliance with Executive Order 1996-1. A copy of the material is available to the public upon request.

   If IRRC has objections to any portion of this proposal, it will notify the agency within 30 days of the close of the public comment period. The notification shall specify the regulatory review criteria that have not been met by that portion. The act specifies detailed procedures for the Department, the Governor and the General Assembly to review these objections before final publication of the proposal.

LINDA S. KAISER,   
Insurance Commissioner

   Fiscal Note:  11-140. No fiscal impact; (8) recommends adoption.

Annex A

TITLE 31.  INSURANCE

PART VII.  PROPERTY, FIRE AND CASUALTY INSURANCE

CHAPTER 111.  [PENNSYLVANIA FAIR PLAN] (Reserved)

§ 111.1.  [Fair Plan Act] (Reserved).

   [The Pennsylvania Fair Plan Act (40 P. S. §§ 1600.101--1600.502) provides for the establishment of an Insurance Placement Facility and the formulation of a Fair Plan in order to make available basic property insurance against loss from fire and certain other perils for residential and commercial properties of this Commonwealth. The insurance value limit is $1.5 million.]

§ 111.2.  [Cancellation notice] (Reserved).

   [Section 202(9) of the Pennsylvania Fair Plan Act (40 P. S. § 1600.202(9)) requires that a written notice be given to a policyholder at least 30 days prior to the cancellation or refusal to renew of a risk eligible under the Fair Plan, except when there is nonpayment of premium or evidence of incendiarism. The notice shall contain an explanation of the procedures available for the policyholder to request an inspection under Section VII of the Fair Plan.]

§ 111.3.  [Endorsements] (Reserved).

   [(a)  The actual endorsement of each property insurance policy issued in this Commonwealth will not be required. It is recommended, however, that an endorsement in the following form or substantially similar be attached to each policy:

It is agreed that insurance provided by this policy on any property which is eligible for coverage in the insurance placement facility of Pennsylvania shall not, except in the case of nonpayment of premium or evidence of incendiarism, be cancelled nor renewal of such insurance refused unless the company shall first have provided at least 30 days prior written notice to the insured of the company's intent to cancel or not to renew, together with an explanation to the insured of the procedure for obtaining an inspection and a policy of basic property insurance from the facility.

   (b)  No endorsements may be issued until they have been approved by the Insurance Department.

   (c)  Bureaus, associations or rating organizations licensed in this Commonwealth may submit to the Insurance Department for approval endorsements on behalf of their respective members.]

§ 111.4.  [Penalties] (Reserved).

   [Failure to provide proper notice shall constitute a violation of the Pennsylvania Fair Plan Act (40 P. S. §§ 1600.101--1600.502) and subject the violator to prosecution by the Insurance Department as provided by law.]

[Pa.B. Doc. No. 97-477. Filed for public inspection March 28, 1997, 9:00 a.m.]



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