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PA Bulletin, Doc. No. 98-1276

PROPOSED RULEMAKING

INSURANCE DEPARTMENT

[31 PA. CODE CH. 121]

Fees for Out-Of-State Companies

[28 Pa.B. 3805]

   The Insurance Department (Department) proposes to delete Chapter 121 (relating to fees for out-of-State companies) to read 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 section 212 of The Insurance Department Act of 1921 (40 P. S. § 50). The chapter was previously promulgated under section 212 of The Insurance Department Act of 1921 (40 P. S. § 50).

Purpose

   The purpose of the proposed deletion of Chapter 121 is to eliminate a redundant and outdated regulations. Adopted in 1969, the chapter was prescribed to notify insurers domiciled in the Commonwealth of Massachusetts or the State of California of their filing fee responsibilities when making form and rate filings with the Department.

   The chapter provides that when an insurer domiciled in California makes a form or rate filing with the Department, the filing transmittal letter is required to state the fee that the state of California would charge for a similar filing. When the form or rate is approved, the California domiciled insurer is to be billed by the Department for the stated filing fee. With respect to an insurer domiciled in Massachusetts, when an insurer makes a form or rate filing with the Department, the insurer is instructed by the regulation to include with the filing the fee that the Commonwealth of Massachusetts would charge for a similar filing.

   In practice, insurers domiciled in California have been including filing fee checks with all form and rate filings made with the Department. Therefore, the Department no longer bills insurers as provided by Chapter 121.

   In addition to the fact that the regulation is no longer consistent with current filing fee payment practices by California domiciled insurers, the regulation is unnecessary and duplicative for both California and Massachusetts domiciled insurers. Section 212 of The Insurance Department Act of 1921 provides that if fees are imposed by a state on Commonwealth domiciled insurance companies doing business in that state, then like fees, including form and rate filing fees, shall be imposed on insurance companies domiciled in that state doing business in this Commonwealth. Therefore, because insurers domiciled in California or Massachusetts are required by section 212 to pay a form and rate filing fee to the Department as a retaliatory fee if the fees charged by those states for Commonwealth companies exceed the fees charged by the Commonwealth for companies from those other states, Chapter 121 is duplicative and unnecessary for the collection of form and rate filing fees.

Affected Parties

   The proposed deletion of this regulation will apply to insurers domiciled in California or Massachusetts and making form and rate filings with the Department but will not substantially affect these insurers because they must continue to comply with section 212 of The Insurance Department Act of 1921.

Fiscal Impact

   The deletion of these sections will have no fiscal impact on State government, the general public, political subdivisions or the private sector because the deletion of the filing fee requirements does not represent a change from current policy.

Paperwork

   The adoption of this proposed rulemaking will not impose additional paperwork on the Department and the insurance industry because the deletion does not represent a change from current policy.

Effectiveness/Sunset Date

   The proposed rulemaking will become effective upon final adoption and publication in the Pennsylvania Bulletin as final rulemaking. No sunset date has been assigned.

Contact Person

   Questions or comments concerning this proposed rulemaking may be addressed in writing to Peter J. Salvatore, Regulatory Coordinator, 1326 Strawberry Square, Harrisburg, PA 17120, within 30 days of the publication of this proposed rulemaking in the Pennsylvania Bulletin.

Regulatory Review

   Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on July 27, 1998, the Department submitted a copy of this proposed rulemaking to the Independent Regulatory Review Commission (IRRC) and to the Chairpersons of the House Insurance Committee and the Senate Banking and Insurance Committee. In addition to the submitted proposed rulemaking, the Department has provided IRRC and the Committees with a copy of a detailed Regulatory Analysis Form prepared by the Department in compliance with Executive Order 1996-1, ''Regulatory Review and Promulgation.'' A copy of that material is available to the public upon request.

   Under section 5(g) of the Regulatory Review Act, if IRRC has objections to any portion of the proposed rulemaking, it will notify the Department within 10 days of the close of the Committees' review period. The notification shall specify the regulatory review criteria that have not been met by that portion. The Regulatory Review Act specifies detailed procedures for the Depart-ment, the Governor and the General Assembly to review these objections before final publication of the proposal.

M. DIANE KOKEN,   
Insurance Commissioner

   Fiscal Note: 11-172. No fiscal impact; (8) recommends adoption.

Annex A

TITLE 31.  INSURANCE

PART VIII.  MISCELLANEOUS PROVISIONS

CHAPTER 121.  [FEES FOR OUT-OF-STATE COMPANIES] (Reserved)

§ 121.1.  [Applicability] (Reserved).

   [The provisions of §§ 121.2 and 121.3 (relating to fee in home state; and company billed for fee) shall apply to insurance companies domiciled in California and doing business in this Commonwealth. The provisions of § 121.4 (relating to Massachusetts domiciled insurers) shall apply to insurance companies domiciled in Massachusetts and doing business in this Commonwealth.]

§ 121.2.  [Fee in home state] (Reserved).

   [When an insurance company specified in § 121.1 (relating to applicability) submits documents to the Insurance Department, the transmittal letter shall state the appropriate fee in its home state as of the date that the document, form, schedule of rates, classification of risks or insert page is filed in this Commonwealth.]

§ 121.3.  [Company billed for fee] (Reserved).

   [When an individual document has been approved by the Insurance Department, the company submitting the document will be billed for the appropriate fee.]

§ 121.4.  [Massachusetts domiciled insurers] (Reserved).

   [Insurers domiciled in Massachusetts and doing business in this Commonwealth, in submitting or resubmitting to the Insurance Department a policy form, including endorsements, applications and riders filed therewith, and a certificate, endorsement, application or rider filed separate from a policy form, whether subsequently approved or disapproved, shall accompany is transmittal letter with a check payable to the Pennsylvania Insurance Department in the amount of the current Massachusetts filing fee for an accompanying form as of the date of the transmittal letter.]

[Pa.B. Doc. No. 98-1276. Filed for public inspection August 7, 1998, 9:00 a.m.]



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