Bill Text: PA SB1371 | 2011-2012 | Regular Session | Introduced

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Bill Title: Further providing for definitions, for exemptions and for supplemental provisions and rules.

Sponsorship: Slight Partisan Bill (Democrat 4-2)

Status: (Introduced - Dead) 2012-01-03 - Referred to BANKING AND INSURANCE [SB1371 Detail]

Download: Pennsylvania-2011-SB1371-Introduced.html

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PRINTER'S NO. 1882
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 1371 Session of2012
INTRODUCED BY D. WHITE, STACK, EARLL, SOLOBAY, WASHINGTON AND SCHWANK, JANUARY 3, 2012
REFERRED TO BANKING AND INSURANCE, JANUARY 3, 2012
AN ACT
Amending the act of May 17, 1921 (P.L.789, No.285), entitled, as
amended, "An act relating to insurance; establishing an
insurance department; and amending, revising, and
consolidating the law relating to the licensing,
qualification, regulation, examination, suspension, and
dissolution of insurance companies, Lloyds associations,
reciprocal and inter-insurance exchanges, and certain
societies and orders, the examination and regulation of fire
insurance rating bureaus, and the licensing and regulation of
insurance agents and brokers; the service of legal process
upon foreign insurance companies, associations or exchanges;
providing penalties, and repealing existing laws," further
providing for definitions, for exemptions and for
supplemental provisions and rules.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The definitions of "company action level event"
and "life or health insurer" in section 501-A of the act of May
17, 1921 (P.L.789, No.285), known as The Insurance Department
Act of 1921, amended or added June 25, 1997 (P.L.349, No.40) and
July 4, 2008 (P.L.291, No.37), are amended to read:
Section 501-A. Definitions.
The following words and phrases when used in this article
shall have, unless the context clearly indicates otherwise, the
meanings given to them in this section:
* * *
"Company action level event" means one or more of the
following events:
(1) The filing of an RBC report by an insurer that indicates
that:
(i) the insurer's total adjusted capital is greater than or
equal to its regulatory action level RBC but less than its
company action level RBC;
(ii) if a life or health insurer, the insurer has total
adjusted capital that is greater than or equal to its company
action level RBC but less than the product of its authorized
control level RBC and [2.5] 3.0 and has a negative trend; or
(iii) if a property or casualty insurer, the insurer has
total adjusted capital that is greater than or equal to its
company action level RBC but less than the product of its
authorized control level RBC and 3.0 and a trend test result
that triggers regulatory attention, as determined in accordance
with the Trend Test Calculation included in the RBC
instructions.
(2) The notification by the Insurance Commissioner to the
insurer of an adjusted RBC report that indicates an event in
paragraph (1).
* * *
"Life or health insurer" means a stock or mutual insurance
company, association [or], exchange or fraternal benefit society
licensed by the Insurance Department to transact life or
accident and health insurance coverages or both.
* * *
Section 2. Sections 513-A and 514-A of the act, added June
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25, 1997 (P.L.349, No.40), are amended to read:
Section 513-A. Exemptions.--(a) The following insurers are
exempt from this article:
(1) Monoline mortgage guaranty insurers.
(2) Financial guaranty insurers.
(3) Title insurers.
(4) Foreign or alien fraternal benefit societies.
(b) A domestic property or casualty insurer that meets all
of the following conditions is exempt from this article unless
the commissioner makes a specific finding that application of
this article to the insurer is necessary for the commissioner to
carry out statutory responsibilities:
(1) Writes direct business only in this Commonwealth.
(2) Writes direct annual premiums of ten million dollars
($10,000,000) or less or such higher amount as the commissioner
may order in five-year intervals as necessary to reflect the
impact of inflationary factors.
(3) Assumes no reinsurance in excess of five per centum of
direct premium written except for assumed reinsurance of
business directly written in this Commonwealth if the assuming
insurer's total annual net written premium, direct plus assumed
minus ceded, is ten million dollars ($10,000,000) or less.
Section 514-A. Supplemental Provisions; Rules.--(a) The
provisions of this article are supplemental to any other
provisions of the laws of this Commonwealth and shall not
preclude or limit any other powers or duties of the commissioner
under those laws, including, but not limited to, Article V and
31 Pa. Code Ch. 160 (relating to standards to define insurers
deemed to be in hazardous financial condition) and Article XXIV
of the act of May 17, 1921 (P.L.682, No.284), known as "The
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Insurance Company Law of 1921".
(b) The commissioner may adopt regulations necessary for the
implementation of this article.
Section 3. The definition of "company action level event" in
section 501-B of the act, added June 22, 2000 (P.L.457, No.2),
is amended to read:
Section 501-B. Definitions.--The following words and phrases
when used in this article shall have, unless the context clearly
indicates otherwise, the meanings given to them in this section:
* * *
"Company action level event" means any of the following
events:
(1) Filing of an RBC report that indicates that the health
organization's total adjusted capital is greater than or equal
to its regulatory action level RBC but less than its company
action level RBC.
(1.1) Filing of an RBC report that indicates the health
organization's total adjusted capital is greater than or equal
to its company action level RBC but less than the product of its
authorized control level RBC and 3.0 and the health
organization's trend test result triggers regulatory attention,
as determined in accordance with the Trend Test Calculation
included in the RBC instructions.
(2) Notification by the Insurance Department to a health
organization of an adjusted RBC report that indicates an event
under paragraph (1) or (1.1).
* * *
Section 4. This act shall take effect in 60 days.
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