Bill Text: PA SB544 | 2009-2010 | Regular Session | Introduced

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Bill Title: An Act amending the act of July 3, 1986 (P.L.396, No.86), entitled "An act requiring notice of rate increases, policy cancellations and nonrenewals by property and casualty insurers," further providing for notices.

Spectrum: Slight Partisan Bill (Democrat 10-6)

Status: (Introduced - Dead) 2009-03-02 - Referred to BANKING AND INSURANCE [SB544 Detail]

Download: Pennsylvania-2009-SB544-Introduced.html

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PRINTER'S NO. 552
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 544 Session of2009
INTRODUCED BY RAFFERTY, TARTAGLIONE, FERLO, BROWNE, WASHINGTON, BRUBAKER, WILLIAMS, ERICKSON, CORMAN, FONTANA, O'PAKE, KITCHEN, COSTA, FARNESE, M. WHITE AND BOSCOLA, MARCH 2, 2009
REFERRED TO BANKING AND INSURANCE, MARCH 2, 2009
AN ACT
Amending the act of July 3, 1986 (P.L.396, No.86), entitled "An
act requiring notice of rate increases, policy cancellations
and nonrenewals by property and casualty insurers," further
providing for notices.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 1 of the act of July 3, 1986 (P.L.396,
No.86), entitled "An act requiring notice of rate increases,
policy cancellations and nonrenewals by property and casualty
insurers," amended June 13, 1995 (P.L.60, No.10), is amended to
read:
Section 1. Notice of increase in premium.
Notwithstanding any other provision of law, a policy of
insurance covering commercial property or casualty risks in this
Commonwealth shall provide for not less than [30] 60 days'
advance notice to the named insured of an increase in renewal
premium. This section shall not apply to policies written on a
retrospective rating plan.
Section 2. Section 3(a) of the act is amended to read:
Section 3. Notice requirements for midterm cancellations and
nonrenewals.
(a) Requirements.--Notices of midterm cancellation and
nonrenewal shall meet the following requirements:
(1) The midterm cancellation or nonrenewal notice shall
be forwarded by registered or first class mail or delivered
by the insurance company directly to the named insured or
insureds.
(2) Written notice of nonrenewal in the manner
prescribed in this section must be forwarded directly to the
named insured or insureds at least [60] 90 days in advance of
the effective date of termination.
(3) Written notice of cancellation in the manner
prescribed in this section must be forwarded directly to the
named insured or insureds at least [60] 90 days in advance of
the effective date of termination unless one or more of the
following exist:
(i) The insured has made a material
misrepresentation which affects the insurability of the
risk, in which case the prescribed written notice of
cancellation shall be forwarded directly to the named
insured at least 15 days in advance of the effective date
of termination.
(ii) The insured has failed to pay a premium when
due, whether the premium is payable directly to the
company or its agents or indirectly under a premium
finance plan or extension of credit, in which case the
prescribed written notice of cancellation shall be
forwarded directly to the named insured at least 15 days
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in advance of the effective date of termination.
(iii) The policy was canceled by the named insured,
in which case written notice of cancellation shall not be
required and coverage shall be terminated on the date
requested by the insured.
Nothing in this paragraph shall restrict the insurer's right
to rescind an insurance policy ab initio upon discovery that
the policy was obtained through fraudulent statements,
omissions or concealment of fact material to the acceptance
of the risk or to the hazard assumed by the company.
(4) The notice shall be clearly labeled "Notice of
Cancellation" or "Notice of Nonrenewal."
(5) A midterm cancellation or nonrenewal notice shall
state the specific reasons for the cancellation or
nonrenewal. The reasons shall identify the condition, factor
or loss experience which caused the midterm cancellation or
nonrenewal. The notice shall provide sufficient information
or data for the insured to correct the deficiency.
(6) A midterm cancellation or nonrenewal notice shall
state that, at the insured's request, the insurer shall
provide loss information to the insured for at least three
years or the period of time during which the insurer has
provided coverage to the insured, whichever is less. Loss
information on the insured shall consist of the following:
(i) Information on closed claims, including date and
description of occurrence, and amount of payments, if
any.
(ii) Information on open claims, including date and
description of occurrence, amount of payment, if any, and
amount of reserves, if any.
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(iii) Information on notices of occurrence,
including date and description of occurrence and amount
of reserves, if any.
(7) The insured's written request for loss information
must be made within ten days of the insured's receipt of the
midterm cancellation or nonrenewal notice. The insurer shall
have 30 days from the date of receipt of the insured's
written request to provide the requested information.
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Section 3. This act shall take effect in 60 days.
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