PRINTER'S NO. 1706
No. 1446 Session of 1987
INTRODUCED BY FOSTER, DeLUCA, GEIST, JOHNSON, HALUSKA, DALEY,
DISTLER, BOWSER, J. L. WRIGHT, NOYE, ANGSTADT, KENNEY,
CIVERA, MILLER, DORR, SAURMAN, S. H. SMITH, FARGO, FOX,
STAIRS, BOOK, PHILLIPS, MELIO, BURD AND GODSHALL, JUNE 3,
1987
REFERRED TO COMMITTEE ON TRANSPORTATION, JUNE 3, 1987
AN ACT
1 Amending Title 75 (Vehicles) of the Pennsylvania Consolidated
2 Statutes, providing for a compensation system for persons
3 injured in motor vehicle accidents; requiring insurance for
4 all motor vehicles required to be registered in Pennsylvania;
5 defining compensable damage in motor vehicle accident cases;
6 establishing an assigned claims plan; providing for
7 arbitration; imposing powers and duties on courts, the
8 Department of Transportation and the Insurance Commissioner;
9 prohibiting certain discrimination; and providing penalties.
10 The General Assembly of the Commonwealth of Pennsylvania
11 hereby enacts as follows:
12 Section 1. Chapter 17 of Title 75 of the Pennsylvania
13 Consolidated Statutes is repealed.
14 Section 2. Title 75 is amended by adding a chapter to read:
15 CHAPTER 17
16 FINANCIAL RESPONSIBILITY
17 Subchapter
18 A. Preliminary Provisions
19 B. Right to Benefits
20 C. Tort Liability
1 D. Examination, Treatment and Rehabilitation of
2 Injured Persons
3 E. Insurance
4 F. Penalties
5 G. Miscellaneous Provisions
6 SUBCHAPTER A
7 PRELIMINARY PROVISIONS
8 Sec.
9 1701. Findings and declarations.
10 1702. Definitions.
11 1703. Required motor vehicle insurance.
12 1704. Availability of insurance.
13 1705. Payment of claims for no-fault benefits.
14 1706. Attorney fees and costs.
15 1707. Assigned claims plan.
16 1708. Rates.
17 1709. Motor vehicles in interstate travel.
18 1710. Rights and duties of obligors.
19 § 1701. Findings and declarations.
20 The General Assembly finds and declares as follows:
21 (1) Motor vehicles are the primary instrumentality for
22 the transportation of individuals.
23 (2) The transportation of individuals by motor vehicle
24 over Commonwealth highways and other highways significantly
25 affects intrastate commerce, particularly in metropolitan
26 areas.
27 (3) The maximum feasible restoration of individuals
28 injured and compensation of the economic losses of the
29 survivors of individuals killed in motor vehicle accidents on
30 Commonwealth highways, in intrastate commerce and in activity
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1 affecting intrastate commerce, is essential to the humane and
2 purposeful functioning of commerce.
3 (4) To avoid any undue burden on commerce during the
4 intrastate transportation of individuals, it is necessary and
5 proper to have a Statewide low-cost, comprehensive and fair
6 system of compensating and restoring motor vehicle accident
7 victims and the survivors of deceased victims.
8 (5) Exhaustive studies by the United States Department
9 of Transportation, the Congress of the United States and the
10 General Assembly have determined that the present basic
11 system of motor vehicle accident and insurance law, which
12 makes compensation and restoration contingent upon a victim's
13 showing that someone else was at fault and that the victim
14 was without fault, and upon the person at fault having
15 sufficient liability insurance and other available financial
16 resources to pay for all the losses, is not such a low-cost,
17 comprehensive and fair system.
18 (6) Careful studies, intensive hearings and some State
19 experiments have demonstrated that a low-cost, comprehensive
20 and fair system would be a basic system of motor vehicle
21 accident and insurance law which does all of the following:
22 (i) Assures a victim payment of basic medical and
23 rehabilitation costs and recovery of a reasonable amount
24 of work loss, replacement services loss and survivor's
25 loss.
26 (ii) Eliminates the need to determine fault except
27 when a victim is very seriously injured.
28 (7) Adoption of the system described in paragraph (6) in
29 place of the system described in paragraph (5) would remove
30 an undue burden on commerce.
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1 (8) Throughout this Commonwealth there should be
2 uniformity as to the essential elements of the system of
3 motor vehicle accident and insurance law to avoid the
4 confusion, complexity, uncertainty and chaos which would be
5 engendered by a multiplicity of noncomplementary systems. The
6 need for a basic system does not require that the
7 Commonwealth itself directly administer, operate or direct
8 the administration or operation of the system.
9 (9) A Statewide low-cost, comprehensive and fair system
10 of compensating and restoring motor vehicle accident victims
11 can save and restore the lives of countless victims by
12 providing and paying the cost of services so that a victim
13 has the opportunity to receive prompt and comprehensive
14 professional treatment and be rehabilitated to the point
15 where the victim can return as a useful member of society and
16 a self-respecting and self-supporting citizen.
17 (10) It is necessary to afford required coverages for
18 motor vehicles to economically disadvantaged individuals at
19 rates not so great as to deny these individuals access to
20 insurance which it is necessary for them to have in order to
21 earn income and to be or remain gainfully employed.
22 (11) It is the policy of the General Assembly to
23 establish at reasonable cost to the purchaser of insurance a
24 Statewide system of prompt and adequate basic loss benefits
25 for motor vehicle accident victims and the survivors of
26 deceased victims.
27 § 1702. Definitions.
28 The following words and phrases when used in this chapter
29 shall have the meanings given to them in this section unless the
30 context clearly indicates otherwise:
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1 "Added loss benefits." Benefits provided by added loss
2 insurance under section 1727 (relating to added loss benefits).
3 "Allowable expense."
4 (1) Reasonable charges incurred for or, where no charges
5 are incurred, the reasonable value of reasonably needed and
6 used products, services and accommodations for all of the
7 following:
8 (i) Professional medical treatment and care.
9 (ii) Emergency health services.
10 (iii) Medical and vocational rehabilitation
11 services.
12 (iv) Expenses directly related to the funeral,
13 burial, cremation or other form of disposition of the
14 remains of a deceased victim, not to exceed $1,500.
15 (2) The term does not include that portion of a charge
16 for a room in a hospital, clinic, convalescent home, nursing
17 home or other institution engaged in providing nursing care
18 and related services in excess of a reasonable and customary
19 charge for semiprivate accommodations unless more intensive
20 care is medically required nor any amount includable in work
21 loss, replacement services loss or survivor's loss.
22 "Basic loss benefits." Benefits under this chapter for the
23 net loss sustained by a victim, subject to applicable
24 limitations, exclusions, deductibles, waiting periods,
25 disqualifications and other terms and conditions. The term does
26 not include benefits for damage to property or benefits for net
27 loss sustained by an operator or passenger of a motorcycle.
28 "Commissioner." The Insurance Commissioner of the
29 Commonwealth.
30 "Deceased victim." A victim suffering death resulting from
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1 injury.
2 "Department." The Department of Transportation of the
3 Commonwealth.
4 "Emergency health services." Services which are necessary to
5 mitigate injury to a victim during the period immediately and
6 proximately following an accident, including, but not limited
7 to, communications, transportation and treatment by medical and
8 paramedical personnel, and which are supplied or provided by a
9 person accredited or certified by an emergency health services
10 system.
11 "Emergency health services system." A system which provides
12 for the arrangement of personnel, facilities and equipment for
13 the effective and coordinated delivery in an appropriate
14 geographical area of health care services under emergency
15 conditions arising out of the maintenance or use of a motor
16 vehicle; which is administered by a public or nonprofit private
17 entity that has the authority and the resources to provide
18 effective administration; and which is operating in accordance
19 with applicable requirements, conditions and regulations.
20 "Government." The Federal Government, a state, a political
21 subdivision or an instrumentality of two or more states. The
22 term includes an agency of a government and a corporation or
23 other association organized by a government for the execution of
24 a government program and subject to control by a government or
25 organized under an interstate compact or international treaty.
26 "Injury." Accidentally sustained bodily harm to an
27 individual which results in that individual's illness, disease
28 or death.
29 "Insurance." A contract, self-insurance or other legally
30 binding obligation to pay or provide no-fault benefits or
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1 required tort liability.
2 "Insured." One of the following:
3 (1) An individual identified by name as an insured in a
4 contract of basic loss insurance complying with this chapter.
5 (2) A spouse or other relative of a named insured, a
6 minor in the custody of a named insured or a minor in the
7 custody of a relative of a named insured if all of the
8 following apply:
9 (i) The spouse, relative or minor is not identified
10 by name as an insured in any other contract of basic
11 restoration insurance complying with this chapter.
12 (ii) The spouse, relative or minor is in residence
13 in the same household with a named insured. An individual
14 is in residence in the same household if the individual
15 usually makes his home in the same family unit, even
16 though the individual temporarily lives elsewhere.
17 "Insurer." A legally constituted entity, other than a self-
18 insurer or an obligated government, which is authorized under
19 state law to provide security covering a motor vehicle in the
20 state.
21 "Loss." Accrued economic detriment resulting from injury
22 arising out of the maintenance or use of a motor vehicle
23 consisting of and limited to allowable expense, work loss,
24 replacement services loss and survivor's loss.
25 "Loss of income." Gross income that is actually lost by a
26 victim or that would have been lost but for an income
27 continuation plan, reduced by all of the following:
28 (1) Eighty percent of income which the individual earns
29 from substitute work.
30 (2) Income which the individual would have earned in
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1 available substitute work the individual was capable of
2 performing but unreasonably failed to undertake.
3 (3) Income which the individual would have earned by
4 hiring an available substitute to perform self-employment
5 services but unreasonably failed to do.
6 "Maintenance or use of a motor vehicle." Maintenance or use
7 of a motor vehicle as a vehicle, including, incident to its
8 maintenance or use as a vehicle, occupying, entering into or
9 alighting from it. The term does not include the following:
10 (1) Conduct within the course of a business of
11 repairing, servicing or otherwise maintaining motor vehicles
12 unless the conduct occurs off the business premises.
13 (2) Conduct in the course of loading or unloading a
14 motor vehicle unless the conduct occurs while occupying,
15 entering into or alighting from it.
16 "Medical and vocational rehabilitation services." Services
17 necessary to reduce disability and to restore the physical,
18 psychological, social and vocational functioning of a victim.
19 The term includes, but is not limited to, medical care,
20 diagnostic and evaluation procedures, physical and occupational
21 therapy, other necessary therapies, speech pathology and
22 audiology, optometric services, nursing care under the
23 supervision of a registered nurse, medical social services,
24 vocational rehabilitation and training services, occupational
25 licenses and tools and transportation where necessary to secure
26 medical and vocational rehabilitation services.
27 "Motor vehicle." A vehicle of a kind required to be
28 registered under this title.
29 "Net loss." Loss less benefits or advantages required to be
30 subtracted from loss in calculating net loss under this chapter.
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1 "Noneconomic detriment." Pain, suffering, inconvenience,
2 physical impairment and other nonpecuniary damage recoverable
3 under the tort law applicable to injury arising out of the
4 maintenance or use of a motor vehicle. The term does not include
5 punitive or exemplary damages.
6 "No-fault benefits." Basic loss benefits, added loss
7 benefits, or both.
8 "No-fault insurance." Basic loss insurance, added loss
9 insurance, or both.
10 "Obligor." An insurer, self-insurer or obligated government
11 providing no-fault benefits under this chapter.
12 "Owner." A person that owns or has title to a motor vehicle
13 or is entitled to the use and possession of a motor vehicle
14 subject to a security interest held by another. The term
15 includes a lessee of a motor vehicle having the right to
16 possession under a lease with option to purchase. The term does
17 not include a lienholder or secured party that owns or has title
18 to a motor vehicle or is entitled to possession of a motor
19 vehicle.
20 "Replacement services loss." Expenses reasonably incurred in
21 obtaining ordinary and necessary services in lieu of those the
22 victim would have performed not for income but for the benefit
23 of the victim or the victim's family if the victim had not been
24 injured.
25 "Secretary." The Secretary of Transportation of the
26 Commonwealth.
27 "Secured vehicle." A motor vehicle for which security is
28 provided under section 1703 (relating to required motor vehicle
29 insurance).
30 "Security." The security which is provided in under section
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1 1703.
2 "Self-insurer." An owner or any person providing security
3 under section 1703(b) or (c).
4 "State." A state of the United States, the District of
5 Columbia, Guam or the Virgin Islands.
6 "State vocational rehabilitation agency." The agency in the
7 Commonwealth which administers the Commonwealth plan for
8 vocational rehabilitation services under section 5 of the
9 Vocational Rehabilitation Act (41 Stat. 735, 29 U.S.C. § 35).
10 "Survivor." A spouse, child, parent, brother, sister or
11 relative dependent upon the deceased for support.
12 "Survivor's loss." The loss of income of a deceased victim
13 which would probably have been contributed to survivors if the
14 victim had not sustained the fatal injury and replacement
15 services loss reduced by expenses which the survivors would
16 probably have incurred but avoided by reason of the victim's
17 death resulting from injury.
18 "Victim." An individual who suffers injury arising out of
19 the maintenance or use of a motor vehicle.
20 "Without regard to fault." Irrespective of fault as a cause
21 of injury.
22 "Work loss." The loss of gross income of a victim, as
23 calculated under section 1725 (relating to work loss), and
24 reasonable expenses of a victim for hiring a substitute to
25 perform self-employment services, thereby mitigating loss of
26 income, or for hiring special help, thereby enabling a victim to
27 work and mitigate loss of income.
28 § 1703. Required motor vehicle insurance.
29 (a) Security.--An owner of a motor vehicle which is
30 registered or which is operated in this Commonwealth by the
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1 owner or with the owner's permission shall continuously provide
2 security covering the motor vehicle while the vehicle is either
3 present or registered in this Commonwealth. A person may provide
4 security by a contract of insurance with an insurer or by
5 qualifying as a self-insurer or as an obligated government.
6 Security shall be provided for the payment of all of the
7 following:
8 (1) Basic loss benefits up to a maximum of $1,000,000
9 per individual.
10 (2) Sums, up to a maximum of $30,000 in total and
11 $15,000 per individual, which the owner or a person operating
12 the vehicle with the express or implied permission of the
13 owner may become liable to pay as damages because of bodily
14 injury or death arising out of a single accident.
15 (3) Damages, up to a maximum of $5,000, for injury to or
16 destruction of property in a single accident.
17 (b) Self-insurance.--Self-insurance, subject to approval of
18 the commissioner and the department, is effected by filing all
19 of the following with the department in satisfactory form:
20 (1) A continuing undertaking by the owner or other
21 appropriate person to pay basic restoration benefits and to
22 discharge tort liability in amounts not less than those
23 required by subsection (a), to perform obligations imposed by
24 this chapter and to elect to pay added restoration benefits
25 as specified in the undertaking.
26 (2) Evidence that appropriate provision exists for
27 prompt and efficient administration of claims, benefits and
28 obligations under this chapter.
29 (3) Evidence that reliable financial arrangements,
30 deposits, resources or commitments exist providing assurance
19870H1446B1706 - 11 -
1 substantially equivalent to that afforded by a contract of
2 insurance complying with this chapter for payment of no-fault
3 benefits, discharge of tort liability and performance of
4 other obligations imposed by this chapter.
5 (c) Obligated government.--A government may provide security
6 with respect to a motor vehicle owned or operated by it by
7 lawfully obligating itself to pay basic restoration benefits
8 under this chapter and added restoration benefits as specified
9 in the undertaking.
10 (d) Obligations upon termination of security.--An owner of a
11 motor vehicle who ceases to maintain the security required by
12 this section shall immediately surrender the registration
13 certificate and license plates for the vehicle to the department
14 and may not operate or permit operation of the vehicle in this
15 Commonwealth until security has again been furnished as required
16 by this section. A person other than the owner who ceases to
17 maintain security shall immediately notify the owner and the
18 department, and the owner may not operate or permit operation of
19 the vehicle until security has again been furnished. An insurer
20 who has issued a contract of insurance and knows or has reason
21 to believe the contract is for the purpose of providing security
22 shall immediately give notice to the department of the
23 termination of the insurance. If a self-insurer knows that the
24 conditions for self-insurance have ceased to exist, the self-
25 insurer shall immediately give notice thereof to the department.
26 The requirements of this subsection may be modified or waived by
27 the department.
28 § 1704. Availability of insurance.
29 (a) General rule.--
30 (1) The commissioner shall implement a plan assuring
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1 that required no-fault benefits and tort liability coverages
2 for motor vehicles will be conveniently and expeditiously
3 available, subject only to payment or provisions for payment
4 of the premium, to individuals who cannot conveniently obtain
5 insurance through ordinary methods at rates not in excess of
6 those applicable to similarly situated individuals under the
7 plan. The plan may provide reasonable means for the transfer
8 of individuals insured under the plan into the ordinary
9 market, at the same or lower rates, under regulations
10 established by the commissioner. The plan may be implemented
11 by assignment of applicants among insurers, pooling, joint
12 insuring or reinsuring arrangement or another method if the
13 implementation results in applicants being conveniently
14 afforded the insurance coverages on reasonable and not
15 unfairly discriminatory terms.
16 (2) The plan shall make available added loss benefits
17 and tort liability coverage together with other contract
18 provisions which the commissioner determines are reasonably
19 needed by applicants and are commonly afforded in voluntary
20 markets. The plan shall also assure that there is available
21 to applicants adequate premium financing or provision for the
22 installment payment of premiums subject to customary terms
23 and conditions.
24 (3) Insurers writing no-fault benefits and tort
25 liability coverages in this Commonwealth shall participate in
26 the plan. The plan shall provide for equitable apportionment,
27 among all participating insurers writing insurance coverage
28 required under the plan, of the financial burdens of
29 insurance provided to applicants under the plan and of the
30 costs of operation of the plan.
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1 (4) Subject to the supervision and approval of the
2 commissioner, insurers may consult and agree with each other
3 and with other appropriate persons as to the organization,
4 administration and operation of the plan and as to rates and
5 rate modifications for insurance coverages provided under the
6 plan. Rates and rate modifications adopted or charged for
7 insurance coverages provided under the plan shall be approved
8 by the commissioner and shall be reasonable and not unfairly
9 discriminatory among similarly situated applicants for
10 insurance under regulations promulgated by the commissioner.
11 (5) To carry out the objectives of this subsection, the
12 commissioner may promulgate regulations, make orders, enter
13 into agreements with other governmental and private entities
14 and individuals and form and operate or authorize the
15 formation and operation of bureaus and other entities.
16 (b) Cancellation, refusal to renew or other termination of
17 insurance.--Cancellation, refusal to renew and other termination
18 of insurance shall be provided for under the act of June 5, 1968
19 (P.L.140, No.78), entitled "An act regulating the writing,
20 cancellation of or refusal to renew policies of automobile
21 insurance; and imposing powers and duties on the Insurance
22 Commissioner therefor."
23 § 1705. Payment of claims for no-fault benefits.
24 (a) General rule.--
25 (1) No-fault benefits are payable monthly as loss
26 accrues. Loss accrues not when injury occurs but as allowable
27 expense, work loss, replacement services loss or survivor's
28 loss is sustained.
29 (2) No-fault benefits are overdue if not paid within 30
30 days after the receipt by the obligor of submission of
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1 reasonable proof of the fact and amount of loss sustained
2 unless the obligor designates, upon receipt of an initial
3 claim for no-fault benefits, periods not to exceed 31 days
4 each for accumulating claims received within the period. In
5 this case benefits are overdue if not paid within 15 days
6 after the close of each period. If reasonable proof is
7 supplied as to only part of a claim, but the part amounts to
8 $100 or more, benefits for that part are overdue if not paid
9 within the time mandated by this paragraph. An obligation for
10 basic loss benefits for an item of allowable expense may be
11 discharged by the obligor by reimbursing the victim or by
12 making direct payment to the supplier or provider of
13 products, services or accommodations within the time mandated
14 by this paragraph. Overdue payments bear interest at the rate
15 of 18% annually.
16 (3) A claim for no-fault benefits shall be paid without
17 deduction for the benefits or advantages which are to be
18 subtracted from loss in calculating net loss if the benefits
19 or advantages have not been paid or provided to the claimant
20 prior to the date the no-fault benefits are overdue or the
21 no-fault benefits claim is paid. The obligor is entitled to
22 recover reimbursement from the person obligated to pay or
23 provide benefits or advantages or from the claimant who
24 actually receives them.
25 (4) An obligor may bring an action to recover
26 reimbursement for no-fault benefits which are paid upon the
27 basis of an intentional misrepresentation of a material fact
28 by a claimant or a supplier or provider of an item of
29 allowable expense if the obligor reasonably relied upon
30 misrepresentation. The action may be brought only against the
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1 supplier or provider unless the claimant has intentionally
2 misrepresented the facts or unless the claimant knew of the
3 misrepresentation. An obligor may offset amounts the obligor
4 is entitled to recover from the claimant under this paragraph
5 against no-fault benefits otherwise due.
6 (5) An obligor who rejects a claim for basic loss
7 benefits shall give to the claimant written notice of the
8 rejection promptly, but in no event more than 30 days after
9 the receipt of reasonable proof of the loss. Notice shall
10 specify the reason for rejection and inform the claimant of
11 the terms and conditions of the right to obtain an attorney.
12 If a claim is rejected for a reason other than that the
13 person is not entitled to basic loss benefits claimed, the
14 written notice shall inform the claimant that the claim may
15 be held with the assigned claims bureau and shall give the
16 name and address of the bureau.
17 (b) Release or settlement of claim.--
18 (1) Except as otherwise provided in this subsection, no-
19 fault benefits may not be denied or terminated because the
20 victim executed a release or other settlement agreement. If
21 the reasonably anticipated net loss does not exceed $2,500, a
22 claim for no-fault benefits may be discharged by a settlement
23 agreement for an agreed amount payable in installments or in
24 a lump sum. If the reasonably anticipated net loss exceeds
25 $2,500, a claim may be discharged by a settlement to the
26 extent authorized by law upon a finding by a court of
27 competent jurisdiction that the settlement is in the best
28 interest of the claimant and beneficiaries of the claimant
29 and that the claimant understands and consents to the
30 settlement and upon payment by the obligor of the costs of
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1 the proceeding, including a reasonable attorney fee based
2 upon actual time expended. Costs may not be charged to or
3 deducted from the proceeds of the settlement. Upon approval
4 of the settlement, the court may make appropriate orders
5 concerning the safeguarding and disposing of the proceeds of
6 the settlement and may direct, as a condition of the
7 settlement agreement, that the obligor pay the reasonable
8 cost of appropriate future medical and vocational
9 rehabilitation services.
10 (2) A settlement agreement for an amount payable in
11 installments shall be modified as to amounts to be paid in
12 the future if it is shown that a material and substantial
13 change of circumstances has occurred or that there is newly-
14 discovered evidence concerning the claimant's physical
15 condition, loss or rehabilitation which could not have been
16 known previously or discovered in the exercise of reasonable
17 diligence.
18 (3) A settlement agreement may be set aside if it is
19 procured by fraud or if its terms are unconscionable.
20 (c) Time limitations on actions to recover benefits.--
21 (1) If no-fault benefits have not been paid for loss
22 arising otherwise than from death, an action for the benefits
23 may be commenced not later than two years after the victim
24 suffers the loss and knows, or, in the exercise of reasonable
25 diligence, should have known, that the loss was caused by the
26 accident, or not later than four years after the accident,
27 whichever is earlier. If no-fault benefits have been paid for
28 loss arising otherwise than from death, an action for further
29 benefits other than survivor's benefits may be commenced not
30 later than two years after the last payment of benefits.
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1 (2) If no-fault benefits have not been paid to the
2 deceased victim or the victim's survivor, an action for
3 survivor's benefits may be commenced not later than one year
4 after the death or four years after the accident from which
5 death results, whichever is earlier. If survivor's benefits
6 have been paid to a survivor, an action for further
7 survivor's benefits may be commenced not later than two years
8 after the last payment of benefits. If no-fault benefits have
9 been paid for loss suffered by a deceased victim before
10 death, an action for survivor's benefits may be commenced not
11 later than one year after the death or six years after the
12 last payment of benefits, whichever is earlier.
13 (3) If timely action for basic restoration benefits is
14 commenced against an obligor and benefits are denied because
15 of a determination that the obligor's coverage is not
16 applicable to the claimant under the provisions of section
17 1724 (relating to source of basic restoration benefits), an
18 action against the applicable obligor or the obligor to whom
19 a claim is assigned under an assigned claims plan may be
20 commenced not later than 60 days after the determination
21 becomes final or the last date on which the action could
22 otherwise have been commenced, whichever is later.
23 (4) Except as paragraph (1), (2) or (3) prescribes a
24 longer period, an action by a claimant on an assigned claim
25 which has been timely presented under section 1707 (relating
26 to assigned claims plan) may not be commenced more than 60
27 days after the claimant receives written notice of rejection
28 of the claim by the obligor to which it was assigned.
29 (5) If a person entitled to no-fault benefits is under a
30 legal disability when the right to bring an action for the
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1 benefits accrues, the period of the disability shall not be a
2 part of the time limited for commencement of the action.
3 (d) Assignment of benefits.--An assignment of or an
4 agreement to assign a right under this chapter for loss accruing
5 in the future is unenforceable except as to benefits for one of
6 the following:
7 (1) Work loss to secure payment of alimony, maintenance
8 or child support.
9 (2) Allowable expense to the extent the benefits are for
10 the cost of products, services or accommodations provided or
11 to be provided by the assignee.
12 (e) Deduction and setoff.--Except as otherwise provided in
13 this chapter, basic loss benefits shall be paid without
14 deduction or setoff.
15 (f) Exemption of benefits.--
16 (1) No-fault benefits for allowable expense are exempt
17 from garnishment, attachment, execution and other process or
18 claim, except upon the claim of a creditor who has provided
19 products, services or accommodations to the extent benefits
20 are for allowable expense for those products, services or
21 accommodations.
22 (2) Basic loss benefits other than those for allowable
23 expense are exempt from garnishment, attachment, execution
24 and other process or claim to the extent the benefits are
25 attributable to loss sustained within the first 60 days
26 following the accident resulting in injury. Other basic loss
27 benefits except for items of allowable expense are exempt to
28 the extent that wages or earnings are exempt under applicable
29 law exempting wages or earnings from process or claims.
30 § 1706. Attorney fees and costs.
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1 (a) Claimant.--If overdue no-fault benefits are paid by the
2 obligor after receipt by the obligor of notice of representation
3 of a claimant in connection with a claim or action for the
4 payment of no-fault benefits, a reasonable attorney fee based on
5 actual time expended shall be paid by the obligor to the
6 attorney. No part of the attorney fee for representing the
7 claimant in connection with the claim or action for no-fault
8 benefits may be charged or deducted from benefits otherwise due
9 to the claimant, and no part of the benefits may be applied to
10 the fee. If, in an action by a claimant to recover no-fault
11 benefits from an obligor, the court determines that the obligor
12 has denied the claim or a significant part of the claim without
13 reasonable foundation, the court may award the claimant's
14 attorney a reasonable fee based upon actual time expended.
15 (b) Obligor.--If, in an action by a claimant to recover no-
16 fault benefits from an obligor, the court determines that the
17 claim or a significant part of the claim is fraudulent or so
18 excessive as to have no reasonable foundation, the court may
19 award the obligor's attorney a reasonable fee based upon actual
20 time expended. The court may direct that the fee shall be paid
21 by the claimant or that the fee may be treated in whole or in
22 part as an offset against benefits due the claimant.
23 § 1707. Assigned claims plan.
24 (a) Benefits.--
25 (1) For an accident resulting in injury that occurs on
26 or after the effective date of this chapter, a victim or the
27 survivor of a deceased victim may obtain basic benefits
28 through the assigned claims plan established under subsection
29 (b), if one of the following applies:
30 (i) Basic loss incurred is not applicable to the
19870H1446B1706 - 20 -
1 injury for a reason other than those specified in section
2 1728 (relating to ineligible claimants).
3 (ii) Basic loss incurred is not applicable to the
4 injury because the victim converted a motor vehicle while
5 the victim was under 15 years of age.
6 (iii) Basic loss incurred applicable to the injury
7 cannot be identified.
8 (iv) Basic loss incurred applicable to the injury is
9 inadequate to provide the contracted-for benefits because
10 of financial inability of an obligor to fulfill its
11 obligations.
12 (v) Basic loss incurred benefits are refused by an
13 obligor for a reason other than that the individual is
14 not entitled in accordance with this chapter to receive
15 the basic loss benefits claimed.
16 (2) If a claim qualifies for assignment under paragraph
17 (1)(iii), (iv) or (v), the assigned claims bureau or an
18 insurer to whom the claim is assigned is subrogated to the
19 rights of the claimant against the obligor obligated to
20 provide basic benefits to the claimant for the benefits
21 provided by the assignee.
22 (3) If an individual receives basic loss benefits
23 through the assigned claims plan for a reason other than
24 because of the financial inability of an obligor to fulfill
25 its obligation, the benefits or advantages that the
26 individual receives or is entitled to receive as a result of
27 the injury, other than life insurance benefits or benefits by
28 way of succession at death or in discharge of familial
29 obligations of support, shall be subtracted from loss in
30 calculating net loss.
19870H1446B1706 - 21 -
1 (4) An assigned claim of an individual who does not
2 comply with the requirement of providing security for the
3 payment of basic restoration benefits or of an individual as
4 to whom the security is invalidated because of the
5 individual's fraud or willful misconduct is subject to all of
6 the following:
7 (i) The maximum optional deductibles and exclusions
8 required to be offered.
9 (ii) A deduction in the amount of $500 for each year
10 or part thereof of the period of the individual's
11 continuous failure to provide security, applicable to
12 benefits otherwise payable except basic benefits for
13 allowable expense.
14 (b) Establishment.--
15 (1) Obligors other than self insurers and governments
16 providing basic loss insurance in this Commonwealth shall
17 organize and maintain, subject to approval and regulation by
18 the commissioner, an assigned claims bureau and an assigned
19 claims plan and adopt rules for their operation and for
20 assessment of costs on a fair and equitable basis consistent
21 with this chapter. If a bureau and plan are not organized and
22 maintained in a manner considered by the commissioner to be
23 consistent with this chapter, the commissioner shall organize
24 and maintain an assigned claims bureau and an assigned claims
25 plan. Each obligor insurer providing basic loss insurance in
26 this Commonwealth shall participate in the assigned claims
27 bureau and the assigned claims plan. Costs incurred shall be
28 allocated fairly and equitably among the obligors.
29 (2) The assigned claims bureau shall promptly do all of
30 the following:
19870H1446B1706 - 22 -
1 (i) Assign claims for no-fault benefits to an
2 assignee who shall be a participating insurer.
3 (ii) Notify the claimant of the identity and address
4 of the assignee.
5 (3) Claims shall be assigned so as to minimize
6 inconvenience to claimants. The assignee has rights and
7 obligations as if the assignee had issued a policy of basic
8 loss insurance complying with this chapter applicable to the
9 injury or, in a case involving the financial inability of an
10 obligor to perform its obligations, as if the assignee had
11 written the applicable basic restoration insurance,
12 undertaken the self-insurance or lawfully obligated itself to
13 pay basic loss benefits.
14 (c) Time for presenting claims.--
15 (1) Except as provided in paragraph (2), an individual
16 authorized to obtain basic loss benefits through the assigned
17 claims plan shall notify the assigned claims bureau of a
18 claim within the time that would have been allowed under
19 section 1705(c) (relating to payment of claims for no-fault
20 benefits) for commencing an action for basic loss benefits
21 against an obligor in a case in which identifiable no-fault
22 insurance coverage was in effect and applicable to the claim.
23 (2) If timely action for basic loss benefits is
24 commenced against an obligor who is unable to fulfill
25 obligations because of financial inability, an individual
26 authorized to obtain basic loss benefits through the assigned
27 claims plan shall notify the bureau of the claim within six
28 months after discovery of financial inability.
29 § 1708. Rates.
30 (a) General rule.--The commissioner shall regulate obligors
19870H1446B1706 - 23 -
1 providing security. The rates charged for security shall be
2 established, determined and modified only in accordance with the
3 provisions of the applicable rating law of this Commonwealth.
4 (b) Public information.--The commissioner shall provide the
5 means to inform purchasers of insurance, in a manner adequate to
6 permit them to compare prices, about rates being charged by
7 insurers for no-fault benefits and tort liability coverage.
8 (c) Accountability program.--
9 (1) The commissioner, through the State vocational
10 rehabilitation agency, shall establish and maintain a program
11 for the regular and periodic evaluation of medical and
12 vocational rehabilitation services for which reimbursement or
13 payment is sought from an obligor as an item of allowable
14 expense to assure all of the following:
15 (i) Services are medical and vocational
16 rehabilitation services.
17 (ii) The recipient of the services is making
18 progress toward a greater level of independent
19 functioning, and the services are necessary to such
20 progress and continued progress.
21 (iii) The charges for the services for which
22 reimbursement or payment is sought are fair and
23 reasonable.
24 (2) Progress reports shall be made periodically in
25 writing on each case for which reimbursement or payment is
26 sought under security for the payment of basic loss benefits.
27 Reports shall be prepared by the supervising physician or
28 rehabilitation counselor and submitted to the State
29 vocational rehabilitation agency. The State vocational
30 rehabilitation agency shall file reports with the applicable
19870H1446B1706 - 24 -
1 obligor. Pursuant to this program, there shall be provision
2 for determinations to be made in writing of the
3 rehabilitation goals and needs of the victim and for the
4 periodic assessment of progress at reasonable time intervals
5 by the supervising physician or rehabilitation counselor.
6 (3) The commissioner may establish and maintain a
7 program for the regular and periodic evaluation of this
8 Commonwealth's no-fault plan for motor vehicle insurance.
9 (d) Availability of services.--The commissioner may
10 coordinate with appropriate government agencies in the creation
11 and maintenance of an emergency health services system and take
12 steps necessary to assure that emergency health services are
13 available for each victim suffering injury in this Commonwealth.
14 The commissioner may take steps necessary to assure that medical
15 and vocational rehabilitation services are available for each
16 victim who is a resident of this Commonwealth. Steps may
17 include, but are not limited to, guarantees of loans or other
18 obligations of suppliers or providers of services and support
19 for training programs for personnel in programs and facilities
20 offering services.
21 § 1709. Motor vehicles in interstate travel.
22 (a) General rule.--An owner who has complied with the
23 requirements of security shall be deemed to have complied with
24 the requirements for security in states in which the vehicle is
25 operating.
26 (b) Conforming coverage.--
27 (1) An obligor providing security for the payment of
28 basic loss benefits is obligated to provide, and each
29 contract of insurance for the payment of basic loss benefits
30 shall be construed to contain, coverage sufficient to satisfy
19870H1446B1706 - 25 -
1 the requirements for security covering a motor vehicle in a
2 state where a victim or a survivor of a deceased victim is
3 domiciled or where a victim is injured.
4 (2) An obligor providing security for the payment of
5 basic loss benefits shall include, in each contract of
6 insurance for the payment of basic loss benefits, coverage to
7 protect the owner of a motor vehicle from tort liability to
8 which the owner is exposed through application of the law of
9 a state in which the motor vehicle may be operated and which
10 arises out of the ownership, maintenance or use of a motor
11 vehicle.
12 (c) Applicable law.--
13 (1) The basic loss benefits available to a victim or
14 survivor of a deceased victim shall be determined pursuant to
15 the provisions of the state no-fault plan for motor vehicle
16 insurance in effect in the state of domicile of the victim on
17 the date when the motor vehicle accident resulting in injury
18 occurs. If there is no state no-fault plan in effect or if
19 the victim is not domiciled in a state, then basic loss
20 benefits available to the victim shall be determined pursuant
21 to the provisions of the state no-fault plan for motor
22 vehicle insurance in effect in the state in which the
23 accident resulting in injury occurs.
24 (2) The right of a victim or of a survivor of a deceased
25 victim to sue in tort shall be determined by the law of the
26 state of domicile of the victim. If a victim is not domiciled
27 in a state, the right to sue shall be determined by the law
28 of the state in which the accident resulting in injury or
29 damage to property occurs.
30 § 1710. Rights and duties of obligors.
19870H1446B1706 - 26 -
1 (a) Reimbursement and subrogation.--
2 (1) Except as provided in paragraphs (2) and (3), all of
3 the following apply:
4 (i) An obligor does not have, and may not contract
5 for, a right of reimbursement from or subrogation to the
6 proceeds of a victim's claim for relief or a right of
7 subrogation to a victim's cause of action for noneconomic
8 detriment.
9 (ii) An obligor may not contract for any right of
10 reimbursement based upon a determination of fault from
11 another obligor not acting as a reinsurer for no-fault
12 benefits which it has paid or is obligated to pay as a
13 result of injury to a victim.
14 (2) If an individual who receives or is entitled to
15 receive no-fault benefits for an injury has a claim or cause
16 of action against another person who caused the injury, based
17 upon a determination of fault, and if the obligor has paid or
18 become obligated to pay accrued or future no-fault benefits
19 in excess of the minimum basic loss benefits required under
20 this chapter, the obligor shall be subrogated to the rights
21 of the claimant only for elements of damage compensated for
22 by security for the payment of no-fault benefits in excess of
23 the minimum basic loss benefits required under this chapter.
24 (3) Nothing in this subsection precludes a person
25 supplying or providing products, services or accommodations
26 from contracting or otherwise providing for a right of
27 reimbursement to basic restoration benefits for allowable
28 expense.
29 (4) An entity providing benefits other than no-fault
30 benefits to an individual as described in section 1723
19870H1446B1706 - 27 -
1 (relating to collateral benefits) does not have a right of
2 subrogation with respect to the benefits.
3 (b) Duty to pay basic loss benefits.--An obligor providing
4 security for the payment of basic loss benefits shall pay or
5 provide benefits without regard to fault to each individual
6 entitled to the benefits under this chapter.
7 (c) Indemnity.--An obligor has a right of indemnity against
8 an individual who has converted a motor vehicle involved in an
9 accident, or against an individual who has intentionally injured
10 himself or another individual, for no-fault benefits paid for
11 all of the following:
12 (1) The loss caused by the conduct of that individual.
13 (2) The cost of processing the claims for the benefits.
14 (3) The cost of enforcing this right of indemnity,
15 including reasonable attorney fees.
16 (d) Referral for rehabilitation services.--The obligor shall
17 promptly refer a victim to whom basic benefits are expected to
18 be payable for more than two months to the State vocational
19 rehabilitation agency.
20 SUBCHAPTER B
21 RIGHT TO BENEFITS
22 Sec.
23 1721. Right to basic loss benefits.
24 1722. Basic loss benefits.
25 1723. Collateral benefits.
26 1724. Source of basic restoration benefits.
27 1725. Work loss.
28 1726. Net loss.
29 1727. Added loss benefits.
30 1728. Ineligible claimants.
19870H1446B1706 - 28 -
1 1729. Other provisions.
2 § 1721. Right to basic loss benefits.
3 (a) Accident within this Commonwealth.--If the accident
4 resulting in injury occurs in this Commonwealth, a victim or a
5 survivor of a deceased victim is entitled to receive basic loss
6 benefits under this chapter.
7 (b) Accident outside this Commonwealth.--If the accident
8 resulting in injury occurs outside this Commonwealth, a victim
9 or a survivor of a deceased victim is entitled to receive basic
10 loss benefits if the victim was one of the following:
11 (1) An insured.
12 (2) The driver or other occupant of a secured vehicle.
13 § 1722. Basic loss benefits.
14 (a) Allowable expense limits.--Allowable expense shall be
15 provided, or the equivalent of allowable expenses shall be
16 provided, in the form of a contract to provide required
17 services.
18 (b) Work loss limits.--Work loss shall be provided for
19 amounts, selected by the insured, not to exceed after-tax
20 earnings as reported to the Internal Revenue Service for Federal
21 income tax purposes.
22 (c) Deductibles and waiting period.--Allowable expense and
23 work loss may include provisions to provide a deductible not to
24 exceed $1,000 for each individual or, with respect to work loss
25 services only, to provide a waiting period not to exceed 30
26 days. The deductible or waiting period shall be elected, in
27 writing, upon a form approved by the commissioner. If elected,
28 the deductible or waiting period shall be effective only against
29 the named insured and the named insured's family.
30 (d) Exclusion.--A basic loss obligor is not obligated to
19870H1446B1706 - 29 -
1 provide basic loss benefits for allowable expense for medical
2 and vocational rehabilitation services unless the facility in
3 which or through which the services are provided has been
4 accredited by the Department of Health, or the equivalent
5 governmental agency responsible for health programs in the state
6 in which the services are provided, as being in accordance with
7 applicable requirements and regulations.
8 § 1723. Collateral benefits.
9 (a) General rule.--If benefits, other than no-fault
10 benefits, for a victim or the survivor of a deceased victim are
11 provided to an individual through a program, group, contract or
12 other arrangement for which some other person pays, in whole or
13 in part, then a reduction or savings, resulting from the
14 existence of no-fault benefits, in the direct or indirect cost
15 of the provided benefits shall be returned to the individual.
16 (b) Security.--The owner may elect to provide for security
17 for the payment of basic loss benefits through a program, group,
18 contract or other arrangement that would pay, to or on behalf of
19 the victim, members of the victim's family residing in the same
20 household or the survivor of a deceased victim, allowable
21 expense, loss of income, work loss, replacement services loss
22 and survivor's loss. A contract of insurance issued by an
23 insurer shall be construed to contain a provision that basic
24 loss benefits provided in the contract shall be in excess of
25 valid and collectible benefits otherwise provided through a
26 program, group, contract or other arrangement, as designated at
27 the election of the owner to be primary.
28 (c) Cost reduction.--An insurer providing basic loss
29 benefits and tort liability coverage under subsection (b) shall
30 reduce the cost of the contract of insurance to reflect the
19870H1446B1706 - 30 -
1 anticipated reduction in basic loss benefits payable by the
2 insurer by reason of the election of the owner to provide
3 substitute security.
4 § 1724. Source of basic restoration benefits.
5 (a) Applicable security.--
6 (1) The security for the payment of basic loss benefits
7 applicable to an employee or to the spouse or other relative
8 of the employee residing in the same household as the
9 employee, if the accident resulting in injury occurs while
10 the victim or deceased victim is driving or occupying a motor
11 vehicle furnished by the employer, is the security for the
12 payment of basic loss benefits covering the motor vehicle or,
13 if there is none, other security applicable to the victim.
14 (2) The security for the payment of basic loss benefits
15 applicable to an individual who is not an insured or the
16 driver or other occupant of a motor vehicle involved in an
17 accident resulting in injury is the security covering the
18 motor vehicle involved in the accident. For purposes of this
19 paragraph, a parked and unoccupied motor vehicle is not a
20 motor vehicle involved in an accident unless it was parked so
21 as to cause unreasonable risk of injury.
22 (3) The security for the payment of basic loss benefits
23 applicable to the driver or other occupant of a motor vehicle
24 who is involved in an accident resulting in injury but who is
25 not an insured is the security covering the vehicle.
26 (4) The security for the payment of basic loss benefits
27 applicable to an insured is the security under which the
28 victim or deceased victim is insured.
29 (5) The applicable assigned claims plan is the security
30 for the payment of basic loss benefits applicable to
19870H1446B1706 - 31 -
1 individuals not covered by paragraphs (1) through (4).
2 (b) Multiple sources of equal property.--If two or more
3 obligations to pay basic loss benefits apply equally to an
4 injury under the priorities set forth in subsection (a), the
5 obligor against whom a claim is asserted first shall process and
6 pay the claim as if wholly responsible. That obligor shall be
7 entitled to recover contribution pro rata from another obligor
8 for the basic loss benefits paid and for the costs of processing
9 the claim. If contribution is sought among obligors responsible
10 under subsection (a)(2), proration shall be based on the number
11 of involved motor vehicles.
12 § 1725. Work loss.
13 (a) Regularly employed.--The work loss of a victim whose
14 income prior to the injury was realized in regular increments is
15 calculated as follows:
16 (1) Divide probable annual income by 52.
17 (2) Multiply the quotient in paragraph (1) by the number
18 of work weeks the victim sustains loss of income during the
19 accrual period.
20 (b) Seasonally employed.--The work loss of a victim whose
21 income is realized in irregular increments is calculated as
22 follows:
23 (1) Divide probable annual income by the number of weeks
24 the victim normally works.
25 (2) Multiply the quotient in paragraph (1) by the number
26 of work weeks the victim was unable to perform and would have
27 performed work but for the injury during the accrual period.
28 (c) Not employed.--The work loss of a victim who is not
29 employed when the accident resulting in injury occurs is
30 calculated as follows:
19870H1446B1706 - 32 -
1 (1) Divide probable annual income by 52.
2 (2) Multiply the quotient in paragraph (1) by the number
3 of work weeks, if any, the victim would reasonably have been
4 expected to realize income during the accrual period.
5 (d) Definitions.--As used in this section, the following
6 words and phrases shall have the meanings given to them in this
7 subsection:
8 "Probable annual income." Absent a showing that it is or
9 would be some other amount, the following:
10 (1) For a victim regularly employed at the time of the
11 accident, the greater of the following:
12 (i) Twelve times the monthly gross income earned by
13 the victim from work in the month preceding the month in
14 which the accident resulting in injury occurs.
15 (ii) The average annual income earned by the victim
16 from work during the years, not to exceed three,
17 preceding the year in which the accident resulting in
18 injury occurs.
19 (2) For a victim seasonally employed or unemployed at
20 the time of the accident, the average annual gross income
21 earned by the victim from work during the years in which the
22 victim was employed, not to exceed three, preceding the year
23 in which the accident resulting in injury occurs.
24 (3) For a victim who has not previously earned income
25 from work, the average annual gross income of a production or
26 nonsupervisory worker in the private nonfarm economy in the
27 state in which the victim is domiciled for the year in which
28 the accident resulting in injury occurs.
29 "Weekly income." Income earned during a work week.
30 "Work week." The number of days an individual normally works
19870H1446B1706 - 33 -
1 in a seven-day period.
2 § 1726. Net loss.
3 (a) General rule.--Except as provided in section 1707(a)(3)
4 (relating to assigned claims plan), all of the following shall
5 be subtracted from loss in calculating net loss:
6 (1) Benefits or advantages, less reasonably incurred
7 collection costs, that an individual receives or is entitled
8 to receive from all of the following:
9 (i) Social Security. This subparagraph does not
10 apply to benefits provided under Title XIX of the Social
11 Security Act (Public Law 74-271, 42 U.S.C. § 1396 et
12 seq.) or Medicare benefits to which an individual's
13 entitlement depends upon use of "life-time reserve" of
14 benefit days.
15 (ii) Worker's compensation.
16 (iii) State-required temporary, nonoccupational
17 disability insurance.
18 (2) Benefits from a government received by or available
19 to an individual because of an injury. This paragraph does
20 not apply to proceeds of life insurance.
21 (b) Tax deduction.--If a benefit or advantage received to
22 compensate for loss of income because of injury, whether from
23 no-fault benefits or from a source of benefits or advantages
24 subtracted under subsection (a), is not taxable income, the
25 income tax saving that is attributable to that loss of income
26 because of injury shall be subtracted in calculating net loss
27 for work loss. Subtraction may not exceed 20% of the loss of
28 income and shall be in a lesser amount as the insurer reasonably
29 determines is appropriate based on a lower value of the income
30 tax advantage.
19870H1446B1706 - 34 -
1 § 1727. Added loss benefits.
2 (a) Mandatory offering.--Obligors providing security for the
3 payment of basic loss benefits shall offer or obligate
4 themselves to provide added loss benefits for injury or damage
5 arising out of the ownership, maintenance or use of a motor
6 vehicle, including:
7 (1) Loss excluded from basic loss benefits by limits on
8 allowable expense, work loss, replacement services loss and
9 survivor's loss.
10 (2) Benefits for damage to property.
11 (3) Benefits for loss of use of a motor vehicle.
12 (4) Benefits for expense for remedial religious
13 treatment and care.
14 (5) For physical damage to a motor vehicle, a coverage
15 for collision and upset damage, subject to an optional
16 deductible.
17 (6) For economic detriment, a coverage for work loss
18 sustained by a victim in excess of limitations on basic loss
19 benefits for work loss.
20 (b) Additional loss coverage.--Subject to the approval of
21 terms and forms by the commissioner, obligors may offer or
22 obligate themselves to provide other added loss coverages. The
23 commissioner may adopt regulations requiring that insurers
24 providing basic loss insurance offer, under this chapter, other
25 specified added loss coverages.
26 § 1728. Ineligible claimants.
27 (a) Converter.--
28 (1) Except as provided for assigned claims, a converter
29 of a motor vehicle is ineligible to receive no-fault
30 benefits, including benefits otherwise due as a survivor,
19870H1446B1706 - 35 -
1 from a source other than a contract of insurance under which
2 the converter is an insured for an injury arising out of the
3 maintenance or use of the converted vehicle. If a converter
4 dies from injuries, the survivor is not entitled to no-fault
5 benefits for survivor's loss from a source other than a
6 contract of insurance under which the converter is an
7 insured.
8 (2) For purposes of this subsection and section 1710
9 (relating to rights and duties of obligors), an individual is
10 not a converter of a motor vehicle if the individual used it
11 in the good faith belief that the individual was legally
12 entitled to do so.
13 (b) Intentional injuries.--
14 (1) An individual who intentionally injures himself or
15 another individual is ineligible to receive no-fault benefits
16 for injury arising out of the act, including benefits
17 otherwise due as a survivor. If an individual dies as a
18 result of intentionally injuring himself, the survivor is not
19 entitled to no-fault benefits for survivor's loss. An
20 individual intentionally injures himself or another
21 individual if he acts or fails to act for the purpose of
22 causing injury or with knowledge that the injury is
23 substantially certain to follow. An individual does not
24 intentionally injure himself or another individual merely
25 because the act or failure to act is intentional or done with
26 the realization that it creates a grave risk of causing
27 injury or if the act or omission causing the injury is for
28 the purpose of averting bodily harm to himself or another
29 individual.
30 (2) For the purposes of sections 1710(c) and 1726
19870H1446B1706 - 36 -
1 (relating to net loss), an individual does not intentionally
2 injure himself or another individual merely because the act
3 or failure to act is intentional or done with the realization
4 that it creates a grave risk of harm.
5 § 1729. Other provisions.
6 (a) Included coverage.--A contract of insurance covering
7 liability arising out of the ownership, maintenance or use of a
8 motor vehicle registered in this Commonwealth shall include
9 basic loss benefits and other benefit coverages required by the
10 plan under section 1704 (relating to availability of insurance)
11 unless the contract provides tort liability coverages only in
12 excess of those required by the no-fault plan.
13 (b) Approval of terms and forms.--Terms and conditions,
14 including forms used by insurers, of a contract, certificate or
15 other evidence of insurance sold or issued pursuant to the plan
16 under section 1704 providing no-fault benefits or required tort
17 liability are subject to approval and regulation by the
18 commissioner. The commissioner shall approve only terms and
19 conditions which are consistent with the purposes of this
20 chapter and which are and fair and equitable to persons whose
21 interests may be affected. The commissioner may reasonably limit
22 by regulation the variety of coverage available in order to give
23 purchasers of insurance a reasonable opportunity to compare the
24 cost of insuring with various insurers.
25 SUBCHAPTER C
26 TORT LIABILITY
27 Sec.
28 1731. Tort liability.
29 § 1731. Tort liability.
30 (a) Partial abolition.--Tort liability is abolished with
19870H1446B1706 - 37 -
1 respect to an injury that takes place in this Commonwealth if
2 the injury arises out of the maintenance or use of a motor
3 vehicle. Tort liability is not abolished in the following
4 circumstances:
5 (1) An owner of a motor vehicle involved in an accident
6 remains liable if, at the time of the accident, the vehicle
7 was not a secured vehicle.
8 (2) A person in the business of designing,
9 manufacturing, repairing, servicing or otherwise maintaining
10 motor vehicles remains liable for injury arising out of a
11 defect in a motor vehicle which is caused or not corrected by
12 an act or omission in the course of the business. This
13 paragraph does not apply to a defect in a motor vehicle which
14 is operated by such business.
15 (3) An individual remains liable for intentionally
16 injuring himself or another individual.
17 (4) A person remains liable for loss which is not
18 compensated because of a limitation under section 1722
19 (relating to basic loss benefits).
20 (5) A person remains liable for damages for noneconomic
21 detriment if the accident results in one of the following:
22 (i) Death or serious and permanent injury.
23 (ii) The reasonable value of reasonable and
24 necessary medical and dental services, including
25 prosthetic devices and necessary ambulance, hospital and
26 professional nursing expenses incurred in the diagnosis,
27 care and recovery of the victim, exclusive of diagnostic
28 X-ray costs and rehabilitation costs in excess of $100,
29 in excess of $3,000. For the purposes of this paragraph,
30 the reasonable value of hospital room and board shall be
19870H1446B1706 - 38 -
1 the amount determined by the Department of Health to be
2 the average daily rate charged for a semiprivate hospital
3 room and board, computed from charges by all hospitals in
4 this Commonwealth.
5 (iii) Medically determinable physical or mental
6 impairment which prevents the victim from performing all
7 or substantially all of the material acts and duties
8 which constitute the victim's usual and customary daily
9 activities and which continues for more than 60
10 consecutive days.
11 (iv) Injury which consists of cosmetic disfigurement
12 which is permanent, irreparable and severe.
13 (6) A person remains liable for injury arising out of a
14 motorcycle accident to the extent that the injury is not
15 covered by basic loss benefits payable under this chapter.
16 (b) Nonreimbursable tort fine.--Nothing in this section
17 shall be construed to immunize an individual from liability to
18 pay a fine on the basis of fault in a proceeding based upon an
19 act or omission arising out of the maintenance or use of a motor
20 vehicle. A fine under this subsection may not be paid or
21 reimbursed by an insurer or other obligor.
22 SUBCHAPTER D
23 EXAMINATION, TREATMENT AND REHABILITATION OF
24 INJURED PERSONS
25 Sec.
26 1741. Examination.
27 1742. Report of examination.
28 1743. Refusal to comply.
29 1744. Court order for obligor responsibility.
30 1745. Court order for rehabilitative training.
19870H1446B1706 - 39 -
1 1746. Compliance with court order.
2 1747. Customary charges for treatment.
3 1748. Earnings statement.
4 § 1741. Examination.
5 If the mental or physical condition of a victim is material
6 to a claim that has been or may be made for past or future basic
7 loss benefits, a court of competent jurisdiction may order the
8 victim to submit to mental or physical examination by a
9 physician. The order may be made only upon motion for good cause
10 shown and upon notice to the victim to be examined and to other
11 persons having an interest. The order shall specify the time,
12 place, manner, conditions and scope of the examination and the
13 individual by whom it is to be made.
14 § 1742. Report of examination.
15 If requested by the victim, a party causing an examination to
16 be made shall deliver to the victim a copy of every written
17 report concerning the examination rendered by an examining
18 physician. At least one of these reports must set out the
19 findings and conclusions in detail. After request and delivery,
20 the party causing the examination to be made may, upon request,
21 receive from the victim every written report available to the
22 victim or a representative concerning an examination of the same
23 mental or physical condition. By requesting and obtaining a
24 report of the examination so ordered or by taking the deposition
25 of the examiner, the victim waives the privilege, in relation to
26 the claim for basic loss benefits, regarding the testimony of
27 examiner of the victim in respect to the same mental or physical
28 condition.
29 § 1743. Refusal to comply.
30 If a person refuses to comply with an order entered under
19870H1446B1706 - 40 -
1 section 1741 (relating to examination) or 1742 (relating to
2 report of examination), the court may make orders in regard to
3 the refusal as are just. No order shall be entered directing the
4 arrest of a person for disobeying an order to submit to a
5 physical or mental examination. The orders that may be made in
6 regard to a refusal include, but are not limited to, the
7 following:
8 (1) An order that the mental or physical condition of
9 the victim shall be taken to be established for the purposes
10 of the claim in accordance with the contention of the party
11 obtaining the order.
12 (2) An order refusing to allow the disobedient person to
13 support or oppose designated claims or defenses or
14 prohibiting the disobedient person from introducing evidence
15 of mental or physical condition.
16 (3) An order rendering judgment by default against the
17 disobedient person as to the person's entire claim or a
18 designated part of it.
19 (4) An order requiring the disobedient person to
20 reimburse the obligor for reasonable attorney fees and
21 expenses incurred in defense against the claim.
22 (5) An order requiring delivery of a report under
23 section 1742 on just terms. If a physician fails or refuses
24 to make a report, a court may exclude the physician's
25 testimony.
26 § 1744. Court order for obligor responsibility.
27 (a) General rule.--Upon application by an interested person,
28 upon reasonable notice to other interested persons and upon
29 findings supported by evidence, a court of competent
30 jurisdiction may, after a hearing, enter an order determining
19870H1446B1706 - 41 -
1 that an obligor is responsible, subject to the limits and other
2 terms and conditions of the coverage, for the cost of a
3 specified procedure or treatment for rehabilitation to which the
4 victim submits.
5 (b) Findings.--All of the following findings are required to
6 support an order under subsection (a):
7 (1) The specified course of procedure or treatment,
8 whether or not involving surgery, is recognized and
9 acceptable medically or is acceptable nonmedical remedial
10 Christian Science treatment and care.
11 (2) The specified course of procedure or treatment has
12 contributed or will contribute substantially to
13 rehabilitation.
14 (3) The cost of the procedure or treatment is reasonable
15 in relation to its probable rehabilitative effects.
16 § 1745. Court order for rehabilitative training.
17 (a) General rule.--Upon application by an interested person,
18 upon reasonable notice to other interested persons and upon
19 findings supported by evidence, a court of competent
20 jurisdiction may, after a hearing, enter an order determining
21 that an obligor is responsible, subject to the limits and other
22 terms and conditions of the coverage, for the cost of a
23 specified course of rehabilitative occupational training that
24 the injured victim takes.
25 (b) Findings.--All of the following findings are required to
26 support an order under subsection (a):
27 (1) The specified course of occupational training is a
28 recognized form of training and is reasonable and appropriate
29 for the particular case.
30 (2) The training has contributed or will contribute
19870H1446B1706 - 42 -
1 substantially to rehabilitation.
2 (3) The cost of the training is reasonable in relation
3 to its probable rehabilitative effects.
4 § 1746. Compliance with court order.
5 (a) Order of compliance.--Upon application by an interested
6 person, upon reasonable notice to other interested persons and
7 upon findings supported by evidence, a court of competent
8 jurisdiction may, after a hearing, enter an order invoking
9 reasonable sanctions against the victim and survivors. All of
10 the following findings are required to support an order under
11 this subsection:
12 (1) The victim has refused or has caused the obligor
13 reasonably to believe that the victim may refuse to submit to
14 procedure, treatment or training.
15 (2) The victim does not have reasonable grounds to
16 continue refusal.
17 (b) Refusal to comply.--In determining whether a victim has
18 reasonable grounds for continuing refusal to submit to the
19 specified procedure, treatment or training, the court shall take
20 into account the extent of the probable benefit; the attendant
21 risks; the extent to which the procedure, treatment or training
22 is or is not recognized as standard and customary; and whether
23 the imposition of sanctions because of the victim's refusal
24 would abridge the victim's constitutional rights.
25 (c) Sanctions.--The sanctions that may be invoked under
26 subsection (a) include, but are not limited to, the following:
27 (1) An order that benefits be reduced or terminated as
28 necessary to limit recovery of benefits to an amount equal to
29 the benefits that, in reasonable probability, would have been
30 due had the victim submitted to rehabilitative procedure,
19870H1446B1706 - 43 -
1 treatment or training.
2 (2) An order that the physical or mental condition of
3 the victim shall be taken to be established for the purposes
4 of the claim in accordance with the contention of the
5 obligor.
6 (3) An order that, if the obligor elects to pay a
7 specified lump sum, found to be fair and reasonable
8 compensation, in lieu of benefits that, in reasonable
9 probability, would be due if the victim submitted to the
10 specified procedure, treatment or training, it shall be
11 discharged from liability arising from the injury.
12 § 1747. Customary charges for treatment.
13 A physician, hospital, clinic or other person or institution
14 lawfully rendering treatment to an injured individual for an
15 injury covered by basic loss benefits and a person or
16 institution providing rehabilitative occupational training
17 following such an injury may charge a reasonable amount for the
18 products, services and accommodations rendered. A charge may not
19 be in excess of the amount the person or institution customarily
20 charges for like products, services and accommodations in cases
21 involving no insurance.
22 § 1748. Earnings statement.
23 (a) Statement from employer.--An employer of a victim shall,
24 if a request is made by an obligor against whom a claim has been
25 made, furnish, in a form approved by the commissioner, a sworn
26 statement of earnings, since injury and for a reasonable period
27 before injury, of the victim.
28 (b) Medical records.--A physician, hospital, clinic or other
29 person or institution providing products, services or
30 accommodations shall, if requested to do so by the obligor,
19870H1446B1706 - 44 -
1 subject to conditions approved by the commissioner, do the
2 following:
3 (1) Furnish a written report of the history, condition,
4 treatment and dates and costs of treatment of the victim that
5 are in connection with the injury for which claim is being
6 made.
7 (2) Produce and permit the inspection and copying of
8 records regarding the history, condition, treatment and dates
9 and costs of treatment that are in connection with the injury
10 for which claim is being made.
11 (c) Cost of reports.--An employer, physician, hospital,
12 clinic or other person or institution providing information in
13 response to a request under the terms of this section may charge
14 a reasonable amount in reimbursement for the time and cost of
15 providing the information.
16 (d) Discovery.--In the event of a dispute regarding an
17 insurer's right to discovery of facts about a victim's earnings
18 or about a victim's history, condition, treatment and dates and
19 costs of treatment, a court of competent jurisdiction may enter
20 an order for discovery. The order may be made only upon motion,
21 for good cause shown, and upon notice to persons having an
22 interest. The order shall specify the time, place, manner,
23 conditions and scope of discovery. A court, as justice requires,
24 may, in order to protect against annoyance, embarrassment or
25 oppression, enter an order refusing discovery or specifying
26 conditions of discovery and may order payments of costs and
27 expenses of the proceeding, including reasonable fees for the
28 appearance of attorneys at the proceedings.
29 SUBCHAPTER E
30 INSURANCE
19870H1446B1706 - 45 -
1 Sec.
2 1751. Uninsured motorists.
3 1752. Antidiscrimination.
4 1753. Policy requirements and premium charges.
5 1754. Add-on benefits.
6 § 1751. Uninsured motorists.
7 If the owner of a motor vehicle is insured under this
8 chapter, the obligor obligated to pay basic loss benefits for
9 accidental bodily injury to an individual occupying the motor
10 vehicle or to the spouse or relative resident in the household
11 of the owner shall be entitled to recover the benefits paid and
12 appropriate loss adjustments costs incurred from the owner or
13 from the owner's estate. The failure of the individual to make
14 payment within 30 days shall be grounds for suspension or
15 revocation of the motor vehicle registration and operator's
16 license.
17 § 1752. Antidiscrimination.
18 There may be no unfair discrimination by insurers in
19 eligibility rules and underwriting practices by reason of race,
20 religion, nationality or ethnic group, age, sex, family size,
21 occupation, place of residence or marital status. The terms
22 "eligibility rules and underwriting practices" do not include
23 the making or promulgation of rates in accordance with law.
24 § 1753. Policy requirements and premium charges.
25 (a) Requirements for writing insurance.--Insurers licensed
26 in this Commonwealth and desiring to qualify to write insurance
27 applicable to motor vehicle accidents subsequent to the
28 effective date of this chapter must, as a condition of
29 qualification, prepare and file policy forms and insurance rates
30 for coverages affected by this chapter. Policy forms and rates
19870H1446B1706 - 46 -
1 must be filed with the office of the commissioner of this
2 Commonwealth within three months from the effective date of this
3 chapter.
4 (b) Initial premium charges.--The premiums charged by an
5 insurer during the first 12-month period following the effective
6 date of this chapter for basic loss insurance benefits, together
7 with security required for the payment of tort judgments, may
8 not exceed 85% of the combined premiums for:
9 (1) Bodily injury liability insurance for the same
10 limits required in this chapter.
11 (2) Medical payments insurance in the amount of $1,000,
12 approved by the commissioner for an insurer and in effect on
13 the date this chapter becomes effective.
14 (c) Limitation on premium increases.--No insurer may
15 increase the premium rate of an owner of a policy solely because
16 a named insured under the policy made a claim under the policy
17 and was paid the claim unless it is determined that the named
18 insured was at fault in contributing to the accident giving rise
19 to the claim. The commissioner shall promulgate regulations for
20 determining fault of an insured for the purposes of this
21 subsection.
22 § 1754. Add-on benefits.
23 No obligor may, in effecting the renewal of an automobile
24 insurance policy or in amending an automobile insurance policy
25 to conform to the provisions of this chapter, add on no-fault
26 benefits in excess of the minimum benefits required or increase
27 the limits of tort liability insurance required under this
28 chapter without the prior written consent of the insured.
29 SUBCHAPTER F
30 PENALTIES
19870H1446B1706 - 47 -
1 Sec.
2 1761. Operation of a vehicle without security.
3 1762. Violations by obligor.
4 § 1761. Operation of a vehicle without security.
5 An owner of a passenger vehicle for which the existence of
6 security for basic loss benefits and tort liability insurance is
7 a requirement for its legal operation upon the highways of this
8 Commonwealth who operates the motor vehicle or permits it to be
9 operated upon a highway in this Commonwealth without security
10 under section 1703 (relating to required motor vehicle
11 insurance) commits a misdemeanor of the third degree. An
12 individual who operates a motor vehicle upon a public highway in
13 this Commonwealth with the knowledge that the owner does not
14 have security under section 1703 commits a misdemeanor of the
15 third degree. Upon conviction of a misdemeanor under this
16 section, a person shall be sentenced to pay a fine of not less
17 than $100 and not more than $500 or to imprisonment for not more
18 than six months, or both.
19 § 1762. Violations by obligor.
20 An obligor who advertises, offers or contracts for or
21 provides for no-fault benefits or tort liability insurance
22 coverages required by this chapter and who, by a pattern of
23 business transactions, violates this chapter commits a summary
24 offense and shall, upon conviction, be sentenced to pay a fine
25 of not more than $1,000.
26 SUBCHAPTER G
27 MISCELLANEOUS PROVISIONS
28 Sec.
29 1771. Insurance premium rates.
30 1772. Severability.
19870H1446B1706 - 48 -
1 § 1771. Insurance premium rates.
2 (a) Reasonable difference in losses and expenses.--No rate
3 made under the act of June 11, 1947 (P.L.538, No.246), known as
4 The Casualty and Surety Rate Regulatory Act, shall be held to be
5 unfairly discriminatory unless, allowing for practical
6 limitations, it clearly fails to reflect with reasonable
7 accuracy the differences in expected losses and expenses. A rate
8 is not unfairly discriminatory because different premiums result
9 for policyholders with like loss exposures but different expense
10 factors so long as the rate reflects the differences with
11 reasonable accuracy. A rate is not unfairly discriminatory if it
12 is averaged broadly among persons insured under a group,
13 franchise or blanket policy.
14 (b) Factors supported by actuarial principles.--This section
15 shall not be construed to prohibit rates for automobile
16 insurance which are based on factors whose use is supported by
17 sound actuarial principles or is related to actual or reasonably
18 anticipated experience. Factors under this section include sex
19 but exclude race, religion or national origin.
20 § 1772. Severability.
21 The provisions of this chapter are severable. The provisions
22 of section 1731 (relating to tort liability) are expressly made
23 nonseverable.
24 Section 3. This act shall take effect in 60 days.
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