PRINTER'S NO. 144
No. 144 Session of 1989
INTRODUCED BY HOLL, JANUARY 23, 1989
REFERRED TO BANKING AND INSURANCE, JANUARY 23, 1989
AN ACT
1 Amending Titles 18 (Crimes and Offenses) and 75 (Vehicles) of
2 the Pennsylvania Consolidated Statutes, providing for
3 insurance fraud; further providing for suspension of
4 registration and drivers' licenses, for motor vehicle
5 insurance, for financial responsibility, for reinstatement of
6 registration and drivers' licenses; conferring powers and
7 duties on the Department of Transportation and the Insurance
8 Department; and making repeals.
9 The General Assembly of the Commonwealth of Pennsylvania
10 hereby enacts as follows:
11 Section 1. Section 911(h) of Title 18 of the Pennsylvania
12 Consolidated Statutes is amended to read:
13 § 911. Corrupt organizations.
14 * * *
15 (h) Definitions.--As used in this section:
16 (1) "Racketeering activity" means:
17 (i) any act which is indictable under any of the
18 following provisions of this title:
19 Chapter 25 (relating to criminal homicide)
20 Section 2706 (relating to terroristic threats)
1 Chapter 29 (relating to kidnapping)
2 Chapter 33 (relating to arson, etc.)
3 Chapter 37 (relating to robbery)
4 Chapter 39 (relating to theft and related
5 offenses)
6 Section 4108 (relating to commercial bribery and
7 breach of duty to act disinterestedly)
8 Section 4109 (relating to rigging publicly
9 exhibited contest)
10 Section 4117 (relating to insurance fraud)
11 Chapter 47 (relating to bribery and corrupt
12 influence)
13 Chapter 49 (relating to perjury and other
14 falsification in official matters)
15 Section 5512 through 5514 (relating to gambling)
16 Chapter 59 (relating to public indecency)
17 (ii) any offense indictable under section 13 of the
18 act of April 14, 1972 (P.L.233, No.64), known as ["]The
19 Controlled Substance, Drug, Device and Cosmetic Act["]
20 (relating to the sale and dispensing of narcotic drugs);
21 (iii) any conspiracy to commit any of the offenses
22 set forth in subparagraphs (i) and (ii) of this
23 paragraph; or
24 (iv) the collection of any money or other property
25 in full or partial satisfaction of a debt which arose as
26 the result of the lending of money or other property at a
27 rate of interest exceeding 25% per annum or the
28 equivalent rate for a longer or shorter period, where not
29 otherwise authorized by law.
30 Any act which otherwise would be considered racketeering
19890S0144B0144 - 2 -
1 activity by reason of the application of this paragraph,
2 shall not be excluded from its application solely because the
3 operative acts took place outside the jurisdiction of this
4 Commonwealth, if such acts would have been in violation of
5 the law of the jurisdiction in which they occurred.
6 (2) "Person" means any individual or entity capable of
7 holding a legal or beneficial interest in property.
8 (3) "Enterprise" means any individual, partnership,
9 corporation, association or other legal entity, and any union
10 or group of individuals associated in fact although not a
11 legal entity, engaged in commerce.
12 (4) "Pattern of racketeering activity" refers to a
13 course of conduct requiring two or more acts of racketeering
14 activity one of which occurred after the effective date of
15 this section.
16 (5) "Racketeering investigator" means an attorney,
17 investigator or investigative body so designated in writing
18 by the Attorney General and charged with the duty of
19 enforcing or carrying into effect the provisions of this
20 section.
21 (6) "Racketeering investigation" means any inquiry
22 conducted by any racketeering investigator for the purpose of
23 ascertaining whether any person has been involved in any
24 violation of this section or of any order, judgment, or
25 decree of any court duly entered in any case or proceeding
26 arising under this section.
27 (7) "Documentary material" means any book, paper,
28 record, recording, tape, report, memorandum, written
29 communication, or other document relating to the business
30 affairs of any person or enterprise.
19890S0144B0144 - 3 -
1 Section 2. Title 18 is amended by adding a section to read:
2 § 4117. Insurance fraud.
3 (a) Offense defined.--A person commits an offense if he:
4 (1) knowingly and with the intent to defraud any insurer
5 presents or causes to be presented to any insurer any
6 statement forming a part of, or in support of, an insurance
7 application or an insurance claim that contains any false,
8 incomplete or misleading information concerning any fact or
9 thing material to the insurance application or insurance
10 claim;
11 (2) knowingly and with the intent to defraud any insurer
12 assists, abets, solicits or conspires with another to prepare
13 or make any statement that is intended to be presented to any
14 insurer in connection with, or in support of, any insurance
15 application or insurance claim that contains any false,
16 incomplete or misleading information concerning any fact or
17 thing material to the insurance claim; or
18 (3) engages in unlicensed agent or broker activity as
19 defined by the act of May 17, 1921 (P.L.789, No.285), known
20 as The Insurance Department Act of one thousand nine hundred
21 and twenty-one, knowingly and with the intent to defraud an
22 insurer or the public.
23 (b) Grading.--An offense under this section is a felony of
24 the third degree.
25 (c) Restitution.--The court shall, in addition to any other
26 sentence authorized by law, sentence a person convicted of
27 violating this section to make restitution under section 1106
28 (relating to restitution for injuries to person or property).
29 (d) Immunity.--An insurer, and any agent, servant or
30 employee acting in the course and scope of his employment, shall
19890S0144B0144 - 4 -
1 be immune from civil or criminal liability arising from the
2 supply or release of written or oral information to any entity
3 duly authorized to receive such information by Federal or State
4 law, or by Insurance Department regulation, if the following
5 conditions exist:
6 (1) the information is supplied to the agency in
7 connection with an allegation of fraudulent conduct on the
8 part of any person relating to the filing or maintenance of a
9 motor vehicle insurance claim for bodily injury or property
10 damage; and
11 (2) the insurer, agent, servant or employee has probable
12 cause to believe that the information supplied is reasonably
13 related to the allegation of fraud.
14 (e) Definitions.--As used in this section, the following
15 words and phrases shall have the meanings given to them in this
16 subsection:
17 "Insurance application." A document submitted by a
18 prospective insured which requests insurance coverage and which
19 provides information requested by an insurer to evaluate the
20 risk.
21 "Insurance claim." A claim for payment or other benefit
22 pursuant to an insurance policy.
23 "Insurance policy." A document setting forth the terms and
24 conditions of a contract of insurance.
25 "Insurer." A company, association or exchange defined by
26 section 101 of the act of May 17, 1921 (P.L.682, No.284), known
27 as The Insurance Company Law of 1921; an unincorporated
28 association of underwriting members; a hospital plan
29 corporation; a professional health services plan corporation; a
30 health maintenance organization; a fraternal benefit society;
19890S0144B0144 - 5 -
1 and a self-insured health care entity under the act of October
2 15, 1975 (P.L.390, No.111), known as the Health Care Services
3 Malpractice Act.
4 "Person." An individual, corporation, partnership,
5 association, joint-stock company, trust or unincorporated
6 organization.
7 "Statement." Any oral or written presentation or other
8 evidence of loss, injury or expense, including, but not limited
9 to, any notice, statement, proof of loss, bill of lading,
10 receipt for payment, invoice, account, estimate of property
11 damages, bill for services, diagnosis, prescription, hospital or
12 doctor records, X-ray, test result or computer-generated
13 documents.
14 Section 3. Sections 1376, 1540(c), 1711, 1712(1), 1731(a),
15 1734 and 1736 of Title 75 are amended to read:
16 § 1376. Surrender of registration plates and cards upon
17 suspension.
18 (a) General rule.--The department, upon suspending any
19 registration, shall require the registration plate or plates and
20 registration card to be surrendered immediately to the
21 department and may delegate authority to any authorized
22 department employee, member of the Pennsylvania State Police
23 [or], local police officer, sheriff or deputy sheriff to seize
24 the registration plate or plates and registration card or cards.
25 The department shall, by regulation, prescribe the manner of
26 selecting the employees and State and local police officers,
27 sheriffs and deputy sheriffs to seize the registration plates
28 and registration cards.
29 (b) Penalty.--Any person failing or refusing to surrender to
30 the department, upon demand, any registration plate or card
19890S0144B0144 - 6 -
1 which has been suspended is guilty of a summary offense and
2 shall, upon conviction, be sentenced to pay a fine of $100.
3 § 1540. Surrender of license.
4 * * *
5 (c) Seizure of revoked and suspended licenses.--The
6 department may delegate authority to any authorized department
7 employee, member of the Pennsylvania State Police [or], local
8 police officer, sheriff or deputy sheriff to seize the driver's
9 license of any person when the operating privilege of that
10 person has been revoked or suspended and his driver's license
11 has been ordered to be surrendered by a court or district
12 attorney or by the department. The department shall, by
13 regulation, prescribe the manner of selecting the employees
14 [and], State and local police officers, sheriffs and deputy
15 sheriffs to seize the drivers' licenses.
16 § 1711. Required benefits.
17 An insurer issuing or delivering liability insurance policies
18 covering any motor vehicle of the type required to be registered
19 under this title, except recreational vehicles not intended for
20 highway use, motorcycles, motor-driven cycles or motorized
21 pedalcycles or like type vehicles, registered and operated in
22 this Commonwealth, shall include coverage providing a medical
23 benefit in the amount of [$10,000] $5,000, an optional income
24 loss benefit up to a monthly maximum of $1,000 up to a maximum
25 benefit of $5,000 and [a] an optional funeral benefit in the
26 amount of $1,500, as defined in section 1712 (relating to
27 availability of benefits), with respect to injury arising out of
28 the maintenance or use of a motor vehicle. The income loss
29 benefit provided under this section may be expressly waived by
30 the named insured provided the named insured has no expectation
19890S0144B0144 - 7 -
1 of actual income loss due to age, disability or lack of
2 employment history.
3 § 1712. Availability of benefits.
4 An insurer issuing or delivering liability insurance policies
5 covering any motor vehicle of the type required to be registered
6 under this title, except recreational vehicles not intended for
7 highway use, motorcycles, motor-driven cycles or motorized
8 pedalcycles or like type vehicles, registered and operated in
9 this Commonwealth, shall make available for purchase first party
10 benefits with respect to injury arising out of the maintenance
11 or use of a motor vehicle as follows:
12 (1) Medical benefit.--Coverage to provide for usual,
13 customary and reasonable charges for reasonable and necessary
14 medical treatment and rehabilitative services, including, but
15 not limited to, hospital, dental, surgical, psychiatric,
16 psychological, osteopathic, ambulance, chiropractic, licensed
17 physical therapy, nursing services, vocational rehabilitation
18 and occupational therapy, speech pathology and audiology,
19 optometric services, medications, medical supplies and
20 prosthetic devices, all without limitation as to time,
21 provided that, within 18 months from the date of the accident
22 causing injury, it is ascertainable with reasonable medical
23 probability that further expenses may be incurred as a result
24 of the injury. Benefits under this paragraph may include any
25 nonmedical remedial care and treatment rendered in accordance
26 with a recognized religious method of healing.
27 * * *
28 § 1731. Scope and amount of coverage.
29 (a) General rule.--No motor vehicle liability insurance
30 policy shall be delivered or issued for delivery in this
19890S0144B0144 - 8 -
1 Commonwealth, with respect to any motor vehicle registered or
2 principally garaged in this Commonwealth, unless uninsured
3 motorist and underinsured motorist coverages are [provided] made
4 available therein or supplemental thereto in amounts equal to
5 the bodily injury liability coverage except as provided in
6 section 1734 (relating to request for [lower or] higher limits
7 of coverage). One or both of these coverages must be provided if
8 the applicant or policyholder requests in writing.
9 * * *
10 § 1734. Request for [lower or] higher limits of coverage.
11 [A named insured may request in writing the issuance of
12 coverages under section 1731 (relating to scope and amount of
13 coverage) in amounts less than the limits of liability for
14 bodily injury but in no event less than the amounts required by
15 this chapter for bodily injury.] If the named insured has
16 selected uninsured and underinsured motorist coverage in
17 connection with a policy previously issued to him by the same
18 insurer under section 1731, the coverages offered need not be
19 provided in excess of the limits of liability previously issued
20 for uninsured and underinsured motorist coverage unless the
21 named insured requests in writing higher limits of liability for
22 those coverages.
23 § 1736. Coverages in excess of required amounts.
24 The coverages provided under this subchapter may be offered
25 by insurers in amounts higher than those [required] offered by
26 this chapter but may not be greater than the limits of liability
27 specified in the bodily injury liability provisions of the
28 insured's policy.
29 Section 4. Title 75 is amended by adding sections to read:
30 § 1737. Exhaustion.
19890S0144B0144 - 9 -
1 An insurer has no duty to pay underinsured motorist benefits
2 to its insured until all other forms of insurance applicable at
3 the time of the accident have been exhausted by payment of their
4 limits. Other forms of insurance include, but are not limited
5 to, motor vehicle liability insurance, other applicable
6 liability insurance and self-insurance plans.
7 § 1738. Stacking of uninsured and underinsured benefits.
8 Uninsured and underinsured benefits shall not be increased by
9 stacking the limits of coverage of:
10 (1) multiple motor vehicles covered under the same
11 policy of insurance; or
12 (2) multiple motor vehicle policies covering the
13 individual for the same loss.
14 § 1739. Coverage not conditioned on release.
15 A tortfeasor's insurer shall not require a claimant to
16 release the tortfeasor, indemnify the tortfeasor or hold the
17 tortfeasor harmless from liability in excess of the tortfeasor's
18 policy limits as a condition of making payment of bodily injury
19 benefits to which the claimant is legally entitled.
20 Section 5. Sections 1786 and 1960 of Title 75 are amended to
21 read:
22 § 1786. [Self-certification of] Required financial
23 responsibility.
24 (a) Self-certification.--The Department of Transportation
25 shall require that each motor vehicle registrant certify that
26 the registrant is financially responsible at the time of
27 registration or renewal thereof. The department shall refuse to
28 register or renew the registration of a vehicle for failure to
29 comply with this requirement or falsification of self-
30 certification.
19890S0144B0144 - 10 -
1 (b) Consent to produce proof of financial responsibility.--
2 Upon registering a motor vehicle or renewing a motor vehicle
3 registration, the owner of the motor vehicle shall be deemed to
4 have given consent to produce proof to the Department of
5 Transportation or a police officer that the vehicle registrant
6 has the financial responsibility required by this chapter.
7 Failure to produce proof of financial responsibility to a police
8 officer upon request constitutes a summary offense.
9 (c) Suspension of registration and operating privilege.--The
10 Department of Transportation shall suspend the registration of a
11 vehicle if it determines the required financial responsibility
12 has not been secured as required by this chapter and may suspend
13 the operating privilege of the registrant. The operating
14 privilege shall not be restored until proof of financial
15 responsibility is submitted, together with the restoration fee
16 for operating privilege provided by section 1960 (relating to
17 reinstatement of operating privilege). Whenever the department
18 revokes or suspends the registration of any vehicle under this
19 chapter, the department shall not restore the registration until
20 the vehicle owner furnishes proof of financial responsibility in
21 a manner determined by the department and submits an application
22 for registration to the department, accompanied by the fee for
23 restoration of registration provided by section 1960.
24 (d) Obligations upon termination of financial
25 responsibility.--
26 (1) An owner of a motor vehicle who ceases to maintain
27 financial responsibility on a registered vehicle shall not
28 operate or permit operation of the vehicle in this
29 Commonwealth until proof of the required financial
30 responsibility has been provided to the Department of
19890S0144B0144 - 11 -
1 Transportation.
2 (2) An insurer who has issued a contract of motor
3 vehicle liability insurance, or any approved self-insurance
4 entity, shall notify the department in a timely manner and in
5 a method prescribed by the department's regulations.
6 (3) A person who, after maintaining financial
7 responsibility on the vehicle of another person, ceases to
8 maintain such financial responsibility shall immediately
9 notify the vehicle's owner, who shall not operate, or permit
10 operation of, the vehicle in this Commonwealth.
11 (4) In the case of a person who leases any motor vehicle
12 from a person engaged in the business of leasing motor
13 vehicles, the lessee shall sign a statement indicating that
14 the required financial responsibility has been provided. The
15 lessee shall submit the statement to the lessor.
16 (e) Operation of a motor vehicle without required financial
17 responsibility.--Any owner of a motor vehicle for which the
18 existence of financial responsibility is a requirement for its
19 legal operation shall not operate the motor vehicle or permit it
20 to be operated upon a highway of this Commonwealth without the
21 financial responsibility required by this chapter and shall,
22 upon request of the Department of Transportation, produce proof
23 of financial responsibility on a form provided by the
24 department. Any person who fails to comply with this subsection
25 is subject to a civil penalty of $100 plus $100 for each month
26 or part of a month of the registration period for which
27 financial responsibility was not obtained.
28 (f) Time limit to produce proof.--Failure of a registered
29 vehicle owner to provide proof of financial responsibility in a
30 form authorized by Insurance Department regulation within 15
19890S0144B0144 - 12 -
1 days of a request by the Department of Transportation for the
2 proof provided for in subsection (e) shall subject the owner to
3 an additional civil penalty of $200 and to a three-month
4 revocation of vehicle registration.
5 (g) Defenses.--
6 (1) No person shall be convicted of failing to produce
7 proof of financial responsibility under any provision of this
8 section or under section 3743 (relating to accidents
9 involving damage to attended vehicle or property) or 6308
10 (relating to investigation by police officers), if the person
11 produces, at the office of the issuing authority within five
12 days of the date of the violation, proof that he possessed
13 the required financial responsibility at the time of the
14 violation.
15 (2) No person shall be penalized for maintaining a
16 registered motor vehicle without financial responsibility
17 under subsection (c) if the registration and license plates
18 were surrendered to the Department of Transportation at the
19 time insurance coverage terminated or financial
20 responsibility lapsed.
21 (h) Lack of knowledge.--No person, other than a registrant,
22 who proves that he was authorized to drive the vehicle and that
23 he did not know and had no reason to believe that the required
24 financial responsibility had not been provided shall be
25 convicted of failing to produce proof of financial
26 responsibility as required under this section. In such case,
27 however, the registrant may be charged with a violation.
28 § 1960. Reinstatement of operating privilege or vehicle
29 registration.
30 The department shall charge a fee of [$25] $50 to restore a
19890S0144B0144 - 13 -
1 person's operating privilege or the registration of a vehicle
2 following a suspension or revocation.
3 Section 6. Section 6104 of Title 75 is amended by adding a
4 subsection to read:
5 § 6104. Administrative duties of department.
6 * * *
7 (f) Furnishing information to municipal police departments
8 and sheriffs' offices.--The department shall regularly transmit
9 to each municipal police department and sheriff's office a list
10 of the names of persons residing within its jurisdiction whose
11 operating privilege or registration has been suspended or
12 revoked.
13 Section 7. Title 75 is amended by adding a section to read:
14 § 6308.1. Payment to police or sheriff's office of one-half of
15 reinstatement fee.
16 The police department or sheriff's office whose officers or
17 deputies seize a suspended or revoked driver's license or
18 vehicle registration shall, in every case where the driver's
19 license or vehicle registration is reinstated, receive from the
20 department one-half of the fee imposed under section 1960
21 (relating to reinstatement of operating privilege or vehicle
22 registration).
23 Section 8. The Insurance Department and the Department of
24 Transportation shall promulgate regulations to the extent
25 necessary to carry out the provisions of sections 1 (18 Pa.C.S.
26 § 911(h)) and 2 (18 Pa.C.S. § 4117) of this act.
27 Section 9. The following act and parts of acts are repealed:
28 Section 349 of the act of May 17, 1921 (P.L.682, No.284),
29 known as The Insurance Company Law of 1921.
30 Sections 604 and 623 of the act of May 17, 1921 (P.L.789,
19890S0144B0144 - 14 -
1 No.285), known as The Insurance Department Act of one thousand
2 nine hundred and twenty-one.
3 Section 10. This act shall take effect as follows:
4 (1) Sections 1 (18 Pa.C.S. § 911(h)), 2 (18 Pa.C.S. §
5 4117) 8, 9 and this section shall take effect immediately.
6 (2) The remainder of this act shall take effect in 60
7 days.
L22L75VDL/19890S0144B0144 - 15 -