PRINTER'S NO. 757
No. 721 Session of 1997
INTRODUCED BY BELAN, STOUT, COSTA, BODACK AND TARTAGLIONE,
MARCH 14, 1997
REFERRED TO LABOR AND INDUSTRY, MARCH 14, 1997
AN ACT
1 Amending the act of June 2, 1915 (P.L.736, No.338), entitled, as
2 reenacted and amended, "An act defining the liability of an
3 employer to pay damages for injuries received by an employe
4 in the course of employment; establishing an elective
5 schedule of compensation; providing procedure for the
6 determination of liability and compensation thereunder; and
7 prescribing penalties," providing for a reduction in
8 insurance rates.
9 The General Assembly of the Commonwealth of Pennsylvania
10 hereby enacts as follows:
11 Section 1. Section 306 of the act of June 2, 1915 (P.L.736,
12 No.338), known as the Workers' Compensation Act, reenacted and
13 amended June 21, 1939 (P.L.520, No.281), is amended by adding a
14 clause to read:
15 Section 306. The following schedule of compensation is
16 hereby established:
17 * * *
18 (f.3) The Insurance Department shall complete an actuarial
19 assessment of the loss reserves held by insurers to determine if
20 the savings due to the medical cost containment provisions under
1 this section necessitate an immediate rebate to the insured. The
2 Insurance Department shall determine the amount, if any, of
3 excess reserves and require insurance companies to rebate these
4 funds based on the insured's prorated premium pursuant to
5 section 306.3. This loss reserve assessment shall be retroactive
6 to the implementation of the medical cost containment provisions
7 under this section. Any insurer aggrieved by the required
8 reserve rebates mandated by this section may seek relief from
9 the Insurance Commissioner. The Insurance Commissioner may grant
10 relief in extraordinary circumstances.
11 * * *
12 Section 2. The act is amended by adding sections to read:
13 Section 306.3. (a) If a policy for an insured is terminated
14 and a rebate is due, the insured shall receive a lump sump
15 rebate.
16 (b) No later than one year from the date on which the policy
17 was terminated the rebate may either be in lump sum or be in the
18 form of prospective policy discounts.
19 (c) Any prospective policy discount can be provided to the
20 insured over a three-year period beginning with the next policy
21 renewal. If a policy is terminated during this three-year
22 period, the insured shall receive the balance of the rebate in
23 lump sum.
24 Section 704.1. (a) An insurer shall reduce its rates by
25 fifteen per centum on all policies issued on or after the
26 effective date of this act. The rates shall remain in effect
27 until the rating organization submits its next loss-cost filing
28 to the department.
29 (b) An insurer aggrieved by rate reductions mandated by this
30 section may seek relief from the Insurance Commissioner. The
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1 Insurance Commissioner may grant relief in extraordinary
2 circumstances.
3 Section 3. This act shall take effect in 60 days.
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