PRINTER'S NO. 62
No. 63 Session of 2003
INTRODUCED BY SCHWARTZ, MELLOW, RHOADES, KUKOVICH, COSTA,
HUGHES, STACK, TARTAGLIONE, STOUT, KITCHEN, KASUNIC, MUSTO,
BOSCOLA, WOZNIAK, LOGAN, O'PAKE AND FUMO, JANUARY 27, 2003
REFERRED TO BANKING AND INSURANCE, JANUARY 27, 2003
AN ACT
1 Amending the act of April 9, 1929 (P.L.177, No.175), entitled
2 "An act providing for and reorganizing the conduct of the
3 executive and administrative work of the Commonwealth by the
4 Executive Department thereof and the administrative
5 departments, boards, commissions, and officers thereof,
6 including the boards of trustees of State Normal Schools, or
7 Teachers Colleges; abolishing, creating, reorganizing or
8 authorizing the reorganization of certain administrative
9 departments, boards, and commissions; defining the powers and
10 duties of the Governor and other executive and administrative
11 officers, and of the several administrative departments,
12 boards, commissions, and officers; fixing the salaries of the
13 Governor, Lieutenant Governor, and certain other executive
14 and administrative officers; providing for the appointment of
15 certain administrative officers, and of all deputies and
16 other assistants and employes in certain departments, boards,
17 and commissions; and prescribing the manner in which the
18 number and compensation of the deputies and all other
19 assistants and employes of certain departments, boards and
20 commissions shall be determined," establishing the Office of
21 Consumer Advocate for Insurance as an independent office
22 within the Office of Attorney General and prescribing its
23 powers and duties.
24 The General Assembly of the Commonwealth of Pennsylvania
25 hereby enacts as follows:
26 Section 1. The act of April 9, 1929 (P.L.177, No.175), known
27 as The Administrative Code of 1929, is amended by adding an
28 article to read:
1 ARTICLE IX-C
2 OFFICE OF CONSUMER ADVOCATE FOR INSURANCE
3 Section 901-C. Definitions.--As used in this article:
4 "Consumer" means any person who is a named insured, insured
5 or beneficiary of a policy of insurance or any other person who
6 may be affected in any way by the Insurance Department's
7 exercise of or the failure to exercise its authority.
8 "Department" means the Insurance Department of the
9 Commonwealth and includes the Insurance Commissioner.
10 "Fund" means the Consumer Advocate for Insurance Fund
11 established pursuant to section 906-C.
12 "Insurer" means any "company," "association" or "exchange" as
13 such terms are defined in section 101 of the act of May 17, 1921
14 (P.L.789, No.285), known as "The Insurance Department Act of
15 1921."
16 Section 902-C. Office of Consumer Advocate for Insurance.--
17 (a) There is hereby established as an independent office within
18 the Office of Attorney General an Office of Consumer Advocate
19 for Insurance appointed by the Governor to represent the
20 interest of consumers before the department.
21 (b) The Office of Consumer Advocate for Insurance shall be
22 headed by the Consumer Advocate for Insurance appointed by the
23 Governor who is an attorney, and by reason of training,
24 experience and attainment is qualified to represent the interest
25 of consumers. Compensation shall be set by the Executive Board.
26 (c) No individual who serves as a Consumer Advocate for
27 Insurance shall, while serving in the position, engage in any
28 business, vocation or other employment, or have other interests,
29 inconsistent with the official responsibilities, nor shall the
30 individual seek or accept employment nor render beneficial
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1 services for compensation with any insurer subject to the
2 authority of the office during the tenure of the appointment and
3 for a period of two years immediately after the appointment is
4 served or terminated.
5 (d) Any individual who is appointed to the position of
6 Consumer Advocate for Insurance shall not seek election nor
7 accept appointment to any political office during the tenure as
8 Consumer Advocate for Insurance and for a period of two years
9 after the appointment is served or terminated.
10 Section 903-C. Assistant Consumer Advocates for Insurance;
11 Employes.--The Consumer Advocate for Insurance shall appoint
12 attorneys as assistant consumer advocates for insurance and
13 additional clerical, technical and professional staff as may be
14 appropriate, and may contract for additional services as shall
15 be necessary for the performance of the duties imposed by this
16 article. The compensation of assistant consumer advocates for
17 insurance and clerical, technical and professional staff shall
18 be set by the Executive Board. No assistant consumer advocate
19 for insurance or other staff employe shall, while serving in the
20 position, engage in any business, vocation or other employment,
21 or have other interests, inconsistent with official
22 responsibilities.
23 Section 904-C. Powers and Duties of the Consumer Advocate
24 for Insurance.--(a) In addition to any other authority
25 conferred by this article, the Consumer Advocate for Insurance
26 is authorized to and shall, in carrying out the responsibilities
27 under this article, represent the interest of consumers as a
28 party, or otherwise participate for the purpose of representing
29 an interest of consumers, before the department in any matter
30 properly before the department, and before any court or agency,
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1 initiating proceedings if, in the judgment of the Consumer
2 Advocate for Insurance, the representation may be necessary, in
3 connection with any matter involving regulation by the
4 department or the corresponding regulatory agency of the Federal
5 Government, whether on appeal or otherwise initiated.
6 (b) The Consumer Advocate for Insurance may exercise
7 discretion in determining the interests of consumers which will
8 be advocated in any particular proceeding and in determining
9 whether or not to participate in or initiate any particular
10 proceeding and, in so determining, shall consider the public
11 interest, the resources available and the substantiality of the
12 effect of the proceeding on the interest of consumers. The
13 Consumer Advocate for Insurance may refrain from intervening
14 when, in the judgment of the Consumer Advocate for Insurance,
15 intervention is not necessary to represent adequately the
16 interest of consumers.
17 (c) In addition to any other authority conferred by this
18 article, the Consumer Advocate for Insurance is authorized to
19 represent an interest of consumers which is presented for
20 consideration, upon petition in writing, by a substantial number
21 of persons who are consumers of an insurer subject to regulation
22 by the department. The Consumer Advocate for Insurance shall
23 notify the principal sponsors of the petition within a
24 reasonable time after receipt of the petition of the action
25 taken or intended to be taken with respect to the interest of
26 consumers presented in that petition. If the Consumer Advocate
27 for Insurance declines or is unable to represent the interest,
28 written notification and the reasons for the action shall be
29 given to the sponsors.
30 (d) Any action brought by the Consumer Advocate for
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1 Insurance before a court or an agency of this Commonwealth shall
2 be brought in the name of the Consumer Advocate for Insurance:
3 Provided, That the Consumer Advocate for Insurance may name a
4 consumer or group of consumers in whose name the action may be
5 brought or may join with a consumer or group of consumers in
6 bringing the action.
7 (e) At a time as the Consumer Advocate for Insurance
8 determines, in accordance with applicable time limitations, to
9 initiate, intervene or otherwise participate in any department,
10 agency or court proceeding, the Consumer Advocate for Insurance
11 shall issue publicly a written statement, a copy of which shall
12 be filed in the proceeding in addition to any required entry of
13 appearance, stating concisely the specific interest of consumers
14 to be protected.
15 (f) The Consumer Advocate for Insurance shall be served with
16 copies of all filings, correspondence or other documents filed
17 by insurers with the department unless the Consumer Advocate for
18 Insurance informs the insurer that specific types of classes of
19 documents need not be so served. The department shall not accept
20 a document as timely filed if the document is also required to
21 be served on the Consumer Advocate for Insurance and the insurer
22 has not indicated that service has or is being made on the
23 Consumer Advocate for Insurance. Insurers shall provide any
24 other nonprivileged information or data requested by the
25 Consumer Advocate for Insurance to the extent that the request
26 is reasonably related to the performance of his duties under
27 this article.
28 Section 905-C. Duties of the Department.--In dealing with
29 any proposed action which may substantially affect the interest
30 of consumers, including, but not limited to, a proposed change
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1 of rates and the adoption of rules, regulations, guidelines,
2 orders, standards or final policy decisions, the department
3 shall:
4 (1) Notify the Consumer Advocate for Insurance and provide,
5 free of charge, copies of all related documents when notice of
6 the proposed action is given to the public or at a time fixed by
7 agreement between the Consumer Advocate for Insurance and the
8 department in a manner to assure the Consumer Advocate for
9 Insurance reasonable notice and adequate time to determine
10 whether to intervene in the matter.
11 (2) Consistent with its other statutory responsibilities,
12 take action with due consideration to the interest of consumers.
13 Section 906-C. Consumer Advocate for Insurance Fund.--(a)
14 There is hereby established a separate account in the State
15 Treasury to be known as the Consumer Advocate for Insurance
16 Fund. This fund shall be administered by the State Treasurer.
17 (b) All moneys deposited into the fund shall be held in
18 trust and shall not be considered general revenue of the
19 Commonwealth but shall be used only to effectuate the purposes
20 of this article. The fund shall be subject to audit by the
21 Auditor General.
22 (c) Prior to the first day of April following the effective
23 date of this article and prior to the first day of April of each
24 year thereafter so long as this article shall remain in effect,
25 each insurer who writes coverages for fire and casualty,
26 accident and health, credit accident and health under
27 life/annuity/accident, health and life including annuities in
28 this Commonwealth, as a condition of its authorization to
29 transact business in this Commonwealth, shall pay into the fund
30 in trust an amount equal to the product obtained by multiplying
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1 five million dollars ($5,000,000) by a fraction, the numerator
2 of which is the direct premium collected for all coverages by
3 that insurer in this Commonwealth during the preceding calendar
4 year and the denominator of which is the direct premium written
5 on such coverages in this Commonwealth by all insurers in the
6 same period. Any insurer who fails to pay the required
7 assessment under this section shall be prohibited from writing
8 any insurance within this Commonwealth.
9 (d) In succeeding years the General Assembly may vary the
10 base amount of five million dollars ($5,000,000) based upon the
11 actual funding experience and requirements of the Office of
12 Consumer Advocate for Insurance.
13 (e) Assessments made under this section shall not be
14 considered burdens and prohibitions under section 212 of the act
15 of May 17, 1921 (P.L.789, No.285), known as "The Insurance
16 Department Act of 1921."
17 (f) In the event that the trust fund is dissolved or the
18 Office of Consumer Advocate for Insurance is terminated by
19 operation of law, any balance remaining in the fund, after
20 deducting administrative costs for liquidation, shall be
21 returned to insurers in proportion to their financial
22 contributions to the fund in the preceding calendar year.
23 Section 907-C. Reports.--The Consumer Advocate for Insurance
24 shall annually transmit to the Governor and to the General
25 Assembly, and shall make available to the public, an annual
26 report on the conduct of the Office of Consumer Advocate for
27 Insurance. The Consumer Advocate for Insurance shall make
28 recommendations as may, from time to time, be necessary or
29 desirable to protect the interest of consumers.
30 Section 908-C. Savings Provision; Construction.--(a)
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1 Nothing contained in this article shall in any way limit the
2 right of any consumer to bring a proceeding before either the
3 department or a court.
4 (b) Nothing contained in this article shall be construed to
5 impair the statutory authority or responsibility of the
6 department to regulate insurers in the public interest.
7 Section 2. This act shall take effect in 90 days.
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