31 Pa. Code § 67.42 - Phase-in of extraordinary medical benefit coverage
(a)
Mandatory offering. The
act of April 26, 1989 (P. L.___, No. 4) (Act 4) amends the act to require
automobile insurers to offer extraordinary medical benefit (EMB) coverage as of
June 1, 1989. Insurers shall offer to bind this coverage as of June 1, 1989 if
so requested by the policyholder. This includes policyholders who have been
bound or assigned to an insurer under the Assigned Risk Plan. Policyholders who
have already requested EMB or similar coverage from their insurer need not
provide the insurer with additional notice to have this coverage effective as
of June 1, 1989.
(b)
Notice
to policyholders. By May 24, 1989, insurers should send a notice to
policyholders in the form required by section 1798.2(c) of the act (relating to
transition), except that if the insurer is utilizing the interim rate specified
in subsection (e), appropriate revisions may be made in the interest of fully
and accurately informing the policyholder. Insurers that have sent a notice to
policyholders regarding an approved catastrophic loss filing by May 8, 1989
will be deemed to have satisfied the requirement of this subsection.
(c)
Rate filing. Insurers
are required by section 1798.2(b) of the act to make an EMB rate filing with
the Department by May 26, 1989, that date being 30 days from the effective date
of section 1798.2 of the act. This filing requirement includes those insurers
which had obtained Departmental approval of catastrophic loss rates by April
26, 1989-the effective date of section 1798.2 of the act. However, those
insurers may file amendments to their approved catastrophic loss filings with
the changes necessary to comply with Act 4. No initial EMB rate filing or
amendment to an approved catastrophic loss filing may be deemed into
effect.
(d)
Insurers with
approved catastrophic loss rates and forms. Insurers which have
obtained Departmental approval for catastrophic loss rates and forms by April
26, 1989 shall utilize those rates and forms for EMB endorsements issued
effective on or after June 1, 1989 until the Department approves a new EMB rate
or form. The insurer shall pro-rate the catastrophic loss premium to the next
policy renewal. Insurers which are subscribers to a licensed rating
organization that had obtained Departmental approval of catastrophic loss rates
by April 26, 1989 may elect to utilize the rating organization's approved rates
and forms for EMB coverage until the rating organization receives approval of a
revised filing under subsection (c). With approval of the Department,
subscribers may utilize deviations from the rate and form approved for a rating
organization if the deviation provides for a rate reduction and the form
provides more liberal coverage. Insurers planning to utilize the rating
organization's rates and forms or deviations shall inform the Department of
their intent by May 26, 1989.
(e)
Interim rate and forms. Insurers are obligated by Act 4 to
offer to bind EMB coverage as of June 1, 1989. However, Act 4 does not relieve
insurers that had not obtained Departmental approval for catastrophic loss
rates and forms by April 26, 1989 from the requirements under section 4(h) of
the Casualty and Surety Rate Regulatory Act (40 P. S. §
1184(h)) and section 354 of
the Insurance Company Law of 1921 (40 P. S. §
477b) that rates and forms be approved by the
Department prior to use. Under the Commissioner's authority under the Casualty
and Surety Rate Regulatory Act (40 P. S. §§
1181-1199), the requirement of
preapproved rates for EMB coverage is temporarily suspended if an insurer
utilizes the interim Statewide rate of $38 per motor vehicle, per year. The
interim rate is to be utilized for EMB endorsements issued effective on or
after June 1, 1989, until the Department approves the insurer's EMB rate
filing. The interim EMB rate shall be prorated to the next policy renewal.
Insurers not having approved EMB forms may utilize the form in Appendix
A.
(f)
Enforcement
action. The Department may take enforcement action against insurers
failing to offer to bind EMB coverage as of June 1, 1989. However, the
Department will not take enforcement action against insurers utilizing the
interim rates and forms specified in subsection (e) prior to the Department's
approval of n insurer's EMB rates and forms.
Notes
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