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§ 991.1301. Definitions

Purdon's Pennsylvania Statutes and Consolidated StatutesTitle 40 P.S. Insurance

Purdon's Pennsylvania Statutes and Consolidated Statutes
Title 40 P.S. Insurance (Refs & Annos)
Chapter 2. Insurance Companies (Refs & Annos)
Article XIII. Broker Controlled Property and Casualty Insurers
40 P.S. § 991.1301
§ 991.1301. Definitions
Currentness
As used in this article the following words and phrases shall have the meanings given to them in this section:
“Broker.” A person, copartnership or corporation, not an officer or agent of the company, association or exchange interested, who or which, for compensation, acts or aids in any manner in obtaining insurance for a person other than himself or itself. An attorney-in-fact authorized by and acting for the subscribers of a reciprocal insurer or interinsurance exchange under powers of attorney shall not be considered a broker for the purposes of this article.
“Commissioner.” The Insurance Commissioner of the Commonwealth.
“Control,” “controlled” and “controlling.” These terms shall have the meaning ascribed in section 1401.1
“Department.” The Insurance Department of the Commonwealth.
“Independent casualty actuary.” A casualty actuary who is a member in good standing of the American Academy of Actuaries and who is not affiliated with, nor an employe, a principal, nor the direct or indirect owner of, or in any way controlled by an insurer or broker.
“Licensed property or casualty insurer” or “insurer.” Any person, firm, association or corporation duly licensed to transact a property or casualty insurance business in this Commonwealth. The following, inter alia, are not deemed to be licensed property or casualty insurers for the purposes of this article:
(1) All nonadmitted insurers.
(2) All risk retention groups as defined in the Superfund Amendments and Reauthorization Act of 1986 (Public Law 99-499, 100 Stat. 1613) and Article XV.2
(3) All residual market pools and joint underwriting authorities or associations.
(4) All captive insurers, which shall include, but not be limited to, insurance companies owned by another organization whose exclusive purpose is to insure risks of the parent organization and affiliated companies or, in the case of groups and associations, insurance organizations owned by the insureds whose exclusive purpose is to insure risks of member organizations or group members and their affiliates.
(5) Licensed foreign insurers domiciled in a state having in effect a law substantially similar to this article.
“Reinsurance intermediary.” Any person, firm, association or corporation which acts as a broker in soliciting, negotiating or procuring the making of any reinsurance contract or binder on behalf of a ceding insurer or acts as a broker in accepting any reinsurance contract or binder on behalf of an assuming insurer.
“Violation.” A finding by the Insurance Department of any one or more of the following:
(1) The controlling broker did not materially comply with section 1302.3
(2) The controlled insurer, with respect to business placed by the controlling broker, engaged in a pattern of charging premiums that were lower than those being charged by such insurer or other insurers for similar risks written during the same period and placed by noncontrolling brokers. When determining whether premiums were lower than those prevailing in the market, the Insurance Department shall take into consideration applicable industry or actuarial standards at the time the business was written.
(3) The controlling broker failed to maintain records sufficient:
(i) to demonstrate that such broker's dealings with its controlled insurer were fair and equitable and in compliance with the provisions of Article XIV;4 and
(ii) to accurately disclose the nature and details of its transactions with the controlled insurer, including such information as is necessary to support the charges or fees to the respective parties.
(4) The controlled insurer, with respect to business placed by the controlling broker, either failed to establish or deviated from its underwriting procedures.
(5) The controlled insurer's capitalization at the time the business was placed by the controlling broker and with respect to such business was not in compliance with criteria established by the Insurance Department or otherwise by the insurance laws or regulations of this Commonwealth.
(6) The controlling broker or the controlled insurer failed to substantially comply with the provisions of Article XIV and any rules and regulations relative thereto.

Credits

1921, May 17, P.L. 682, No. 284, art. XIII, § 1301, added 1992, Dec. 18, P.L. 1519, No. 178, § 19, effective in 120 days. Amended 1994, Feb. 17, P.L. 92, No. 9, § 11, imd. effective.

Footnotes

1
40 P.S. § 991.1401.
2
40 P.S. § 991.1501 et seq.
3
40 P.S. § 991.1302.
4
40 P.S. § 991.1401 et seq.
40 P.S. § 991.1301, PA ST 40 P.S. § 991.1301
Current through Act 10 of the 2024 Regular Session. Some statute sections may be more current, see credits for details.
End of Document