Case Name: INSURANCE FEDERATION OF PENNSYLVANIA, INC., Petitioner . v. Diane KOKEN, Insurance Commissioner, Respondent
Court: Commonwealth Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 2002-06-17
Citations: 801 A.2d 622
Docket Number: 
Parties: INSURANCE FEDERATION OF PENNSYLVANIA, INC., Petitioner . v. Diane KOKEN, Insurance Commissioner, Respondent.
Judges: Before: COLINS, President Judge, and McGINLEY, Judge, PELLEGRINI, Judge, FRIEDMAN, Judge, LEADBETTER, Judge, COHN, Judge, and SIMPSON, Judge.
Reporter: West's Atlantic Reporter, Second Series
Volume: 801
Pages: 622–635

Head Matter:
INSURANCE FEDERATION OF PENNSYLVANIA, INC., Petitioner . v. Diane KOKEN, Insurance Commissioner, Respondent.
Commonwealth Court of Pennsylvania.
Argued April 10, 2002.
Decided June 17, 2002.
As Amended June 17, 2002.
John F. Mizner, Erie, for petitioner.
W. Christopher C. Doane and Terrence A. Keating, Harrisburg, for respondent.
Dale G. Larrimore, Philadelphia, for amicus curiae, PA Trial Lawyers Ass’n.
Before: COLINS, President Judge, and McGINLEY, Judge, PELLEGRINI, Judge, FRIEDMAN, Judge, LEADBETTER, Judge, COHN, Judge, and SIMPSON, Judge.

Opinion:
Opinion by
President Judge COLINS.
The Insurance Federation of Pennsylvania, Inc. (Federation) petitions for review of the order of Diane Koken, Insurance Commissioner of the Commonwealth of Pennsylvania (Commissioner), denying its petition for declaratory order.
In August 1996, Liberty Mutual Insurance Company, a member of the Federation, filed with the Insurance Department a revision to its private passenger uninsured/underinsured motorist (UM/UIM) coverage that would eliminate the arbitration provisions and have all claims disputes in this area settled by the courts. The Department invited comment, and in October 1996, it disapproved the revision. By letter of disapproval, it determined that the removal of the arbitration provisions failed to meet the requirements of 31 Pa. Code § 68.2, at least as to uninsured motorist coverage, but it disapproved the entire revision. Liberty Mutual did not challenge the determination.
The Federation and its members take the position that the Department has no statutory authority to require the arbitration provisions and that the arbitration provisions are not required by statute. The Federation requested a formal administrative hearing and declaratory order challenging the Department's authority to require mandatory arbitration of UM and UIM coverage disputes. By way of response, the Department asserted that it is authorized to require mandatory arbitration. The parties filed a joint statement of undisputed facts. Common pleas court judges and the Pennsylvania Trial Lawyers Association submitted comments opposing the removal of arbitration provisions.
In July 2001, the Commissioner denied the Federation's petition, concluding that the Insurance Department has the authority to disapprove automobile insurance policies that do not provide for binding arbitration of UM and UIM coverage disputes. As the basis for its authority, the Commissioner cites the law popularly known as the Uninsured Motorist Coverage Act; Sections 1704(b) and 1731 of the Motor Vehicle Financial Responsibility Law (MVFRL), 75 Pa.C.S. § 1704(b) and 1731; Section 354 of The Insurance Department Act of 1921; 31 Pa.Code § 63.2; Prudential Property and Casualty Insurance Company v. Muir, 99 Pa.Cmwlth. 620, 513 A.2d 1129 (1986), petition for allowance of appeal denied, 514 Pa. 637, 522 A.2d 1106 (1987); and public policy.
This Court's decision in Muir addressed the same issues raised in the merits of the Federation's claim, and that case controls the outcome in the present matter. In Muir, the Department disapproved policy filings that deleted or modified the UM arbitration clause. On appeal, the insurer challenged the Department's authority to require the arbitration clause and the arbitration clause's constitutionality vis-á-vis the insured's right to a jury trial.
Based primarily on the statutory grant of authority in the Uninsured Motorist Coverage Act, this Court en banc concluded that the Department has the authority to approve UM coverage provisions in insurance contracts and to promulgate regulations with respect to such coverage. Deferring to the Department's expertise in promoting the purposes of the Uninsured Motorist Coverage Act, we held that the Department had the implied authority to require arbitration of UM coverage disputes.
Although the Uninsured Motorist Coverage Act and Muir do not address UIM coverage, the Department's statutory and regulatory authority to mandate arbitra-tion of UIM coverage disputes are found in the MVFRL, 75 Pa.C.S. § 1731, which mandates UIM coverage as well as UM coverage, and 75 Pa.C.S. § 1704(b), which expressly establishes the Department's administrative, regulatory, and enforcement authority over UIM coverage provisions in insurance contracts. We agree with the Commissioner's interpretation of the MVFRL as contemplating uniform treatment of UM and UIM coverage provisions.
In Department of Transportation v. Beam, 567 Pa. 492, 788 A.2d 357 (2002), the Pennsylvania Supreme Court most recently explained the limits of an administrative agency's implied authority as only that necessary to effectuate its express mandates. In our view, our decision in Muir recognized those limitations and continues to be a viable precedent. Since that time, in the MVFRL, the General Assembly has reinforced its .express mandate that the Department administer, regulate, and enforce the statutory UM and UIM coverage requirements, and we remain convinced that the Department has the implied authority to require arbitration of UM and UIM coverage disputes. By requiring arbitration of UM and UIM coverage disputes, the Insurance Department is furthering the legislative purposes of the Uninsured Motorist Coverage Act and MVFRL to provide the maximum restoration and compensation of victims of automobile accidents and protecting accident victims from financially irresponsible drivers. As we noted in Muir, "arbitration provides the most expeditious manner, as well as the least expensive, of accomplishing this salient goal." 513 A.2d at 1130.
We do not address the Federation's remaining arguments as they were not expressly raised in petition for review or fairly comprised within the general statement of the Federation's objections to the Commissioner's determination. Pa. R.A.P. 1513.
Accordingly, the order of the Commissioner is affirmed.
ORDER
AND NOW, this 17th day of June 2002, the order of the Insurance Commissioner in the above-captioned matter is affirmed.
PELLEGRINI, J., concurs and files opinion.
SIMPSON, J., dissents and files opinion.
.Act of August 14, 1963, P.L. 909, as amended, 40 P.S. § 2000. This section states,
(a) No motor vehicle liability policy of insurance insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle shall be delivered or issued for delivery in this State with respect to any motor vehicle registered or principally garaged in this State, unless coverage is provided therein or supplemental thereto in limits for bodily injury or death as are fixed from time to time by the General Assembly in section 1421 of article XIV of "The Vehicle Code," act of April 29, 1959 (P.L. 58), under provisions approved by the Insurance Commissioner, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness or disease, including death resulting therefrom[J
. This section generally mandates that the Insurance Department exercise administrative, regulatory, and enforcement authority over insurance matters under the MVFRL.
. 75 Pa.C.S. § 1731 states in pertinent part,
(a) Mandatory Offering. — No motor vehicle liability insurance policy shall be delivered or issued for delivery in this Commonwealth, with respect to any motor vehicle registered or principally garaged in this Commonwealth, unless uninsured motorist and underinsured motorist coverages are offered therein or supplemental thereto in amounts as provided in section 1734 (relating to request for lower limits of coverage). Purchase of uninsured motorist and under-insured motorist coverages is optional.
Subsections (b) and (c) state that the named insured shall be informed that he may reject UM and UIM coverage by signing written rejection forms.
. Act of May 17, 1921, P.L. 682, as amended, 40 P.S. § 477b, added by Section 2 of the Act of June 23, 1931, P.L. 904. This section states in pertinent part,
It shall be unlawful for any insurance company, . to issue, sell, or dispose of any policy, contract, or certificate covering life, health, accident, personal liability, fire, marine, title, and all forms of casualty insurance . until the forms of the same have been submitted to and formally approved by the Insurance Commissioner, and copies filed in the Insurance Department, except riders and endorsements relating to the manner of distribution of benefits, and used at the request of the individual policy holder, and except any forms which, in the opinion of the Insurance Commissioner, do not require [her] approval.