Pennsylvania Code › Title 31 - INSURANCE › Part I - General Provisions › Subpart F - Rules of Procedure › Chapter 59 - REASONS FOR CANCELLATIONS AND REFUSAL TO RENEW; NOTICE AND APPEAL PROCEDURES › Section 59.9 - Nonapplicability of the Acts

Current through Register Vol. 54, No. 28, July 13, 2024
(a) Some
				  insurers affect a renewal of their outstanding policies of insurance merely by
				  sending a renewal premium notice to the insured in advance of the expiration
				  date of his policy. The insured need only make a timely payment of the premium
				  due in order to keep his policy in force. In such a situation the mailing by
				  the insurer of the renewal premium notice does constitute such a manifestation
				  of willingness by the insurer to renew as to come within the purview of section
				  5(c)(1) of The Unfair Insurance Practices Act (40 P. S. §
											1171.5(c)(1)) if mailed not
				  less than 30 days in advance of the expiration date of the policy. If the
				  insurer has manifested its willingness to renew by mailing a renewal notice or
				  issuing a renewal policy and the insured fails to pay the renewal premium when
				  due, the policy shall terminate in accordance with its terms. No further notice
				  to the insured by the insurer of an intention not to renew for nonpayment of
				  premium shall be necessary.
(b) The
				  period of 60 days referred to in section 5(a)(9) and (c)(3) of The Unfair
				  Insurance Practices Act (40 P. S. §
											1171.5(a)(9) and (c)(3)) is
				  intended to provide to insurers a reasonable period of time, if desired, to
				  investigate thoroughly a particular risk while extending coverage during the
				  period of investigation. An insurer may cancel the policy provided it gives at
				  least 30 days notice of the termination and provided it gives notice no later
				  than the 60th day. The insurer's decision to cancel during this 60-day period
				  must not violate section 5(a)(7)(iii) of The Unfair Insurance Practices Act
				  (40
				  P. S. §
											1171.5(a)(7)(iii)).
(c) Insurers are reminded, however, that a
				  regulation of the U.S. Department of Housing and Urban Development as set forth
				  in 24 CFR §
											1905.9. (relating to notice of cancellation
				  or nonrenewal) further limits the right of insurers to cancel or nonrenew
				  policies of property insurance on properties eligible for coverage under the
				  Pennsylvania FAIR Plan.
(d) The
				  pertinent provisions of this regulation provide that:
(a) Except in cases of owner or occupant
				  incendiarism, material misrepresentation or nonpayment of premium, each plan
				  shall require its participating insurers to give, and each such insurer shall
				  give, property owners no less than 30 days prior written notice of any
				  cancellation or nonrenewal of coverage initiated by the insurer with respect to
				  any eligible risk, whether or not such risk is then insured under the Plan, in
				  order to allow the affected property owner sufficient time to apply for an
				  inspection and to obtain coverage under the Plan if necessary.
(b) For the purposes of this § 1905.9,
				  the term cancellation or nonrenewal shall include (1) reductions in amounts of
				  insurance and adverse modifications in coverage initiated by the insurer with
				  respect to any owner individually, and (2) refusals by the insurer or its
				  agents to renew any expiring coverage in any line of essential property
				  insurance previously provided to the property owner.
This requirement, therefore, allows insurers to cancel or
					 nonrenew such policies only if the insured is given 30 days notice of both the
					 cancellation and of the possible availability of coverage under the
					 Pennsylvania FAIR Plan: This applies to such policies both during and after the
					 first 60 days of their issue.