Pennsylvania Code › Title 31 - INSURANCE › Part II - Automobile Insurance › Chapter 67 - CATASTROPHIC LOSS BENEFITS CONTINUATION FUND › Subchapter D - STATEMENTS OF POLICY › Section 67.42 - Phase-in of extraordinary medical benefit coverage

Current through Register Vol. 54, No. 28, July 13, 2024
(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.