2022 Pennsylvania Consolidated & Unconsolidated Statutes
Act 93 - THE INSURANCE COMPANY LAW OF 1921 - OMNIBUS AMENDMENTS
Session of 2022
No. 2022-93
SB 1222
AN ACT
Amending the act of May 17, 1921 (P.L.682, No.284), entitled "An act relating to insurance; amending, revising, and consolidating the law providing for the incorporation of insurance companies, and the regulation, supervision, and protection of home and foreign insurance companies, Lloyds associations, reciprocal and inter-insurance exchanges, and fire insurance rating bureaus, and the regulation and supervision of insurance carried by such companies, associations, and exchanges, including insurance carried by the State Workmen's Insurance Fund; providing penalties; and repealing existing laws," in insurance holding companies, further providing for definitions, for acquisition of control of or merger or consolidation with domestic insurer and for registration of insurers, providing for group capital calculation exemptions, further providing for standards and management of an insurer within an insurance holding company system, for group-wide supervision for international insurance groups and for confidential treatment and providing for compliance with group capital calculation and liquidity stress test requirements; and providing for peer-to-peer carsharing.
The General Assembly of the Commonwealth of Pennsylvania hereby enacts as follows:
Section 1. Section 1401 of the act of May 17, 1921 (P.L.682, No.284), known as The Insurance Company Law of 1921, is amended by adding definitions to read:
Section 1401. Definitions.--As used in this article, and for the purposes of this article only, the following words and phrases shall have the meanings given to them in this section:
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"Group-wide supervisor." The regulatory official authorized to engage in conducting and coordinating group-wide supervision activities who is determined or acknowledged by the department under section 1406.2 to have sufficient significant contacts with an internationally active insurance group.
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"Internationally active insurance group." An insurance holding company system that:
(1) Includes an insurer registered under section 1404.
(2) Meets each of the following criteria:
(i) Has premiums written in at least three countries.
(ii) Has as the percentage of the gross premiums written outside the United States at least ten per centum (10%) of the insurance holding company system's total gross written premiums.
(iii) Based on a three-year rolling average, has total assets of at least fifty billion dollars ($50,000,000,000) or total gross written premiums of at least ten billion dollars ($10,000,000,000).
"Lead state." The state responsible for coordination and communication among state regulators regarding oversight of an insurance group, as determined by the department in consultation with other regulators with domestic insurers in the insurance group.
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"NAIC liquidity stress test framework." A separate NAIC publication that includes the following information as adopted by the NAIC and as amended by the NAIC from time to time in accordance with the procedures adopted by the NAIC:
(1) A history of the NAIC's development of regulatory liquidation stress testing.
(2) The scope criteria applicable for a specific data year.
(3) The liquidity stress test instructions and reporting templates for a specific data year.
(4) The scope criteria, instructions and reporting templates.
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"Scope criteria." As detailed in the NAIC liquidity stress test framework, the designated exposure bases, along with minimum magnitudes, for the specified data year which are used to establish a preliminary list of insurers considered scoped into the NAIC liquidity stress test framework for that data year.
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Section 2. Sections 1402(b)(11.1) and 1404(a)(1), (d) and (k.1) of the act are amended to read:
Section 1402. Acquisition of Control of or Merger or Consolidation with Domestic Insurer.--* * *
(b) The statement to be filed with the department under this section shall be made under oath or affirmation and shall contain the following information:
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(11.1) An agreement by the person required to file the statement referred to in subsection (a) that it will provide the annual enterprise risk report specified in section [1404(k.1)] 1404(k.1)(1) as long as control exists.
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Section 1404. Registration of Insurers.--(a) (1) Every insurer which is authorized to do business in this Commonwealth and which is a member of an insurance holding company system shall register with the department, except a foreign insurer subject to registration requirements and standards adopted by statute or regulation in the jurisdiction of its domicile which are substantially similar to those contained in this section and section 1405(a)(1) and (2), (b) and [(d)] (d)(1). Each registered insurer shall keep current the information required to be disclosed in its registration statement by reporting all material changes or additions within fifteen (15) days after the end of the month in which it learns of each such change or addition.
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(d) (1) No information need be disclosed on the registration statement filed pursuant to subsection (b) if such information is not material for the purposes of this section.
(2) Unless the department by regulation or order provides otherwise, sales, purchases, exchanges, loans or extensions of credit, investments or guarantees involving one-half of one per centum (0.5%) or less of an insurer's admitted assets as of the thirty-first day of December next preceding shall not be deemed material for purposes of this section.
(3) Paragraph (2) does not apply to the group capital calculation or the liquidity stress test framework.
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(k.1) (1) The ultimate controlling person of every insurer subject to registration shall also file an annual enterprise risk report. The report must, to the best of the ultimate controlling person's knowledge and belief, identify the material risks within the insurance holding company system that could pose enterprise risk to the insurer. The report must be filed with the lead state regulator of the insurance holding company system as determined by the procedures within the Financial Analysis Handbook adopted by the NAIC. Beginning in 2014, and every year thereafter, the report shall be filed by March 31 for the previous calendar year.
(2) Except as provided in paragraph (3), the ultimate controlling person of every insurer subject to registration shall concurrently file with the registration an annual group capital calculation report as directed by the lead state regulator of the insurance holding company system. The report shall be completed in accordance with the NAIC group capital calculation instructions, which may permit the lead state regulator to allow a controlling person that is not the ultimate controlling person to file the group capital calculation. The report shall be filed with the lead state regulator of the insurance holding company system as directed by the commissioner in accordance with the procedures outlined in the Financial Analysis Handbook adopted by the NAIC.
(3) The following insurance holding company systems are not required to file the group capital calculation:
(i) An insurance holding company system that has only one insurer within the insurance holding company system structure, only writes business in a domestic state and is only licensed in a domestic state and assumes no business from any other insurer.
(ii) An insurance holding company system that is required to perform a group capital calculation specified by the Federal Reserve Board. The commissioner shall request the calculation from the Federal Reserve Board under the terms of information sharing agreements in effect. If the Federal Reserve Board cannot share the calculation with the commissioner, the insurance holding company system is not exempt from the group capital calculation filing.
(iii) An insurance holding company system whose group-wide supervisor is located within a reciprocal jurisdiction as defined in section 319.3(k) that recognizes the United States' state regulatory approach to group supervision and group capital.
(iv) An insurance holding company system:
(A) That provides information to the lead state regulator that meets the requirements for accreditation under the NAIC financial standards and accreditation program, either directly or indirectly through the group-wide supervisor, who has determined the information is satisfactory to allow the lead state regulator to comply with the NAIC group supervision approach, as detailed in the NAIC Financial Analysis Handbook.
(B) Whose group-wide supervisor, located outside the United States and not in a reciprocal jurisdiction as defined in section 319.3(k), recognizes and accepts the group capital calculation as the worldwide group capital assessment for United States insurance groups who operate in that reciprocal jurisdiction.
(4) Notwithstanding paragraph (3)(iii) and (iv), the commissioner, as the lead state regulator, shall require the group capital calculation for United States-based operations of any non-United States-based insurance holding company system where, after necessary consultation with other supervisors or officials, the group capital calculation is deemed appropriate by the lead state regulator for prudential oversight and solvency monitoring purposes or for ensuring the competitiveness of the insurance marketplace.
(5) In addition to and notwithstanding the entities described in paragraph (3), the commissioner, as the lead state regulator, has the discretion to exempt the ultimate controlling person from filing the annual group capital calculation or accept a limited group capital filing or report in accordance with criteria specified in section 1404.1.
(6) If the commissioner, as the lead state regulator, determines that an insurance holding company system no longer meets one or more of the requirements of paragraph (3), the insurance holding company system shall file the group capital calculation at the next annual filing date unless given an extension by the lead state regulator based on reasonable grounds shown.
(7) The ultimate controlling person of an insurer subject to registration and also scoped into the NAIC liquidity stress test framework shall file the results of a specific year's liquidity stress test with the lead state regulator of the insurance holding company system in accordance with the procedures in the NAIC Financial Analysis Handbook and the following standards:
(i) With regard to the development of the NAIC liquidity stress test framework, the following standards are recognized:
(A) The NAIC liquidity stress test framework includes scope criteria applicable to a specific data year.
(B) The scope criteria are reviewed at least annually by the NAIC Financial Stability Task Force or its successor.
(C) Any change to the NAIC liquidity stress test framework or to the data year for which the scope criteria are to be measured shall be effective on January 1 of the year following the calendar year when the changes are adopted.
(D) Insurers meeting at least one threshold of the scope criteria are considered scoped into the NAIC liquidity stress test framework for the specified data year unless the lead state regulator, in consultation with the NAIC Financial Stability Task Force or its successor, determines the insurer should not be scoped into the NAIC liquidity stress test framework for that data year.
(E) Insurers that do not trigger at least one threshold of the scope criteria are considered scoped out of the NAIC liquidity stress test framework for the specified data year, unless the lead state regulator, in consultation with the NAIC Financial Stability Task Force or its successor, determines the insurer should be scoped into the NAIC liquidity stress test framework for that data year.
(ii) The performance of, and filing of the results from, a specific year's NAIC liquidity stress test shall comply with the NAIC liquidity stress test framework's instructions and reporting templates for that year and, if applicable, with any determinations by the lead state regulator and the NAIC Financial Stability Task Force or its successor, provided within the NAIC liquidity stress test framework.
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Section 3. The act is amended by adding a section to read:
Section 1404.1. Group Capital Calculation Exemptions.--(a) The commissioner, as the lead state regulator, has the discretion to exempt the ultimate controlling person from filing the annual group capital calculation where the insurance holding company system meets all of the following criteria:
(1) Has annual direct written and unaffiliated assumed premium, including international direct and assumed premium, but excluding premiums reinsured with the Federal Crop Insurance Corporation and National Flood Insurance Program, of less than one billion dollars ($1,000,000,000).
(2) Has no insurers within the insurance holding company system that are domiciled outside of the United States or one of its territories.
(3) Has no banking, depository or other financial entity that is subject to an identified regulatory capital framework within the insurance holding company system.
(4) Attests that there have been no material changes in the transactions between insurers and noninsurers in the insurance holding company system during the last year.
(5) The noninsurers within the insurance holding company system do not pose a material financial risk to the insurer's ability to honor policyholder obligations.
(b) The commissioner, as the lead state regulator, has the discretion to accept a limited group capital filing in lieu of the group capital calculation if the insurance holding company system has annual direct written and unaffiliated assumed premiums, including international direct and assumed premiums, but excluding premiums reinsured with the Federal Crop Insurance Corporation and National Flood Insurance Program, of less than one billion dollars ($1,000,000,000) and all of the following criteria are met:
(1) The insurance holding company system has no insurers that are domiciled outside of the United States or one of its territories.
(2) The insurance holding company system does not include a banking, depository or other financial entity that is subject to an identified regulatory capital framework.
(3) The insurance holding company system attests that there have been no material changes in transactions between insurers and noninsurers in the group during the last year and the noninsurers within the insurance holding company system do not pose a material financial risk to the insurer's ability to honor policyholder obligations.
(c) For an insurance holding company system that has previously met an exemption with respect to the group capital calculation under subsections (a) and (b), the commissioner may at any time require, as the lead state regulator, the ultimate controlling person to file an annual group capital calculation, completed in accordance with the NAIC group capital calculation instructions if any of the following criteria are met:
(1) An insurer within the insurance holding company system is in a company action level event under Article V of the act of May 17, 1921 (P.L.789, No.285), known as "The Insurance Department Act of 1921," or a similar standard for an insurer outside the United States.
(2) An insurer within the insurance holding company system meets one or more of the standards of an insurer deemed to be in hazardous financial condition as described in Article V of "The Insurance Department Act of 1921," and 31 Pa. Code Ch. 160 (relating to standards to define insurers deemed to be in hazardous financial condition).
(3) An insurer within the insurance holding company system otherwise exhibits qualities of a troubled insurer as determined by the lead state regulator based on unique circumstances, including the type and volume of business written, ownership and organizational structure, Federal agency requests and international supervisor requests.
(d) A jurisdiction outside the United States is considered to recognize and accept the group capital calculation if it satisfies the following criteria:
(1) The jurisdiction meets the criteria under section 1404(k.1)(3)(iv) in accordance with the following:
(i) The jurisdiction is located outside of the United States and recognizes the United States' state regulatory approach to group supervision and group capital by providing confirmation from a competent regulatory authority in the jurisdiction that insurers and insurance groups whose lead state is accredited by the NAIC under the NAIC Accreditation Program shall be subject only to worldwide prudential insurance group-wide supervision, including worldwide group governance, solvency and capital and reporting, as applicable, by the lead state and will not be subject to group-wide supervision, including worldwide group governance, solvency and capital and reporting, at the level of the worldwide parent undertaking of the insurance or reinsurance group by the jurisdiction located outside the United States.
(ii) If no United States-based insurance groups operate in the jurisdiction outside the United States, that jurisdiction outside the United States notifies the lead state regulator in writing, with a copy to the IAIS, that the group capital calculation is an acceptable international capital standard. The notification shall serve as the confirmation required under subparagraph (i).
(2) The entities located outside the United States' jurisdiction provide confirmation by a competent regulatory authority in the jurisdiction under paragraph (1)(ii) that information regarding insurers and the parent, subsidiary or affiliated entities, if applicable, shall be provided to the lead state regulator in accordance with a memorandum of understanding or similar document between the commissioner and the jurisdiction, including the IAIS multilateral memorandum of understanding or other multilateral memoranda of understanding coordinated by the NAIC. The commissioner shall determine, in consultation with the NAIC committee process, if the requirements of the information sharing agreements are in force.
(e) A list of jurisdictions outside the United States that recognize and accept the group capital calculation will be published through the NAIC committee process in accordance with the following standards:
(1) A list of jurisdictions that recognize and accept the group capital calculation under section 1404(k.1)(3)(iv) shall be published through the NAIC committee process to assist the lead state regulator in determining which insurers shall file an annual group capital calculation. The list must clarify those situations in which a jurisdiction is exempt from filing under section 1404(k.1)(3)(iv). To assist with a determination under section 1404(k.1)(3)(v), the list shall identify whether a jurisdiction that is exempt under section 1404(k.1)(3)(iii) or (iv) requires a group capital filing for any United States-based insurance group's operations in a jurisdiction outside the United States.
(2) For a jurisdiction outside the United States that no United States-based insurance group operates, the confirmation provided to meet the requirement of subsection (d)(1)(ii) will serve as support for a recommendation to be published as a jurisdiction that recognizes and accepts the group capital calculation through the NAIC committee process.
(3) If the commissioner, as the lead state regulator, makes a determination under section 1404(k.1)(3)(iv) that differs from the NAIC list in paragraph (4), the lead state regulator shall provide documented justification to the NAIC and other states.
(4) Upon determination that a jurisdiction outside of the United States no longer meets one or more of the requirements to recognize and accept the group capital calculation, the commissioner, as the lead state regulator, may provide a recommendation to the NAIC that the jurisdiction outside the United States be removed from the list of jurisdictions that recognize and accept the group capital calculation.
Section 4. Section 1405(a)(1) of the act is amended by adding subparagraphs and the subsection is amended by adding a paragraph to read:
Section 1405. Standards and Management of an Insurer within an Insurance Holding Company System.--(a) (1) Transactions within an insurance holding company system to which an insurer subject to registration is a party shall be subject to all of the following standards:
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(vi) (A) If the commissioner deems an insurer subject to this act to be in hazardous financial condition, as determined by the commissioner under 31 Pa. Code Ch. 160 (relating to standards to define insurers deemed to be in hazardous financial condition) or a condition that would be grounds for supervision, conservation or a delinquency proceeding, the commissioner may require the insurer to secure and maintain a deposit, held by the commissioner, or a bond, as determined by the insurer at the insurer's discretion, for the protection of the insurer for the duration of the contract or agreement, or the existence of the condition for which the commissioner required the deposit or bond. In determining whether a deposit or bond is required, the commissioner may consider whether concerns exist with respect to the affiliated person's ability to fulfill the contract or agreement if the insurer were to be put into liquidation.
(B) If the insurer is deemed to be in a hazardous financial condition or a condition that would be grounds for supervision, conservation or a delinquency proceeding, and a deposit or bond is necessary, the commissioner has discretion to determine the amount of the deposit or bond, not to exceed the value of the contract or agreement in any one year, and whether the deposit or bond should be required for a single contract, multiple contracts or a contract only with a specific person.
(vii) (A) All records and data of the insurer held by an affiliate are and remain the property of the insurer, are subject to control of the insurer, are identifiable, and are segregated or readily capable of segregation, at no additional cost to the insurer, from all other persons' records and data.
(B) Records and data under clause (A) include all records and data that are otherwise the property of the insurer, in whatever form maintained, including claims and claim files, policyholder lists, application files, litigation files, premium records, rate books, underwriting manuals, personnel records, financial records or similar records within the possession, custody or control of the affiliate.
(C) At the request of the insurer, the affiliate shall advise that the receiver may obtain a complete set of all records of any type that pertain to the insurer's business, obtain access to the operating systems on which the data is maintained, obtain the software that runs those systems either through assumption of licensing agreements or otherwise and restrict the use of the data by the affiliate if it is not operating the insurer's business.
(D) The affiliate shall provide a waiver of any landlord lien or other encumbrance to give the insurer access to all records and data in the event of the affiliate's default under a lease or other agreement.
(viii) Premiums or other funds belonging to the insurer that are collected by or held by an affiliate are the exclusive property of the insurer and are subject to the control of the insurer. Any right of offset in the event an insurer is placed into receivership shall be subject to Article V of the act of May 17, 1921 (P.L.789, No.285), known as "The Insurance Department Act of 1921."
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(6) Supervision, seizure, conservatorship or receivership proceedings. The following shall apply:
(i) An affiliate that is party to an agreement or contract with a domestic insurer that is subject to paragraph (2)(v) shall be subject to the jurisdiction of any supervision, seizure, conservatorship or receivership proceedings against the insurer and to the authority of any supervisor, conservator, rehabilitator or liquidator for the insurer appointed pursuant to supervision and receivership acts for the purpose of interpreting, enforcing and overseeing the affiliate's obligations under the agreement or contract to perform services for the insurer that:
(A) are an integral part of the insurer's operations, including management, administrative, accounting, data processing, marketing, underwriting, claims handling, investment or any other similar functions; or
(B) are essential to the insurer's ability to fulfill its obligations under insurance policies.
(ii) The commissioner may require that an agreement or contract under subsection (a)(2)(v) for the provision of services under subparagraph (i)(A) and (B) specify that the affiliate consents to the jurisdiction under this paragraph.
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Section 5. Sections 1406.2(j) and 1407 of the act are amended to read:
Section 1406.2. Group-wide Supervision for International Insurance Groups.--* * *
[(j) As used in this section, the following words and phrases shall have the meanings given to them in this subsection unless the context clearly indicates otherwise:
"Group-wide supervisor." The chief insurance regulatory official authorized to engage in conducting and coordinating group-wide supervision activities who is from the jurisdiction determined or acknowledged by the department under subsection (c) to have sufficient significant contacts with the international insurance group.
"International insurance group." An insurance group operating internationally that includes an insurer registered under section 1404.]
Section 1407. Confidential Treatment.--(a) All information, documents, materials and copies thereof in the possession or control of the department that are produced by, obtained by or disclosed to the department or any other person in the course of an examination or investigation made pursuant to section 1406 or investigation made pursuant to section 1406.1 or 1406.2 and all information reported pursuant to sections 1402(b)(11.1) and (11.2), 1404 and 1405 are recognized as being proprietary and constituting intellectual property, and shall be privileged and given confidential treatment and shall not be:
(1) Subject to discovery or admissible in evidence in a private civil action.
(2) Subject to subpoena.
(3) Subject to the act of February 14, 2008 (P.L.6, No.3), known as the "Right-to-Know Law."
(4) Made public by the department or any other person, except to regulatory or law enforcement officials of other jurisdictions or group supervisors or members of a supervisory college in accordance with subsection (c), without the prior written consent of the insurer to which it pertains unless the department, after giving the insurer and its affiliates who would be affected thereby notice and opportunity to be heard, determines that the interest of policyholders, shareholders or the public will be served by the publication thereof, in which event it may publish all or any part thereof in such manner as it may deem appropriate.
(a.1) For purposes of the information reported and provided to the department under section 1404(k.1)(2), the commissioner shall maintain the confidentiality of the group capital calculation report and supporting disclosures and any group capital information received from an insurance holding company system supervised by the Federal Reserve Board or any United States group-wide supervisor.
(a.2) For purposes of the information reported and provided to the department under section 1404(k.1)(6), the commissioner shall maintain the confidentiality of the liquidity stress test results and supporting disclosures and any liquidity stress test information received from an insurance holding company system supervised by the Federal Reserve Board and and a group-wide supervisor located outside the United States.
(b) The commissioner, department or any individual or person who receives documents, materials or other information while acting under the authority of the commissioner or department or with whom such documents, materials or other information are shared under this article shall not be permitted or required to testify in any private civil action concerning any confidential documents, materials or information covered under this section.
(c) In order to assist in the performance of its duties, the department may do any of the following:
(1) Share confidential and privileged documents, materials or other information covered under this section, including proprietary and intellectual property, documents, materials and information, with regulatory or law enforcement officials of this Commonwealth or other jurisdictions, the IAIS, the NAIC and its affiliates and subsidiaries, group supervisors and members of any supervisory college under section 1406.1, and any third party consultants retained by the commissioner, enforcement officials, the IAIS, the NAIC, group-wide supervisor or members of a supervisory college, provided that prior to receiving the documents, materials or other information, the recipient demonstrates by written statement the necessary authority and intent to provide the same confidential treatment to the documents, materials and information as required by this article. The department may only share confidential and privileged documents, materials or information reported under section 1404(k.1) with state insurance regulators having statutes or regulations substantially similar to subsection (a) and who have agreed in writing not to disclose such confidential and privileged documents, materials and information.
(2) Receive and maintain as confidential and privileged any documents, materials or other information, including proprietary and intellectual property, documents, materials and information, from the IAIS or the NAIC and its affiliates and subsidiaries or from regulatory and law enforcement officials of this Commonwealth or other jurisdictions in which the documents, materials or other information are confidential by law in those jurisdictions. Documents, materials or other information obtained under this section shall be given confidential treatment, may not be subject to subpoena and may not be made public by the department, commissioner or any other person.
(d) The department shall enter into written agreements with the IAIS or the NAIC and any third-party consultant retained by the commissioner, the IAIS or the NAIC governing the sharing and use of information provided under this article, that include all of the following:
(1) Specific procedures and protocols regarding the confidentiality and security of information shared with the IAIS or the NAIC [and its affiliates and subsidiaries] or a third-party consultant retained by the commissioner, the IAIS or the NAIC under this article, including procedures and protocols for sharing by the IAIS or the NAIC or a third-party consultant retained by the commissioner, the IAIS or the NAIC with other Federal, state or international regulators. The agreement shall provide that the recipient agrees in writing to maintain the confidentiality and privileged status of the documents, materials or other information and has verified in writing the legal authority to maintain the confidentiality.
(2) Provisions specifying that ownership of information shared with the IAIS or the NAIC [and its affiliates and subsidiaries] or a third-party consultant under this article remains with the department and that the use of the information by the IAIS or the NAIC or a third-party consultant retained by the commissioner, the IAIS or the NAIC is subject to the approval of the department.
(2.1) A provision specifying that, with the exception of documents, material or information under section 1404(k.1)(6), the NAIC, or a third-party consultant under this article, is prohibited from storing information shared under this article in a permanent database after the underlying analysis is completed.
(3) A provision providing that the IAIS or the NAIC and its affiliates and subsidiaries, or a third-party consultant under this article, will, where permitted by law, give prompt notice to the department and the insurer regarding any subpoena, request for disclosure or request for production of the insurer's confidential information in the possession of the IAIS or the NAIC or a third-party consultant under this article.
(4) A requirement that the IAIS or the NAIC and its affiliates and subsidiaries, or a third-party consultant under this article, will consent to intervention by an insurer in any judicial or administrative action in which the IAIS or the NAIC and its affiliates and subsidiaries, or a third-party consultant under this article may be required to disclose confidential information about the insurer that was shared with the IAIS or the NAIC and its affiliates and subsidiaries, or a third-party consultant under this article.
(5) For documents, materials or information reporting under section 1404(k.1)(6), in the case of an agreement involving a third-party consultant, a provision for the notification of the identity of the consultant to the department and applicable insurers.
(e) The sharing of information by the department under this article shall not constitute a delegation of regulatory authority or rulemaking.
(f) The department is solely responsible for the administration, execution and enforcement of the provisions of this article.
(g) The sharing of information by the department as authorized by subsection (c) shall not constitute a waiver of any applicable privilege or claim of confidentiality in the documents, materials or information.
(h) Documents, materials or other information in the possession or control of the IAIS or the NAIC or a third-party consultant as provided under this article shall:
(1) Be confidential and privileged.
(2) Not be subject to the "Right-to-Know Law."
(3) Not be subject to subpoena.
(4) Not be subject to discovery or admissible in evidence in any private civil action.
(i) The group capital calculation results and supporting disclosures and any group capital calculation information required under section 1404(k.1)(2) and the liquidity stress test results and supporting disclosures and any liquidity stress test information required under section 1404(k.1)(7) are regulatory tools for assessing group capital adequacy, group liquidity and associated risks. These tools are not intended as a means to rank insurers or insurance holding company systems generally and will be used in accordance with the following standards:
(1) Except as otherwise required under this article, directly or indirectly, making, publishing, disseminating, circulating or placing before the public in a newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over any radio or television station or any electronic means of communication available to the public, or in any other way as an advertisement, announcement or statement containing, a representation or statement with regard to the group capital calculation results, the liquidity stress test results and associated supporting disclosures and information of any insurer or any insurer group, or of any component derived in the calculation by any insurer, broker or other person engaged in any manner in the insurance business, is misleading and prohibited.
(2) If any materially false statement with respect to the group capital calculation, resulting group capital ratio, an inappropriate comparison of any amount to an insurer's or insurance group's group capital calculation or resulting group capital ratio, liquidity stress test result, supporting disclosures for the liquidity stress test or an inappropriate comparison of any amount to an insurer's or insurance group's liquidity stress test result or supporting disclosures is published in any written publication and the insurer is able to demonstrate to the commissioner with substantial proof the falsity of such statement or the inappropriateness, as the case may be, then the insurer may publish announcements in any written publication if the sole purpose of the announcement is to rebut the materially false statement.
Section 6. The act is amended by adding a section to read:
Section 1414. Compliance with Group Capital Calculation and Liquidity Stress Test Requirements.--(a) An insurer that is part of an internationally active insurance group shall comply with the requirement to file a group capital calculation report under section 1404(k.1)(2) upon the effective date of this section. All other insurers shall comply with the requirement to file a group capital calculation no later than January 1, 2026.
(b) An insurer shall be subject to the liquidity stress test requirements of section 1404(k.1)(7) on January 1, 2023.
Section 7. The act is amended by adding an article to read:
ARTICLE XXVIII
PEER-TO-PEER CARSHARING
Section 2801. Scope of article.
This article relates to peer-to-peer carsharing.
Section 2802. Intent.
This article is intended to govern the intersection of peer-to-peer car services and the State-regulated business of insurance. Nothing in this article shall be construed to extend beyond insurance or have implications for other law of this State, including motor vehicle regulation, airport regulation or taxation.
Section 2803. Definitions.
The following words and phrases when used in this article shall have the meanings given to them in this section unless the context clearly indicates otherwise:
"Carsharing delivery period." The period of time during which a shared vehicle is being delivered to the location of the carsharing start time, if applicable, as documented by a governing carsharing program agreement.
"Carsharing period." The period of time that commences with a carsharing delivery period or, if there is no carsharing delivery period, that commences with a carsharing start time and in either case ends at a carsharing termination time.
"Carsharing program agreement." The terms and conditions applicable to a shared vehicle owner and a shared vehicle driver that govern the use of a shared vehicle through a peer-to-peer carsharing program. The term does not include a rental car agreement.
"Carsharing start time." The time when a shared vehicle becomes subject to the control of the shared vehicle driver at or after the time the reservation of the shared vehicle is scheduled to begin as documented in the records of a peer-to-peer carsharing program.
"Carsharing termination time." The earliest of the following events:
(1) the expiration of the agreed-upon period of time established for the use of a shared vehicle according to the terms of the carsharing program agreement if the shared vehicle is delivered to the location agreed upon in the carsharing program agreement;
(2) a shared vehicle is returned to a location as alternatively agreed upon by the shared vehicle owner and shared vehicle driver as communicated through a peer-to-peer carsharing program, which alternatively agreed-upon location shall be incorporated into the carsharing program agreement; or
(3) a shared vehicle owner or the shared vehicle owner's authorized designee takes possession and control of the shared vehicle.
"Peer-to-peer carsharing." The authorized use of a vehicle by an individual other than the vehicle's owner through a peer-to-peer carsharing program. The term does not include a rental car obtained through a rental car company.
"Peer-to-peer carsharing program." A business platform that connects vehicle owners with drivers to enable the sharing of vehicles for financial consideration.
"Rental car" or "rental vehicle." A private passenger motor vehicle designed to transport 15 or fewer passengers or a truck, trailer or semitrailer used in the transportation of property other than commercial freight, that is rented without a driver and is part of a fleet of five or more such vehicles used for that purpose, owned or leased by the same person or entity.
"Rental car company." A business entity engaged in the business of renting rental vehicles in this Commonwealth.
"Shared vehicle." A vehicle that is available for sharing through a peer-to-peer carsharing program. The term does not include a rental car or rental vehicle.
"Shared vehicle driver." An individual who has been authorized to drive a shared vehicle by the shared vehicle owner under a carsharing program agreement.
"Shared vehicle owner." The registered owner, or a person or entity designated by the registered owner, of a vehicle made available for sharing to shared vehicle drivers through a peer-to-peer carsharing program.
Section 2804. Insurance.
(a) Insurance coverage during carsharing period.--
(1) A peer-to-peer carsharing program shall assume liability, except as provided under paragraph (2), of a shared vehicle owner for bodily injury or property damage to third parties or uninsured and underinsured motorist or personal injury protection losses during the carsharing period in an amount stated in the carsharing program agreement which amount may not be less than those specified in 75 Pa.C.S. Ch. 17 (relating to financial responsibility).
(2) Notwithstanding the definition of "carsharing termination time," the assumption of liability under paragraph (1) of this subsection does not apply to a shared vehicle owner when:
(i) the shared vehicle owner makes an intentional or fraudulent material misrepresentation or omission to the peer-to-peer carsharing program before the carsharing period in which the loss occurred; or
(ii) acting in concert with a shared vehicle driver who fails to return the shared vehicle pursuant to the terms of the carsharing program agreement.
(3) Notwithstanding the definition of "carsharing termination time," the assumption of liability under paragraph (1) shall apply to bodily injury, property damage, uninsured and underinsured motorist or personal injury protection losses by damaged third parties required by 75 Pa.C.S. Ch. 17.
(4) A peer-to-peer carsharing program shall ensure that, during each carsharing period, the shared vehicle owner and the shared vehicle driver are insured under a motor vehicle liability insurance policy that provides insurance coverage in amounts no less than the minimum amounts specified in 75 Pa.C.S. Ch. 17 and:
(i) recognizes that the shared vehicle insured under the policy is made available and used through a peer-to-peer carsharing program; or
(ii) does not exclude use of a shared vehicle by a shared vehicle driver.
(5) The insurance described under paragraph (4) may be satisfied by motor vehicle liability insurance maintained by:
(i) a shared vehicle owner;
(ii) a shared vehicle driver;
(iii) a peer-to-peer carsharing program; or
(iv) a shared vehicle owner, a shared vehicle driver and a peer-to-peer carsharing program.
(6) The insurance described under paragraph (5) that satisfies the insurance requirement of paragraph (4) shall be primary during each carsharing period and in the event that a claim occurs in another state with minimum financial responsibility limits higher than specified in 75 Pa.C.S. Ch. 17, during the carsharing period, the coverage maintained under paragraph (5) shall satisfy the difference in minimum coverage amounts, up to the applicable policy limits.
(7) The insurer, insurers or peer-to-peer carsharing program providing coverage under paragraph (4) or (5) shall assume primary liability for a claim when:
(i) a dispute exists as to who was in control of the shared vehicle at the time of the loss and the peer-to-peer carsharing program does not have available, did not retain or fails to provide the information required by subsection (d); or
(ii) a dispute exists as to whether the shared vehicle was returned to the alternatively agreed-upon location as required by this article.
(8) If insurance maintained by a shared vehicle owner or shared vehicle driver in accordance with paragraph (5) has lapsed or does not provide the required coverage, insurance maintained by a peer-to-peer carsharing program shall provide the coverage required by paragraph (4) beginning with the first dollar of a claim and have the duty to defend such claim except under circumstances as provided under paragraph (2).
(9) Coverage under an automobile insurance policy maintained by the peer-to-peer carsharing program shall not be dependent on another automobile insurer first denying a claim nor shall another automobile insurance policy be required to first deny a claim.
(10) Nothing in this section shall be construed to:
(i) limit the liability of the peer-to-peer carsharing program for an act or omission of the peer-to-peer carsharing program itself that results in injury to a person as a result of the use of a shared vehicle through a peer-to-peer carsharing program; or
(ii) limit the ability of the peer-to-peer carsharing program to, by contract, seek indemnification from a shared vehicle owner or a shared vehicle driver for economic loss sustained by a peer-to-peer carsharing program resulting from a breach of the terms and conditions of the carsharing program agreement.
(b) Notification of implications of lien.--At the time when a vehicle owner registers as a shared vehicle owner on a peer-to-peer carsharing program and prior to the time when the shared vehicle owner makes a shared vehicle available for carsharing on the peer-to-peer carsharing program, the peer-to-peer carsharing program shall notify the shared vehicle owner that, if the shared vehicle has a lien against it, the use of the shared vehicle through a peer-to-peer carsharing program, including use without physical damage coverage, may violate the terms of the contract with the lienholder.
(c) Exclusions in motor vehicle liability insurance policies.--
(1) An authorized insurer that writes motor vehicle liability insurance in this Commonwealth may exclude any and all coverage and the duty to defend or indemnify for a claim afforded under a shared vehicle owner's motor vehicle liability insurance policy, including:
(i) liability coverage for bodily injury and property damage;
(ii) personal injury protection coverage;
(iii) uninsured and underinsured motorist coverage;
(iv) medical payments coverage;
(v) comprehensive physical damage coverage; and
(vi) collision physical damage coverage.
(2) Nothing in this article shall be construed to:
(i) Invalidate or limit an exclusion contained in a motor vehicle liability insurance policy, including an insurance policy in use or approved for use that excludes coverage for motor vehicles made available for rent, sharing or hire or for any business use.
(ii) Invalidate, limit or restrict an insurer's ability under existing law to underwrite any insurance policy.
(iii) Invalidate, limit or restrict an insurer's ability under existing law to cancel and nonrenew policy.
(d) Recordkeeping and use of vehicle in carsharing.--
(1) A peer-to-peer carsharing program shall collect and verify records pertaining to the use of a vehicle, including times used, carsharing period pickup and drop off locations, fees paid by the shared vehicle driver and revenues received by the shared vehicle owner and provide that information upon request to the shared vehicle owner, the shared vehicle owner's insurer or the shared vehicle driver's insurer to facilitate a claim coverage investigation, settlement, negotiation or litigation.
(2) The peer-to-peer carsharing program shall retain the records for a time period not less than the applicable personal injury statute of limitations.
(e) Exemption and vicarious liability.--A peer-to-peer carsharing program and a shared vehicle owner shall be exempt from vicarious liability in accordance with 49 U.S.C. § 30106 (relating to rented or leased motor vehicle safety and responsibility) and under any State or local law that imposes liability solely based on vehicle ownership.
(f) Contribution against indemnification.--A motor vehicle insurer that defends or indemnifies a claim against a shared vehicle that is excluded under the terms of the policy shall have the right to seek recovery against the motor vehicle insurer of the peer-to-peer carsharing program if the claim is:
(1) Made against the shared vehicle owner or the shared vehicle driver for loss or injury that occurs during the carsharing period.
(2) Excluded under the terms of the policy.
(g) Insurable interest.--
(1) Notwithstanding any other law, statute, rule or regulation to the contrary, a peer-to-peer carsharing program shall have an insurable interest in a shared vehicle during the carsharing period.
(2) Nothing in this subsection shall be construed as creating liability on a peer-to-peer carsharing program to maintain the coverage mandated by subsection (a).
(3) A peer-to-peer carsharing program may own and maintain as the named insured one or more policies of motor vehicle liability insurance that provides coverage for:
(i) liabilities assumed by the peer-to-peer carsharing program under a carsharing program agreement;
(ii) liability of the shared vehicle owner;
(iii) damage or loss to the shared vehicle; or
(iv) liability of the shared vehicle driver.
Section 2805. Consumer protection disclosures.
A carsharing program agreement shall disclose to the shared vehicle owner and the shared vehicle driver:
(1) A right of the peer-to-peer carsharing program to seek indemnification from the shared vehicle owner or the shared vehicle driver for economic loss sustained by the peer-to-peer carsharing program resulting from a breach of the terms and conditions of the carsharing program agreement.
(2) That a motor vehicle liability insurance policy issued to the shared vehicle owner for the shared vehicle or to the shared vehicle driver does not provide a defense or indemnification for a claim asserted by the peer-to-peer carsharing program.
(3) That the peer-to-peer carsharing program's insurance coverage on the shared vehicle owner and the shared vehicle driver is in effect only during each carsharing period and that, for any use of the shared vehicle by the shared vehicle driver after the carsharing termination time, the shared vehicle driver and the shared vehicle owner may not have insurance coverage.
(4) The daily rate, fees and, if applicable, insurance or protection package costs that are charged to the shared vehicle owner or the shared vehicle driver.
(5) That the shared vehicle owner's motor vehicle liability insurance may not provide coverage for a shared vehicle.
(6) An emergency telephone number to personnel capable of fielding roadside assistance and other customer service inquiries.
(7) If there are conditions under which a shared vehicle driver must maintain a personal automobile insurance policy with certain applicable coverage limits on a primary basis in order to book a shared vehicle.
Section 2806. Driver's license verification.
(a) Conditions for carsharing program agreement.--A peer-to-peer carsharing program may not enter into a carsharing program agreement with a driver unless the driver who will operate the shared vehicle:
(1) holds a driver's license issued by the Department of Transportation that authorizes the driver to operate vehicles of the class of the shared vehicle;
(2) is a nonresident who:
(i) has a driver's license issued by the state or country of the driver's residence that authorizes the driver in that state or country to drive vehicles of the class of the shared vehicle; and
(ii) is at least the same age as that required of a resident to drive; or
(3) otherwise is specifically authorized by law to drive vehicles of the class of the shared vehicle.
(b) Data retention.--A peer-to-peer carsharing program shall keep a record of:
(1) The name and address of the shared vehicle driver.
(2) The number of the driver's license of the shared vehicle driver and each other person, if any, who will operate the shared vehicle.
(3) The place of issuance of the driver's license.
Section 2807. Responsibility for equipment.
A peer-to-peer carsharing program shall have sole responsibility for equipment, such as a GPS system or other special equipment that is put in or on the shared vehicle to monitor or facilitate the carsharing transaction, and shall agree to indemnify and hold harmless the shared vehicle owner for damage to or theft of the equipment during the carsharing period not caused by the shared vehicle owner. The peer-to-peer carsharing program has the right to seek indemnity from the shared vehicle driver for loss or damage to the equipment that occurs during the carsharing period.
Section 2808. Automobile safety recalls.
(a) Verification and notification.--At the time when a vehicle owner registers as a shared vehicle owner on a peer-to-peer carsharing program and prior to the time when the shared vehicle owner makes a shared vehicle available for carsharing on the peer-to-peer carsharing program, the peer-to-peer carsharing program shall:
(1) Verify that the shared vehicle does not have any safety recalls on the vehicle for which the repairs have not been made.
(2) Notify the shared vehicle owner of the requirements under subsection (b).
(b) Effect of safety recall.--
(1) If the shared vehicle owner has received an actual notice of a safety recall on the vehicle, a shared vehicle owner may not make the vehicle available as a shared vehicle on a peer-to-peer carsharing program until the safety recall repair has been made.
(2) If a shared vehicle owner receives an actual notice of a safety recall on a shared vehicle while the shared vehicle is available on the peer-to-peer carsharing program, the shared vehicle owner shall remove the shared vehicle as available on the peer-to-peer carsharing program as soon as practicably possible after receiving the notice of the safety recall and until the safety recall repair has been made.
(3) If a shared vehicle owner receives an actual notice of a safety recall while the shared vehicle is being used in the possession of a shared vehicle driver, as soon as practicably possible after receiving the notice of the safety recall, the shared vehicle owner shall notify the peer-to-peer carsharing program about the safety recall so that the shared vehicle owner may address the safety recall repair.
Section 2809. Regulations.
The Insurance Commissioner may promulgate rules and regulations that are not inconsistent with and necessary to administer and enforce the provisions of this article.
Section 8. This act shall take effect as follows:
(1) The following shall take effect immediately:
(i) This section.
(ii) The addition of Article XXVIII of the act.
(2) The remainder of this act shall take effect in 60 days.
APPROVED--The 11th day of July, A.D. 2022.
TOM WOLF
