Pennsylvania Act 2024-45 — INSURANCE COMPANY LAW OF 1921 - SURPLUS LINES FEES AND MONTHLY REPORTS

Act text

Session of 2024

No. 2024-45

HB 2096

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 surplus lines, providing for surplus lines fees and further providing for monthly reports.

The General Assembly of the Commonwealth of Pennsylvania hereby enacts as follows:

Section 1. The act of May 17, 1921 (P.L.682, No.284), known as The Insurance Company Law of 1921, is amended by adding a section to read:

Section 1616.1. Surplus Lines Fees.--(a) Notwithstanding section 674-A of the act of May 17, 1921 (P.L.789, No.285), known as "The Insurance Department Act of 1921," a surplus lines licensee may charge a service fee for the placement of a surplus lines insurance policy in addition to a commission received from a surplus lines insurer in accordance with the following requirements:

(1) For personal lines insurance policies, the service fee shall not exceed one hundred fifty ($150) dollars or four per centum (4%) of the policy premium, whichever is greater. The following apply:

(i) The commissioner may increase these amounts by transmitting notice of the increase to the Legislative Reference Bureau for publication in the next available issue of the Pennsylvania Bulletin. The increase shall become effective upon publication of the notice in the Pennsylvania Bulletin.

(ii) The service fee may be charged for each policy.

(2) The service fee shall be reasonable in relation to the cost of underwriting, issuing and processing the policy.

(3) In advance of placement of the policy, the surplus lines licensee shall make clear and conspicuous disclosure in writing of the following:

(i) The total amount of the service fee, if any.

(ii) The total amount of the inspection fee, if any.

(iii) The amount of premium tax due on the policy.

(iv) An itemization of the fee charged for each service.

(v) A disclosure of any compensation payable to the licensee from the entity completing the inspection and ownership interest of the licensee in the entity completing the inspection, but excluding ownership interest that is part of an investment portfolio of publicly traded stock.

(b) A surplus lines licensee may recoup from the prospective insured the actual cost of any inspection required for the placement of surplus lines insurance with a surplus lines insurer if:

(1) The inspection is required.

(2) The cost of the inspection is:

(i) actually incurred by the surplus lines licensee;

(ii) not retained by the surplus lines licensee; and

(iii) documented and verifiable.

Section 2. Section 1620 of the act is amended to read:

Section 1620. Monthly Reports.--Within thirty (30) days following the end of each month, each surplus lines licensee shall file with the department, on forms prescribed by the department, a verified report of all surplus lines insurance transacted during the preceding month. Each report shall include the amount of service fees charged for each surplus lines insurance policy issued.

Section 3. This act shall take effect in 60 days.

APPROVED--The 8th day of July, A.D. 2024.

JOSH SHAPIRO