RULES AND REGULATIONS
[ 31 PA. CODE CH. 163 ]
Requirements for Funds Held as Security for the Payment of Obligations of Unlicensed, Unqualified Reinsurers
[43 Pa.B. 2819]
[Saturday, May 25, 2013]
The Insurance Department (Department) amends Chapter 163 (relating to requirements for funds held as security for the payment of obligations of unlicensed, unqualified reinsurers) under the authority of sections 206, 506, 1501 and 1502 of The Administrative Code of 1929 (71 P. S. §§ 66, 186, 411 and 412), regarding the general rulemaking authority of the Department, and sections 319—319.2 of The Insurance Company Law of 1921 (act) (40 P. S. §§ 442—442.2).
The purpose of this final-form rulemaking is to update Chapter 163 in accordance with amendments made to section 319.1 of the act by the act of July 5, 2012 (P. L. 1111, No. 136) (Act 136), which grants the Insurance Commissioner (Commissioner) the authority to ''certify'' reinsurers so that ceding insurers may receive credit for reinsurance ceded to duly certified reinsurers. This amendment was proposed in conjunction with amendments to Chapter 161 (relating to requirements for qualified and certified reinsurers). Specifically, Chapter 163 is amended to clarify that the requirements of Chapter 163 do not apply to assuming reinsurers that have been duly certified by the Commissioner as permitted by Act 136.
Comments and Response
Notice of proposed rulemaking was published at 42 Pa.B. 5628 (September 1, 2012) with a 30-day comment period. Comments were received from the Insurance Federation of Pennsylvania and Ace Group expressing support for the amendment. On October 31, 2012, the Independent Regulatory Review Commission (IRRC) indicated that it did not have comments objections, comments or recommendations regarding the amendment.
This final-form rulemaking applies to insurance companies domesticated in this Commonwealth and the reinsurers with whom they do business.
The final-form rulemaking will strengthen and clarify existing regulatory requirements. There will not be material increase in cost to the Department as a result of this final-form rulemaking.
While Chapter 163 does not have immediate fiscal impact on the general public, the general public will benefit to the extent that allowing reduced collateral for reinsurers that are financially solvent and licensed in well-regulated jurisdictions will reduce the cost of reinsurance to ceding insurers in this Commonwealth and reduce trade barriers allowing for more competition in the reinsurance marketplace.
This final-form rulemaking will not impose additional costs on political subdivisions.
This final-form rulemaking will not impose significant costs on the transaction of business in this Commonwealth.
This final-form rulemaking will become effective on June 24, 2013. The Department continues to monitor the effectiveness of regulations on a triennial basis. Therefore, a sunset date has not been assigned.
Questions regarding this final-form rulemaking may be addressed in writing to Peter J. Salvatore, Regula- tory Coordinator, Insurance Department, 1326 Strawberry Square, Harrisburg, PA 17120, fax (717) 705-3873, email@example.com.
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on August 22, 2012, the Department submitted a copy of the notice of proposed rulemaking, published at 42 Pa.B. 5628, to IRRC and the Chairpersons of the House Insurance Committee and the Senate Banking and Insurance Committee for review and comment.
Under section 5(c) of the Regulatory Review Act, IRRC and the House and Senate Committees were provided with copies of the comments received during the public comment period, as well as other documents when requested. In preparing the final-form rulemaking, the Department has considered all comments from IRRC, the House and Senate Committees and the public.
Under section 5.1(j.2) of the Regulatory Review Act (71 P. S. § 745.5a(j.2)), on November 14, 2012, the final-form rulemaking was deemed approved by the House and Senate Committees. Under section 5(g) of the Regulatory Review Act, the final-form rulemaking was deemed approved by IRRC effective November 14, 2012.
The Commissioner finds that:
(1) Public notice of intention to adopt this final-form rulemaking was given under sections 201 and 202 of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. §§ 1201 and 1202) and the regulations thereunder, 1 Pa. Code §§ 7.1 and 7.2.
(2) The adoption of this final-form rulemaking in the manner provided in this order is necessary and appropriate for the administration and enforcement of the authorizing statutes.
The Commissioner, acting under the authorizing statutes, orders that:
(a) The regulations of the Department, 31 Pa. Code Chapter 163, are amended by amending § 163.1 to read as set forth at 42 Pa.B. 5628.
(b) The Department shall submit this order and 42 Pa.B. 5628 to the Office of General Counsel and Office of Attorney General for approval as to form and legality as required by law.
(c) The Department shall certify this order and 42 Pa.B. 5628 and deposit them with the Legislative Reference Bureau as required by law.
(d) The final-form regulation adopted by this order shall take effect June 24, 2013.
MICHAEL F. CONSEDINE,
(Editor's Note: See 43 Pa.B. 2816 (May 25, 2013) for a final-form rulemaking by the Department relating to this final-form rulemaking.)
(Editor's Note: For the text of the order of the Independent Regulatory Review Commission relating to this document, see 43 Pa.B. 2530 (May 4, 2013).)
Fiscal Note: Fiscal Note 11-250 remains valid for the final adoption of the subject regulation.
[Pa.B. Doc. No. 13-951. Filed for public inspection May 24, 2013, 9:00 a.m.]
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