HB 2464 — An Act amending the act of May 17, 1921 (P.L.682, No.284), known as The Insurance Company Law of 1921, in benefits for alcohol abuse and dependence, further providing for definitions, for inpatient detoxification, for nonhospital residential alcohol or other drug services, for outpatient alcohol or other drug services and for rules and regulations; and making editorial changes.

SECTION 351.

TESTIMONY;

PRODUCTION OF BOOKS, ET CETERA.--NO PERSON SHALL BE EXCUSED FROM TESTIFYING OR FROM PRODUCING ANY BOOKS, PAPERS, CONTRACTS, AGREEMENTS, OR DOCUMENTS AT ANY HEARING HELD BY THE INSURANCE COMMISSIONER, OR AT THE TRIAL OR HEARING BEFORE ANY [MAGISTRATE, JUSTICE OF THE PEACE] MAGISTERIAL DISTRICT JUDGE OR JUDGE, OF ANY PERSON OR COMPANY CHARGED WITH VIOLATING ANY OF THE PROVISIONS OF SECTIONS THREE HUNDRED AND FORTY-SIX (346), THREE HUNDRED AND FORTY-SEVEN (347), THREE HUNDRED AND FORTY-EIGHT (348), AND THREE HUNDRED AND FORTY-NINE (349) OF THIS ACT, ON THE GROUND THAT SUCH TESTIMONY OR EVIDENCE MAY TEND TO INCRIMINATE HIMSELF, BUT NO PERSON SHALL BE PROSECUTED FOR ANY ACT CONCERNING WHICH HE SHALL 20260HB2464PN3617 - 4 - BE COMPELLED SO TO TESTIFY OR PRODUCE EVIDENCE, DOCUMENTARY OR OTHERWISE, EXCEPT FOR PERJURY COMMITTED IN SO TESTIFYING.

SECTION 354.

APPROVAL OF POLICIES, CONTRACTS, ETC.;

PROHIBITING THE USE THEREOF UNLESS APPROVED;

JUDICIAL REVIEW;

PENALTY.--IT SHALL BE UNLAWFUL FOR ANY INSURANCE COMPANY, ASSOCIATION, OR EXCHANGE, INCLUDING DOMESTIC MUTUAL FIRE INSURANCE COMPANIES, DOING BUSINESS IN THIS COMMONWEALTH, TO ISSUE, SELL, OR DISPOSE OF ANY POLICY, CONTRACT, OR CERTIFICATE, COVERING LIFE, HEALTH, ACCIDENT, PERSONAL LIABILITY, FIRE, MARINE, TITLE, AND ALL FORMS OF CASUALTY INSURANCE, OR CONTRACTS PERTAINING TO PURE ENDOWMENTS OR ANNUITIES, OR ANY OTHER CONTRACTS OF INSURANCE, OR USE APPLICATIONS, RIDERS, OR ENDORSEMENTS, IN CONNECTION THEREWITH, UNTIL THE FORMS OF THE SAME HAVE BEEN SUBMITTED TO AND FORMALLY APPROVED BY THE INSURANCE COMMISSIONER, AND COPIES FILED IN THE INSURANCE DEPARTMENT, EXCEPT RIDERS AND ENDORSEMENTS RELATING TO THE MANNER OF DISTRIBUTION OF BENEFITS, AND TO THE RESERVATION OF RIGHTS AND BENEFITS UNDER ANY SUCH POLICY, AND USED AT THE REQUEST OF THE INDIVIDUAL POLICYHOLDER, AND EXCEPT ANY FORMS WHICH, IN THE OPINION OF THE INSURANCE COMMISSIONER, DO NOT REQUIRE HIS APPROVAL.

FORMS SO FILED, FORMS FILED UNDER THE ACT, APPROVED THE ELEVENTH DAY OF MAY, ONE THOUSAND NINE HUNDRED FORTY-NINE (PAMPHLET LAWS 1210), OR ANY AMENDMENTS THEREOF, OR FILED UNDER ANY OTHER SECTION OF THIS LAW, SHALL BE DEEMED APPROVED AT THE EXPIRATION OF THIRTY (30) DAYS AFTER FILING, UNLESS EARLIER APPROVED OR DISAPPROVED BY THE INSURANCE COMMISSIONER.

THE INSURANCE COMMISSIONER, BY WRITTEN NOTICE TO THE INSURER MAY, WITHIN SUCH THIRTY-DAY PERIOD, EXTEND THE PERIOD FOR APPROVAL OR DISAPPROVAL FOR AN ADDITIONAL THIRTY (30) DAYS.

20260HB2464PN3617 - 5 - SUCH APPROVAL SHALL BECOME VOID UPON ANY SUBSEQUENT NOTICE OF DISAPPROVAL FROM THE INSURANCE COMMISSIONER, OR UPON ANY SUBSEQUENT WITHDRAWAL OF LICENSE OF REFUSAL OF THE INSURANCE COMMISSIONER TO RELICENSE ANY SUCH COMPANY, ASSOCIATION, OR EXCHANGE, OR UPON THE SUBSEQUENT PASSAGE OF AN ACT WHICH WOULD NO LONGER MAKE SUCH CONTRACTS OR RELATED FORMS A FIT SUBJECT FOR APPROVAL, EXCEPT THAT THIS PROVISION SHALL NOT AFFECT CONTRACTS ISSUED PRIOR THERETO.

UPON ANY DISAPPROVAL, THE INSURANCE COMMISSIONER SHALL NOTIFY THE INSURER IN WRITING, SPECIFYING THE REASON FOR SUCH DISAPPROVAL;

AND WITHIN THIRTY (30) DAYS FROM THE DATE OF MAILING OF SUCH NOTICE TO THE INSURER, SUCH INSURER MAY MAKE WRITTEN APPLICATION TO THE INSURANCE COMMISSIONER FOR A HEARING THEREON, AND SUCH HEARING SHALL BE HELD WITHIN THIRTY (30) DAYS AFTER RECEIPT OF SUCH APPLICATION.

THE PROCEDURE BEFORE THE INSURANCE COMMISSIONER SHALL BE IN ACCORDANCE WITH THE ADJUDICATION PROCEDURE SET FORTH IN [THE "ADMINISTRATIVE AGENCY LAW,"] 2 PA.C.S.

CHS.

5 SUBCH.

A (RELATING TO PRACTICE AND PROCEDURE OF COMMONWEALTH AGENCIES) AND 7 SUBCH.

A (RELATING TO JUDICIAL REVIEW OF COMMONWEALTH AGENCY ACTION), AND THE INSURER SHALL BE ENTITLED TO THE JUDICIAL REVIEW AS PROVIDED FOR IN SAID LAW.

ANY PERSON, CORPORATION, INSURANCE COMPANY, EXCHANGE, ORDER, OR SOCIETY THAT SHALL, EITHER AS PRINCIPAL OR AGENT, ISSUE, OR CAUSE TO BE ISSUED, ANY POLICY OR CONTRACT OF INSURANCE WITHIN THE COMMONWEALTH, CONTRARY TO THIS SECTION, SHALL BE GUILTY OF A MISDEMEANOR, AND, UPON CONVICTION THEREOF, SHALL BE SENTENCED TO PAY A FINE NOT EXCEEDING FIVE HUNDRED DOLLARS ($500.00).

UPON SATISFACTORY EVIDENCE OF THE VIOLATION OF THIS SECTION BY ANY SUCH PERSON, CORPORATION, INSURANCE COMPANY, EXCHANGE, 20260HB2464PN3617 - 6 - ORDER, OR SOCIETY, THE INSURANCE COMMISSIONER MAY, IN HIS DISCRETION, PURSUE ANY ONE OR MORE OF THE FOLLOWING COURSES OF ACTION:

(1) SUSPEND OR REVOKE THE LICENSE OF SUCH OFFENDING PERSON, CORPORATION, INSURANCE COMPANY, EXCHANGE, ORDER OR SOCIETY;

(2) REFUSE, FOR A PERIOD OF NOT TO EXCEED ONE YEAR THEREAFTER, TO ISSUE A NEW LICENSE TO SUCH PERSON, CORPORATION, INSURANCE COMPANY, EXCHANGE, ORDER, OR SOCIETY;

(3) IMPOSE A FINE OF NOT MORE THAN ONE THOUSAND DOLLARS ($1,000.00) FOR EACH AND EVERY ACT IN VIOLATION OF THIS ACT.

SECTION 404.2.

INVESTMENT.--SUBJECT TO THE PROVISIONS OF SECTIONS 405.2 AND 406.1, THE ASSETS OF ANY LIFE INSURANCE COMPANY ORGANIZED UNDER THE LAWS OF THIS COMMONWEALTH SHALL BE INVESTED IN THE FOLLOWING CLASSES OF INVESTMENT, PROVIDED THE VALUE OF WHICH, AS DETERMINED FOR ANNUAL STATEMENT PURPOSES, BUT IN NO EVENT IN EXCESS OF COST, SHALL NOT EXCEED THE SPECIFIED PERCENTAGE OF SUCH COMPANY'S ASSETS AS OF THE THIRTY-FIRST DAY OF DECEMBER NEXT PRECEDING THE DATE OF INVESTMENT:

* * * (16) OTHER LOANS AND INVESTMENTS:

(I) LOANS OR INVESTMENTS NOT AUTHORIZED BY ANY OF THE CLAUSES OF THIS SECTION TO AN AMOUNT NOT EXCEEDING THE AGGREGATE OF TWENTY PER CENTUM (20%) OF SUCH COMPANY'S ADMITTED ASSETS.

THE TWENTY PER CENTUM (20%) LIMITATION PROVIDED ABOVE SHALL BE INCREASED IN THE SAME AMOUNT THAT INVESTMENTS APPROVED BY THE INSURANCE COMMISSIONER ARE MADE IN THE FOLLOWING CATEGORIES OF INVESTMENTS PROVIDED THAT THEIR PRINCIPAL OPERATIONS OR LOCATIONS ARE LOCATED IN THIS COMMONWEALTH:

* * * (C) INVESTMENTS IN BUSINESSES LOCATED IN ENTERPRISE ZONES DESIGNATED BY THE DEPARTMENT OF COMMUNITY [AFFAIRS] AND ECONOMIC 20260HB2464PN3617 - 7 - DEVELOPMENT.

(D) INVESTMENTS IN HOUSING FOR FAMILIES AND PERSONS OF LOW INCOME OR IN HOUSING IN ENTERPRISE ZONES DESIGNATED BY THE DEPARTMENT OF COMMUNITY [AFFAIRS] AND ECONOMIC DEVELOPMENT.

* * * SECTION 2.

THE DEFINITION OF "FRATERNAL BENEFIT SOCIETY" IN SECTION 401-A OF THE ACT IS AMENDED TO READ:

SECTION 401-A.

DEFINITIONS.--AS USED IN THIS ARTICLE, THE FOLLOWING WORDS AND PHRASES SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION:

* * * "FRATERNAL BENEFIT SOCIETY." ANY ENTITY LICENSED TO ENGAGE IN THE BUSINESS OF INSURANCE UNDER [THE ACT OF DECEMBER 14, 1992 (P.L.835, NO.134), KNOWN AS THE "FRATERNAL BENEFIT SOCIETIES CODE."] ARTICLE XXIV.

* * * SECTION 3.

SECTIONS 508(I) AND 518C(A)(12)(I)(C) AND (D) OF THE ACT ARE AMENDED TO READ:

SECTION 508.

MUNICIPAL CERTIFICATE REQUIRED PRIOR TO PAYMENT OF FIRE LOSS CLAIMS.--* * * (I) WHEN AN ORDINANCE IS FIRST PASSED OR ADOPTED BY A MUNICIPALITY UNDER SUBSECTIONS (A) AND (B) OF THIS SECTION OR SUBSECTIONS (C) AND (D) OF THIS SECTION, OR BOTH, AN EXACT COPY OF THE ORDINANCE SHALL BE FILED WITH THE DEPARTMENT OF COMMUNITY [AFFAIRS] AND ECONOMIC DEVELOPMENT, TOGETHER WITH THE NAME, POSITION AND PHONE NUMBER OF THE MUNICIPAL OFFICIAL RESPONSIBLE FOR COMPLIANCE WITH THIS SECTION.

EACH MUNICIPALITY ENACTING AN ORDINANCE UNDER THIS SECTION SHALL SUPPLY THE INFORMATION REQUIRED BY THIS SUBSECTION TO THE DEPARTMENT OF COMMUNITY [AFFAIRS] AND ECONOMIC DEVELOPMENT AS PART OF THE IMPLEMENTATION 20260HB2464PN3617 - 8 - OF ITS ORDINANCE.

THE DEPARTMENT OF COMMUNITY [AFFAIRS] AND ECONOMIC DEVELOPMENT SHALL PERIODICALLY PRODUCE A REGISTER LISTING THOSE MUNICIPALITIES FILING THE ORDINANCE.

THIS REGISTER SHALL BE MADE AVAILABLE TO INSURANCE COMPANIES AT MINIMUM COST.

AN INSURANCE COMPANY, ASSOCIATION OR EXCHANGE SHALL NOT BE REQUIRED TO COMPLY WITH ANY MUNICIPAL ORDINANCE IF THE MUNICIPALITY FAILS TO PROVIDE A COPY OF THE ORDINANCE TO THE DEPARTMENT OF COMMUNITY [AFFAIRS] AND ECONOMIC DEVELOPMENT.

* * * SECTION 518C.

ELIGIBLE INVESTMENTS.--(A) EVERY DOMESTIC STOCK FIRE, STOCK MARINE OR STOCK FIRE AND MARINE INSURANCE COMPANY SHALL INVEST AND KEEP INVESTED ALL ITS FUNDS IN SOUND INVESTMENTS ENUMERATED BELOW, EXCEPT SUCH CASH AS MAY BE REQUIRED IN THE TRANSACTION OF ITS BUSINESS.

SUCH INVESTMENTS SHALL INCLUDE:

* * * (12) OTHER LOANS AND INVESTMENTS:

(I) LOANS OR INVESTMENTS NOT AUTHORIZED BY ANY OF THE CLAUSES OF THIS SECTION, TO AN AMOUNT NOT EXCEEDING THE AGGREGATE OF TWENTY PERCENTUM (20%) OF SUCH COMPANY'S ADMITTED ASSETS.

THE TWENTY PERCENTUM (20%) LIMITATION PROVIDED ABOVE SHALL BE INCREASED IN THE SAME AMOUNT THAT INVESTMENTS APPROVED BY THE INSURANCE COMMISSIONER ARE MADE IN THE FOLLOWING CATEGORIES OF INVESTMENTS PROVIDED THAT THEIR PRINCIPAL OPERATIONS OR LOCATIONS ARE LOCATED IN THIS COMMONWEALTH:

* * * (C) INVESTMENTS IN BUSINESSES LOCATED IN ENTERPRISE ZONES DESIGNATED BY THE DEPARTMENT OF COMMUNITY [AFFAIRS] AND ECONOMIC DEVELOPMENT.

(D) INVESTMENTS IN HOUSING FOR FAMILIES AND PERSONS OF LOW 20260HB2464PN3617 - 9 - INCOME OR IN HOUSING IN ENTERPRISE ZONES DESIGNATED BY THE DEPARTMENT OF COMMUNITY [AFFAIRS] AND ECONOMIC DEVELOPMENT.

* * * SECTION 4.

THE DEFINITION OF "PERSONAL RISKS" IN SECTION 503-A OF THE ACT IS AMENDED TO READ:

SECTION 503-A.

DEFINITIONS.--AS USED IN THIS ARTICLE, THE FOLLOWING WORDS AND PHRASES SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION:

* * * "PERSONAL RISKS." PERSONAL AUTOMOBILE RISKS AS DEFINED [IN THE ACT OF JUNE 5, 1968 (P.L.140, NO.78), ENTITLED "AN ACT REGULATING THE WRITING, CANCELLATION OF OR REFUSAL TO RENEW POLICIES OF AUTOMOBILE INSURANCE;

AND IMPOSING POWERS AND DUTIES ON THE INSURANCE COMMISSIONER THEREFOR,"] UNDER ARTICLE XX AND PERSONAL PROPERTY RISKS DESCRIBED IN THE ACT OF JULY 22, 1974 (P.L.589, NO.205), KNOWN AS THE "UNFAIR INSURANCE PRACTICES ACT." * * * SECTION 5.

SECTIONS 631(A), 633(D)(1)(I) AND (IV), 634(A), 635.2(F)(6)(I) AND (G)(1), 635.4(A)(2)(III), 635.6(D)(1), 636 AND 639 OF THE ACT ARE AMENDED TO READ:

SECTION 631.

REIMBURSEMENT FOR CANCER THERAPY.--(A) WHENEVER ANY INDIVIDUAL OR GROUP HEALTH, SICKNESS OR ACCIDENT INSURANCE POLICY OR SUBSCRIBER CONTRACT OR CERTIFICATE ISSUED BY ANY ENTITY SUBJECT TO 40 PA.C.S.

CHS.

61 (RELATING TO HOSPITAL PLAN CORPORATIONS) AND 63 (RELATING TO PROFESSIONAL HEALTH SERVICES PLAN CORPORATIONS), THIS ACT, OR [THE ACT OF JULY 29, 1977 (P.L.105, NO.38), KNOWN AS THE "FRATERNAL BENEFIT SOCIETY CODE,"] ARTICLE XXIV PROVIDING HOSPITAL OR MEDICAL/SURGICAL COVERAGE INCLUDES WITHIN THEIR COVERAGE BENEFITS FOR CANCER 20260HB2464PN3617 - 10 - CHEMOTHERAPY AND CANCER HORMONE TREATMENTS AND SERVICES WHICH HAVE BEEN APPROVED BY THE UNITED STATES FOOD AND DRUG ADMINISTRATION FOR GENERAL USE IN TREATMENT OF CANCER, THE COVERED INDIVIDUAL SHALL BE ENTITLED TO BENEFITS FOR CANCER CHEMOTHERAPY AND CANCER HORMONE TREATMENTS, WHETHER PERFORMED IN A PHYSICIAN'S OFFICE, IN AN OUTPATIENT DEPARTMENT OF A HOSPITAL, IN A HOSPITAL AS A HOSPITAL INPATIENT OR IN ANY OTHER MEDICALLY APPROPRIATE TREATMENT SETTING.

* * * Section 633.

Mastectomy and Breast Cancer Reconstruction.--* * * (d) (1) * * * (i) Subarticle (f) of Article IV of the act of June 13, 1967 (P.L.31, No.21), known as the ["Public Welfare Code."] "Human Services Code." * * * (IV) [THE ACT OF DECEMBER 14, 1992 (P.L.835, NO.134), KNOWN <-- AS THE "FRATERNAL BENEFIT SOCIETIES CODE."] ARTICLE XXIV.

* * * SECTION 634.

REIMBURSEMENT FOR DIABETIC SUPPLIES.--(A) EXCEPT TO THE EXTENT ALREADY COVERED UNDER ANOTHER POLICY, ANY INDIVIDUAL OR GROUP HEALTH, SICKNESS AND ACCIDENT INSURANCE POLICY, GROUP HEALTH INSURANCE PLANS/POLICIES, AND ALL OTHER FORMS OF MANAGED/CAPITATED CARE PLANS/POLICIES OR SUBSCRIBER CONTRACT OR CERTIFICATE ISSUED BY ANY ENTITY SUBJECT TO 40 PA.C.S.

CH.

61 (RELATING TO HOSPITAL PLAN CORPORATIONS) OR 63 (RELATING TO PROFESSIONAL HEALTH SERVICES PLAN CORPORATIONS) OR THE ACT OF DECEMBER 29, 1972 (P.L.1701, NO.364), KNOWN AS THE "HEALTH MAINTENANCE ORGANIZATION ACT," [THE ACT OF DECEMBER 14, 1992 (P.L.835, NO.134), KNOWN AS THE "FRATERNAL BENEFIT 20260HB2464PN3617 - 11 - SOCIETIES CODE,"] ARTICLE XXIV OR THIS ACT PROVIDING HOSPITAL OR MEDICAL/SURGICAL COVERAGE SHALL PROVIDE COVERAGE OF THE EQUIPMENT, SUPPLIES AND OUTPATIENT SELF-MANAGEMENT TRAINING AND EDUCATION, INCLUDING MEDICAL NUTRITION THERAPY FOR THE TREATMENT OF INSULIN-DEPENDENT DIABETES, INSULIN-USING DIABETES, GESTATIONAL DIABETES AND NON-INSULIN-USING DIABETES IF PRESCRIBED BY A HEALTH CARE PROFESSIONAL LEGALLY AUTHORIZED TO PRESCRIBE SUCH ITEMS UNDER LAW.

THE BENEFITS SPECIFIED IN THIS SECTION MAY BE PROVIDED THROUGH A COMBINATION OF POLICIES, CONTRACTS, CERTIFICATES OR RIDERS, INCLUDING MAJOR MEDICAL CONTRACTS.

* * * Section 635.2.

(i) The Commonwealth's medical assistance program established under the act of June 13, 1967 (P.L.31, No.21), known as the ["Public Welfare Code."] "Human Services Code." * * * Section(G) 635.4.(1) THE STATE BOARD OF MEDICINE, IN CONSULTATION WITH <-- THE DEPARTMENT OF [PUBLIC WELFARE] HUMAN SERVICES, SHALL PROMULGATE REGULATIONS PROVIDING FOR THE LICENSURE OR CERTIFICATION OF BEHAVIOR SPECIALISTS.

BEHAVIOR SPECIALISTS LICENSED OR CERTIFIED BY THE STATE BOARD OF MEDICINE SHALL BE SUBJECT TO ALL DISCIPLINARY PROVISIONS APPLICABLE TO MEDICAL DOCTORS AS SET FORTH IN THE ACT OF DECEMBER 20, 1985 (P.L.457, NO.112), KNOWN AS THE "MEDICAL PRACTICE ACT OF 1985." THE STATE BOARD OF MEDICINE MAY CHARGE REASONABLE FEES AS SET BY BOARD REGULATION FOR LICENSURE OR CERTIFICATES OR APPLICATIONS 20260HB2464PN3617 - 12 - PERMITTED BY THE "MEDICAL PRACTICE ACT OF 1985." * * * Section 635.4.

* * * (iii) is or could be covered by any other insured or uninsured arrangement which provides hospital, surgical or major medical coverage for individuals in a group and under which the person was not covered immediately prior to such termination, 20260HB2464PN3299 - 2 - excluding the medical assistance program established under the act of June 13, 1967 (P.L.31, No.21), known as the ["Public Welfare Code,"] "Human Services Code," the children's health care program established under Article XXIII[XXIII] XXIII-A or the <-- adult basic coverage insurance program established under Chapter 13 of the act of June 26, 2001 (P.L.755, No.77), known as the "Tobacco Settlement Act," and any successors thereto.

Coverage of Prescriptions.--* * * 20260HB2464PN3617 - 13 - (d) As used in this section:

The definition of "hospital" in section 601-A of <-- the act is amended to read:

* * * "Hospital." A facility licensed as a hospital by the Department of Health, the Department of [Public Welfare] Human Services, or operated by the Commonwealth and conducting an alcoholism or drug addiction treatment program licensed by the 20260HB2464PN3299 - 3 - Department of Health.

SECTION 636.

EMPLOYERS' MUTUAL LIABILITY INSURANCE <-- ASSOCIATIONS DEFINED.--AN INCORPORATED ASSOCIATION OR COMPANY HERETOFORE OR HEREAFTER FORMED BY EMPLOYERS FOR THE PURPOSE OF INSURING THEMSELVES, AND SUCH OTHER EMPLOYERS AS MAY BECOME SUBSCRIBERS TO THE ASSOCIATION, AGAINST LIABILITY UNDER THE 20260HB2464PN3617 - 14 - TERMS OF ARTICLES TWO AND THREE OF "THE [WORKMEN'S] WORKERS' COMPENSATION ACT OF ONE THOUSAND NINE HUNDRED AND FIFTEEN," OR ANY AMENDMENTS OR SUPPLEMENTS OR REVISIONS THEREOF, SHALL BE KNOWN AS AN "EMPLOYERS' MUTUAL LIABILITY INSURANCE ASSOCIATION." SECTION 639.

PREMIUMS.--THE BOARD OF DIRECTORS OF ANY EMPLOYERS' MUTUAL LIABILITY INSURANCE ASSOCIATION SHALL DETERMINE THE AMOUNT OF THE PREMIUMS WHICH THE SUBSCRIBERS OF THE ASSOCIATION SHALL PAY FOR THEIR INSURANCE, IN ACCORDANCE WITH THE NATURE OF THE BUSINESS IN WHICH SUCH SUBSCRIBERS ARE ENGAGED, AND THE PROBABLE RISK OF INJURY TO THEIR EMPLOYES UNDER EXISTING CONDITIONS.

THEY SHALL FIX PREMIUMS AT SUCH AMOUNTS AS, IN THEIR JUDGMENT (SUBJECT TO THE APPROVAL OF THE INSURANCE COMMISSIONER), SHALL BE SUFFICIENT TO ENABLE THE ASSOCIATION TO CREATE AND MAINTAIN THE SURPLUS PROVIDED IN SECTION SIX HUNDRED AND FORTY-THREE (643) OF THIS ACT, AND TO PAY TO ITS SUBSCRIBERS ALL SUMS WHICH MAY BECOME DUE AND PAYABLE TO THEIR EMPLOYES UNDER THE PROVISIONS OF ARTICLE THREE OF "THE [WORKMEN'S] WORKERS' COMPENSATION ACT OF ONE THOUSAND NINE HUNDRED AND FIFTEEN," OR ANY AMENDMENT OR REVISION THEREOF, AND ALSO THE EXPENSES OF CONDUCTING THE BUSINESS OF THE ASSOCIATION.

IN FIXING THE PREMIUM PAYABLE BY ANY SUBSCRIBER, THE BOARD OF DIRECTORS MAY TAKE INTO ACCOUNT THE CONDITION OF ALL THE PROPERTY OR PREMISES OF SUCH SUBSCRIBER, IN RESPECT TO THE SAFETY OF THOSE EMPLOYED THEREIN OR THEREON, AS SHOWN BY THE REPORT OF ANY INSPECTOR APPOINTED BY SUCH BOARD.

THE BOARD OF DIRECTORS MAY, FROM TIME TO TIME, CHANGE THE AMOUNT OF PREMIUMS PAYABLE BY ANY OF THE SUBSCRIBERS AS CIRCUMSTANCES MAY REQUIRE, AND THE CONDITION OF THE PROPERTY OR PREMISES OF SUCH SUBSCRIBER IN RESPECT TO THE SAFETY OF THEIR EMPLOYES MAY JUSTIFY.

THEY MAY INCREASE THE PREMIUMS OF ANY 20260HB2464PN3617 - 15 - SUBSCRIBER NEGLECTING TO PROVIDE SAFETY DEVICES REQUIRED BY LAW, OR DISOBEYING THE RULES OR REGULATIONS MADE BY THE BOARD OF DIRECTORS IN ACCORDANCE WITH THE PROVISIONS OF SECTION SIX HUNDRED AND THIRTY-EIGHT (638) OF THIS ACT.

NO POLICY OF INSURANCE ISSUED TO ANY SUBSCRIBER SHALL BE EFFECTIVE UNTIL HE SHALL HAVE PAID THE PREMIUM SO FIXED AND DETERMINED.

SECTION 6.

THE HEADING OF SUBARTICLE (D) OF ARTICLE VI AND SECTIONS 651, 652, 653, 654(A) AND (E), 655, 666(B), 667, 601-A, 602-A(A), 603-A(A), 604-A(A), 605-A(A), 607-A, 749(B) AND 754(10) AND (11) OF THE ACT ARE AMENDED TO READ:

(D) [WORKMEN'S] WORKERS' COMPENSATION INSURANCE.

SECTION 651.

POLICY PROVISIONS.--EVERY POLICY OF INSURANCE AGAINST LIABILITY UNDER "THE [WORKMEN'S] WORKERS' COMPENSATION ACT OF NINETEEN HUNDRED AND FIFTEEN," AND ACTS AMENDATORY THEREOF OR SUPPLEMENTARY THERETO, OR UNDER "THE PENNSYLVANIA OCCUPATIONAL DISEASE ACT OF NINETEEN HUNDRED AND THIRTY-NINE," AND ACTS AMENDATORY THEREOF OR SUPPLEMENTARY THERETO, SHALL CONTAIN THE AGREEMENT OF THE INSURER TO PAY ALL COMPENSATION AND PROVIDE ALL MEDICAL, SURGICAL, AND HOSPITAL ATTENDANCE FOR WHICH THE INSURED EMPLOYER MAY BECOME LIABLE UNDER SUCH ACTS DURING THE TERM OF SUCH INSURANCE, AND THE FURTHER AGREEMENT THAT, AS BETWEEN THE INSURER AND ANY CLAIMANT UNDER SUCH ACTS, NOTICE TO THE EMPLOYER OR THE EMPLOYER'S KNOWLEDGE OF AN ACCIDENT OR INJURY OR DISABILITY CAUSED BY OCCUPATIONAL DISEASE CONSTITUTING THE BASIS OF A CLAIM UNDER SUCH ACTS SHALL BE NOTICE TO AND KNOWLEDGE OF THE INSURER.

SUCH AGREEMENTS SHALL BE CONSTRUED TO BE A DIRECT PROMISE TO THE INJURED EMPLOYE OR TO THE DEPENDENTS OF A DECEASED EMPLOYE HAVING A CLAIM UNDER SUCH ACTS, AND SHALL BE ENFORCEABLE BY ACTION BROUGHT IN THE NAME OF SUCH INJURED 20260HB2464PN3617 - 16 - EMPLOYE OR IN THE NAME OF SUCH DEPENDENTS.

SUCH OBLIGATION SHALL NOT BE AFFECTED BY ANY DEFAULT OF THE INSURED, AFTER AN ACCIDENT OR AFTER DISABILITY CAUSED BY OCCUPATIONAL DISEASE, IN THE PAYMENT OF PREMIUMS OR IN THE GIVING OF ANY NOTICES REQUIRED BY SUCH POLICY OR OTHERWISE.

SECTION 652.

SUITS FOR PREMIUMS.--NO SUIT SHALL BE MAINTAINED FOR THE COLLECTION OF PREMIUMS UPON ANY POLICY OF INSURANCE UNDER "THE [WORKMEN'S] WORKERS' COMPENSATION ACT OF NINETEEN HUNDRED AND FIFTEEN," AND ACTS AMENDATORY THEREOF OR SUPPLEMENTARY THERETO, OR UNDER "THE PENNSYLVANIA OCCUPATIONAL DISEASE ACT OF NINETEEN HUNDRED AND THIRTY-NINE," AND ACTS AMENDATORY THEREOF OR SUPPLEMENTARY THERETO, WHICH VIOLATES ANY OF THE PROVISIONS OF THIS ACT.

ALL PREMIUMS AND INTEREST CHARGES ON ACCOUNT OF POLICIES INSURING EMPLOYES AGAINST LIABILITY UNDER THIS CHAPTER, WHICH MAY BE DUE TO THE STATE [WORKMEN'S] WORKERS' INSURANCE FUND, OR ANY STOCK CORPORATION OR MUTUAL ASSOCIATION AUTHORIZED TO TRANSACT THE BUSINESS OF INSURANCE IN THIS STATE, AND ALL JUDGMENTS RECOVERED BY THE STATE [WORKMEN'S] WORKERS' INSURANCE FUND, OR ANY SUCH INSURANCE CORPORATION OR ASSOCIATION, AGAINST ANY EMPLOYER ON ACTIONS BROUGHT UNDER ANY SUCH POLICY, SHALL BE DEEMED PREFERRED CLAIMS IN ALL INSOLVENCY OR BANKRUPTCY PROCEEDINGS, TRUSTEE PROCEEDINGS FOR ADMINISTRATION OF ESTATES, AND RECEIVERSHIPS, INVOLVING THE EMPLOYER LIABLE THEREFOR, OR THE PROPERTY OF SUCH EMPLOYER;

PROVIDED, HOWEVER, THAT CLAIMS FOR WAGES SHALL RECEIVE PRIOR PREFERENCE IN ALL SUCH PROCEEDINGS.

SECTION 653.

PROHIBITED POLICY PROVISIONS.--NO POLICY OF INSURANCE AGAINST LIABILITY UNDER "THE [WORKMEN'S] WORKERS' COMPENSATION ACT OF NINETEEN HUNDRED AND FIFTEEN," AND ACTS AMENDATORY THEREOF OR SUPPLEMENTARY THERETO, OR UNDER "THE 20260HB2464PN3617 - 17 - PENNSYLVANIA OCCUPATIONAL DISEASE ACT OF NINETEEN HUNDRED AND THIRTY-NINE," AND ACTS AMENDATORY THEREOF OR SUPPLEMENTARY THERETO, SHALL CONTAIN ANY LIMITATION OF THE LIABILITY OF THE INSURER TO AN AMOUNT LESS THAN THAT FOR WHICH THE INSURED EMPLOYER MAY BECOME LIABLE UNDER SUCH ACTS DURING THE TERM OF SUCH INSURANCE.

NO SUCH POLICY OR CONTRACT OF INSURANCE, NOR ANY AGREEMENT TO DELIVER SUCH INSURANCE, SHALL BE ISSUED EXCEPT UPON A FORM APPROVED BY THE INSURANCE COMMISSIONER AS COMPLYING WITH ALL THE TERMS AND PROVISIONS OF THIS ACT.

BUT A POLICY MAY BE ISSUED TO A SELF INSURER, QUALIFIED UNDER SECTION THREE HUNDRED FIVE OF ARTICLE THREE OF "THE [WORKMEN'S] WORKERS' COMPENSATION ACT OF NINETEEN HUNDRED AND FIFTEEN," AND ACTS AMENDATORY THEREOF OR SUPPLEMENTARY THERETO, OR UNDER SECTION THREE HUNDRED FIVE OF ARTICLE THREE OF "THE PENNSYLVANIA OCCUPATIONAL DISEASE ACT OF NINETEEN HUNDRED AND THIRTY-NINE," AND ACTS AMENDATORY THEREOF OR SUPPLEMENTARY THERETO, PROVIDING FOR THE PAYMENT OF ANY STATED LOSS IN EXCESS OF TEN THOUSAND DOLLARS FALLING UPON SUCH SELF INSURER, UNDER THE TERMS OF THE SAID ACTS, BY REASON OF ANY SINGLE ACCIDENT OR BY REASON OF ANY SINGLE OCCURRENCE RESULTING IN DISABILITY FROM OCCUPATIONAL DISEASE.

EXCEPT FOR NONPAYMENT OF PREMIUMS, NO POLICY OF INSURANCE ISSUED OR RENEWED AGAINST LIABILITY UNDER THE ACT OF JUNE 2, 1915 (P.L.736, NO.338), KNOWN AS "THE PENNSYLVANIA [WORKMEN'S] WORKERS' COMPENSATION ACT," AND ACTS AMENDATORY THEREOF OR SUPPLEMENTARY THERETO;

OR UNDER THE ACT OF JUNE 21, 1939 (P.L.566, NO.284), KNOWN AS "THE PENNSYLVANIA OCCUPATIONAL DISEASE ACT," AND ACTS AMENDATORY THEREOF OR SUPPLEMENTARY THERETO;

OR UNDER THE FEDERAL COAL MINE HEALTH AND SAFETY ACT OF 1969, AS AMENDED, PUB.L.91-173, DECEMBER 30, 1969, 83 STAT.

742 ET SEQ.;

OR INSURING AN EMPLOYER AGAINST LIABILITY FOR ALL SUMS 20260HB2464PN3617 - 18 - SUCH EMPLOYER SHALL BECOME LEGALLY OBLIGATED TO PAY ANY EMPLOYE OF HIS AS DAMAGES BECAUSE OF BODILY INJURY BY ACCIDENT OR DISEASE, INCLUDING DEATH AT ANY TIME RESULTING THEREFROM, SUSTAINED BY SUCH EMPLOYE ARISING OUT OF AND IN THE COURSE OF HIS EMPLOYMENT, MAY BE CANCELLED OR TERMINATED BY AN INSURER DURING THE TERM OF THE POLICY.

SECTION 654.

CLASSIFICATION OF RISKS;

UNDERWRITING RULES;

PREMIUM RATES;

SCHEDULE AND MERIT RATING PLANS.--(A) THE CLASSIFICATION OF RISKS, UNDERWRITING RULES, PREMIUM RATES, AND SCHEDULE OR MERIT RATING PLANS FOR INSURANCE OF EMPLOYERS AND EMPLOYES UNDER "THE [WORKMEN'S] WORKERS' COMPENSATION ACT OF NINETEEN HUNDRED AND FIFTEEN," AND ACTS AMENDATORY THEREOF OR SUPPLEMENTARY THERETO, AND FOR INSURANCE UNDER "THE PENNSYLVANIA OCCUPATIONAL DISEASE ACT OF NINETEEN HUNDRED AND THIRTY-NINE," AND ACTS AMENDATORY THEREOF OR SUPPLEMENTARY THERETO, AND FOR INSURANCE WITH RESPECT TO THE COMMONWEALTH OF PENNSYLVANIA AS TO LIABILITY UNDER "THE UNITED STATES LONGSHOREMEN'S AND HARBOR [WORKERS'] WORKERS' COMPENSATION ACT" OF ONE THOUSAND NINE HUNDRED TWENTY-SEVEN, AND ACTS AMENDATORY THEREOF OR SUPPLEMENTARY THERETO, WRITTEN AS A PART OF A WORKMEN'S COMPENSATION AND EMPLOYERS' LIABILITY POLICY, SHALL BE PROPOSED ANNUALLY BY ONE OR MORE RATING BUREAUS, SAID RATING BUREAU OR BUREAUS TO BE SITUATE WITHIN THE COMMONWEALTH OF PENNSYLVANIA, SUBJECT TO SUPERVISION AND TO EXAMINATION BY THE INSURANCE COMMISSIONER AND APPROVED BY THE INSURANCE COMMISSIONER AS ADEQUATELY EQUIPPED TO COMPILE RATES ON AN EQUITABLE AND IMPARTIAL BASIS.

SUCH SCHEDULE OR MERIT RATING PLANS SHALL BE APPLIED ONLY BY THE APPROVED RATING BUREAU OR BUREAUS, AND, IN THE PREPARATION OF SCHEDULES, NO EMPLOYER SHALL BE DISCRIMINATED AGAINST OR PENALIZED BECAUSE OF PHYSICAL IMPAIRMENT OF ANY 20260HB2464PN3617 - 19 - EMPLOYE OR BECAUSE OF THE NUMBER OF DEPENDENTS OF ANY EMPLOYE.

* * * (E) NEITHER THE STATE [WORKMEN'S] WORKERS' INSURANCE FUND, NOR ANY INSURANCE CORPORATION, MUTUAL ASSOCIATION, OR COMPANY, SHALL ISSUE, RENEW, OR CARRY ANY POLICY OR CONTRACT OF INSURANCE AGAINST SUCH LIABILITY UNDER SUCH ACTS, EXCEPT IN ACCORDANCE WITH THE CLASSIFICATIONS, UNDERWRITING RULES, PREMIUM RATES, AND SCHEDULE OR MERIT RATING PLANS, PROPOSED BY THE RATING BUREAU OR BUREAUS AFORESAID FOR THE RISK INSURED AND AS MODIFIED, AMENDED OR APPROVED BY THE INSURANCE COMMISSIONER FOR SUCH INSURER.

* * * SECTION 655.

ANNUAL REPORT OF PREMIUMS AND LOSS EXPERIENCE;

PENALTIES.--THE STATE [WORKMEN'S] WORKERS' INSURANCE FUND, AND EVERY INSURANCE COMPANY AND EVERY EMPLOYER'S MUTUAL LIABILITY ASSOCIATION WHICH INSURES EMPLOYERS AND EMPLOYES UNDER "THE [WORKMEN'S] WORKERS' COMPENSATION ACT OF ONE THOUSAND NINE HUNDRED AND FIFTEEN," AND ACTS AMENDATORY THEREOF OR SUPPLEMENTARY THERETO, OR UNDER "THE PENNSYLVANIA OCCUPATIONAL DISEASE ACT OF NINETEEN HUNDRED AND THIRTY-NINE," AND ACTS AMENDATORY THEREOF OR SUPPLEMENTARY THERETO, OR WITH RESPECT TO PENNSYLVANIA UNDER THE "UNITED STATES LONGSHOREMEN'S AND HARBOR WORKERS' COMPENSATION ACT" OF ONE THOUSAND NINE HUNDRED TWENTY- SEVEN, AND ACTS AMENDATORY THEREOF OR SUPPLEMENTARY THERETO, WHEN SUCH LIABILITY IS INSURED AS A PART OF A WORKMEN'S COMPENSATION AND EMPLOYERS' LIABILITY POLICY, SHALL ANNUALLY, ON OR BEFORE THE THIRTIETH DAY OF JUNE, FILE WITH THE INSURANCE COMMISSIONER A SWORN REPORT OF ITS PREMIUM AND LOSS EXPERIENCE, IN SUCH DETAIL AND FORM AS MAY BE PRESCRIBED BY THE INSURANCE COMMISSIONER.

ANY INSURANCE CARRIER WHICH NEGLECTS TO MAKE AND FILE SUCH STATEMENT IN THE FORM OR WITHIN THE TIME HEREIN 20260HB2464PN3617 - 20 - PROVIDED SHALL FORFEIT ONE HUNDRED DOLLARS FOR EACH DAY DURING WHICH SUCH NEGLECT CONTINUES, AND, UPON NOTICE BY THE INSURANCE COMMISSIONER, ITS AUTHORITY TO DO BUSINESS SHALL CEASE WHILE SUCH DEFAULT CONTINUES.

THE INSURANCE COMMISSIONER SHALL HAVE THE POWER TO SUSPEND OR REVOKE THE LICENSE OF ANY INSURANCE COMPANY WHICH VIOLATES ANY OF THE PROVISIONS OF SUBDIVISION (D) OF THIS ARTICLE.

SECTION 666.

GUARANTEED ARREST BOND CERTIFICATES ISSUED BY AUTOMOBILE CLUBS OR ASSOCIATIONS.--* * * (B) THE TERM "GUARANTEED ARREST BOND CERTIFICATE," AS USED HEREIN, MEANS ANY PRINTED CARD OR OTHER CERTIFICATE ISSUED BY AN AUTOMOBILE CLUB, ASSOCIATION OR INSURANCE COMPANY TO ANY OF ITS MEMBERS OR INSUREDS, WHICH CARD OR CERTIFICATE IS SIGNED BY THE MEMBER OR INSURED AND CONTAINS A PRINTED STATEMENT THAT THE AUTOMOBILE CLUB, ASSOCIATION OR INSURANCE COMPANY AND A SURETY COMPANY OR AN INSURANCE COMPANY AUTHORIZED TO TRANSACT BOTH AUTOMOBILE LIABILITY INSURANCE AND SURETY BUSINESS, GUARANTEE THE APPEARANCE OF THE PERSON WHOSE SIGNATURE APPEARS ON THE CARD OR CERTIFICATE AND THAT THEY WILL, IN THE EVENT OF FAILURE OF THE PERSON TO APPEAR IN ANY COURT OR BEFORE ANY [MAGISTRATE, ALDERMAN OR JUSTICE OF THE PEACE] MAGISTERIAL DISTRICT JUDGE IN THIS STATE, PAY ANY FINE OR FORFEITURE IMPOSED ON THE PERSON IN AN AMOUNT NOT EXCEEDING TWO HUNDRED DOLLARS ($200), WHEN THE PERSON IS ARRESTED OR FORMALLY CHARGED FOR VIOLATION OF ANY MOTOR VEHICLE OR TRAFFIC LAW OF THIS STATE OR ORDINANCE OF ANY LOCAL AUTHORITY OF THIS STATE PERTAINING THERETO EXCEPT AS HEREINAFTER SET FORTH.

SECTION 667.

USE OF GUARANTEED ARREST BOND CERTIFICATES.-- ANY GUARANTEED ARREST BOND CERTIFICATE WITH RESPECT TO WHICH A SURETY COMPANY HAS BECOME SURETY OR A GUARANTEED ARREST BOND 20260HB2464PN3617 - 21 - CERTIFICATE ISSUED BY AN INSURANCE COMPANY AUTHORIZED TO TRANSACT BOTH AUTOMOBILE LIABILITY INSURANCE AND SURETY BUSINESS WITHIN THIS STATE, SHALL, WHEN POSTED BY THE PERSON WHOSE SIGNATURE APPEARS THEREON, BE ACCEPTED IN LIEU OF CASH BAIL IN AN AMOUNT NOT EXCEEDING TWO HUNDRED DOLLARS ($200) AS A BAIL BOND TO GUARANTEE THE APPEARANCE OF THE PERSON IN ANY COURT OR BEFORE ANY [MAGISTRATE, ALDERMAN OR JUSTICE OF THE PEACE] MAGISTERIAL DISTRICT JUDGE IN THIS STATE AT SUCH TIME AS MAY BE REQUIRED BY THE COURT OR [MAGISTRATE, ALDERMAN OR JUSTICE OF THE PEACE] MAGISTERIAL DISTRICT JUDGE WHEN THE PERSON IS ARRESTED OR FORMALLY CHARGED FOR VIOLATION OF ANY MOTOR VEHICLE OR TRAFFIC LAW OF THIS STATE OR ORDINANCE OF ANY LOCAL AUTHORITY PERTAINING THERETO IN THIS STATE, EXCEPT FOR THE OFFENSES WHICH ARE MISDEMEANORS OR FELONIES AS DEFINED IN "THE VEHICLE CODE." ANY GUARANTEED ARREST BOND CERTIFICATE POSTED AS BAIL BOND IN ANY COURT IN THIS STATE SHALL BE SUBJECT TO THE FORFEITURE AND ENFORCEMENT PROVISIONS OF LAW APPLICABLE TO A BAIL BOND.

SECTION 601-A.

DEFINITIONS.--AS USED IN THIS ARTICLE THE FOLLOWING WORDS AND PHRASES SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION:

"ALCOHOL OR DRUG ABUSE." ANY USE OF ALCOHOL OR OTHER DRUGS WHICH PRODUCES A PATTERN OF PATHOLOGICAL USE CAUSING IMPAIRMENT IN SOCIAL OR OCCUPATIONAL FUNCTIONING OR WHICH PRODUCES PHYSIOLOGICAL DEPENDENCY EVIDENCED BY PHYSICAL TOLERANCE OR WITHDRAWAL.

FOR THE PURPOSES OF THIS ACT, "DRUGS" SHALL BE DEFINED AS ADDICTIVE DRUGS AND DRUGS OF ABUSE LISTED AS SCHEDULED DRUGS IN THE ACT OF APRIL 14, 1972 (P.L.233, NO.64), KNOWN AS "THE CONTROLLED SUBSTANCE, DRUG, DEVICE AND COSMETIC ACT." "DETOXIFICATION." THE PROCESS WHEREBY AN ALCOHOL-INTOXICATED 20260HB2464PN3617 - 22 - OR DRUG-INTOXICATED OR ALCOHOL-DEPENDENT OR DRUG-DEPENDENT PERSON IS ASSISTED, IN A FACILITY LICENSED BY THE DEPARTMENT OF [HEALTH] DRUG AND ALCOHOL PROGRAMS, THROUGH THE PERIOD OF TIME NECESSARY TO ELIMINATE, BY METABOLIC OR OTHER MEANS, THE INTOXICATING ALCOHOL OR OTHER DRUGS, ALCOHOL AND OTHER DRUG DEPENDENCY FACTORS OR ALCOHOL IN COMBINATION WITH DRUGS AS DETERMINED BY A LICENSED PHYSICIAN, WHILE KEEPING THE PHYSIOLOGICAL RISK TO THE PATIENT AT A MINIMUM.

"HOSPITAL." A FACILITY LICENSED AS A HOSPITAL BY THE DEPARTMENT OF HEALTH, THE DEPARTMENT OF [PUBLIC WELFARE] HUMAN SERVICES, OR OPERATED BY THE COMMONWEALTH AND CONDUCTING AN ALCOHOLISM OR DRUG ADDICTION TREATMENT PROGRAM LICENSED BY THE DEPARTMENT OF [HEALTH] DRUG AND ALCOHOL PROGRAMS.

"INPATIENT CARE." THE PROVISION OF MEDICAL, NURSING, COUNSELING OR THERAPEUTIC SERVICES TWENTY-FOUR HOURS A DAY IN A HOSPITAL OR NON-HOSPITAL FACILITY, ACCORDING TO INDIVIDUALIZED TREATMENT PLANS.

"NON-HOSPITAL FACILITY." A FACILITY, LICENSED BY THE DEPARTMENT OF [HEALTH] DRUG AND ALCOHOL PROGRAMS, FOR THE CARE OR TREATMENT OF ALCOHOL-DEPENDENT OR OTHER DRUG-DEPENDENT PERSONS, EXCEPT FOR TRANSITIONAL LIVING FACILITIES.

"NON-HOSPITAL RESIDENTIAL CARE." THE PROVISION OF MEDICAL, NURSING, COUNSELING OR THERAPEUTIC SERVICES TO PATIENTS SUFFERING FROM ALCOHOL OR OTHER DRUG ABUSE OR DEPENDENCY IN A RESIDENTIAL ENVIRONMENT, ACCORDING TO INDIVIDUALIZED TREATMENT PLANS.

"OUTPATIENT CARE." THE PROVISION OF MEDICAL, NURSING, COUNSELING OR THERAPEUTIC SERVICES IN A HOSPITAL OR NON-HOSPITAL FACILITY ON A REGULAR AND PREDETERMINED SCHEDULE, ACCORDING TO INDIVIDUALIZED TREATMENT PLANS.

20260HB2464PN3617 - 23 - "PARTIAL HOSPITALIZATION." THE PROVISION OF MEDICAL, NURSING, COUNSELING OR THERAPEUTIC SERVICES ON A PLANNED AND REGULARLY SCHEDULED BASIS IN A HOSPITAL OR NON-HOSPITAL FACILITY LICENSED AS AN ALCOHOLISM OR DRUG ADDICTION TREATMENT PROGRAM BY THE DEPARTMENT OF [HEALTH] DRUG AND ALCOHOL PROGRAMS, DESIGNED FOR A PATIENT OR CLIENT WHO WOULD BENEFIT FROM MORE INTENSIVE THAN ARE OFFERED IN OUTPATIENT TREATMENT BUT WHO DOES NOT REQUIRE INPATIENT CARE.

SECTION 602-A.

MANDATED POLICY COVERAGES AND OPTIONS.--(A) ALL GROUP HEALTH OR SICKNESS OR ACCIDENT INSURANCE POLICIES PROVIDING HOSPITAL OR MEDICAL/SURGICAL COVERAGE AND ALL GROUP SUBSCRIBER CONTRACTS OR CERTIFICATES ISSUED BY ANY ENTITY SUBJECT TO THIS ACT, 40 PA.C.S.

CH.

61 (RELATING TO HOSPITAL PLAN CORPORATIONS) OR CH.

63 (RELATING TO PROFESSIONAL HEALTH SERVICES PLAN CORPORATIONS), THE ACT OF DECEMBER 29, 1972 (P.L.1701, NO.364), KNOWN AS THE "HEALTH MAINTENANCE ORGANIZATION ACT," OR [THE ACT OF JULY 29, 1977 (P.L.105, NO.38), KNOWN AS THE "FRATERNAL BENEFIT SOCIETY CODE,"] ARTICLE XXIV PROVIDING HOSPITAL OR MEDICAL/SURGICAL COVERAGE, SHALL IN ADDITION TO OTHER PROVISIONS REQUIRED BY THIS ACT INCLUDE WITHIN THE COVERAGE THOSE BENEFITS FOR ALCOHOL OR OTHER DRUG ABUSE AND DEPENDENCY AS PROVIDED IN SECTIONS 603-A, 604-A AND 605-A.

* * * SECTION 603-A.

INPATIENT DETOXIFICATION.--(A) INPATIENT DETOXIFICATION AS A COVERED BENEFIT UNDER THIS ARTICLE SHALL BE PROVIDED EITHER IN A HOSPITAL OR IN AN INPATIENT NON-HOSPITAL FACILITY WHICH HAS A WRITTEN AFFILIATION AGREEMENT WITH A HOSPITAL FOR EMERGENCY, MEDICAL AND PSYCHIATRIC OR PSYCHOLOGICAL SUPPORT SERVICES, MEETS MINIMUM STANDARDS FOR CLIENT-TO-STAFF RATIOS AND STAFF QUALIFICATIONS WHICH SHALL BE ESTABLISHED BY 20260HB2464PN3617 - 24 - THE DEPARTMENT OF [HEALTH] DRUG AND ALCOHOL PROGRAMS AND IS LICENSED AS AN ALCOHOLISM AND/OR DRUG ADDICTION TREATMENT PROGRAM.

* * * SECTION 604-A.

NON-HOSPITAL RESIDENTIAL ALCOHOL OR OTHER DRUG SERVICES.--(A) MINIMAL ADDITIONAL TREATMENT AS A COVERED BENEFIT UNDER THIS ARTICLE SHALL BE PROVIDED IN A FACILITY WHICH MEETS MINIMUM STANDARDS FOR CLIENT-TO-STAFF RATIOS AND STAFF QUALIFICATIONS WHICH SHALL BE ESTABLISHED BY THE [OFFICE] DEPARTMENT OF DRUG AND ALCOHOL PROGRAMS AND IS APPROPRIATELY LICENSED BY THE DEPARTMENT OF [HEALTH] DRUG AND ALCOHOL PROGRAMS AS AN ALCOHOLISM OR DRUG ADDICTION TREATMENT PROGRAM.

BEFORE AN INSURED MAY QUALIFY TO RECEIVE BENEFITS UNDER THIS SECTION, A LICENSED PHYSICIAN OR LICENSED PSYCHOLOGIST MUST CERTIFY THE INSURED AS A PERSON SUFFERING FROM ALCOHOL OR OTHER DRUG ABUSE OR DEPENDENCY AND REFER THE INSURED FOR THE APPROPRIATE TREATMENT.

* * * SECTION 605-A.

OUTPATIENT ALCOHOL OR OTHER DRUG SERVICES.-- (A) MINIMAL ADDITIONAL TREATMENT AS A COVERED BENEFIT UNDER THIS ARTICLE SHALL BE PROVIDED IN A FACILITY APPROPRIATELY LICENSED BY THE DEPARTMENT OF [HEALTH] DRUG AND ALCOHOL PROGRAMS AS AN ALCOHOLISM OR DRUG ADDICTION TREATMENT PROGRAM.

BEFORE AN INSURED MAY QUALIFY TO RECEIVE BENEFITS UNDER THIS SECTION, A LICENSED PHYSICIAN OR LICENSED PSYCHOLOGIST MUST CERTIFY THE INSURED AS A PERSON SUFFERING FROM ALCOHOL OR OTHER DRUG ABUSE OR DEPENDENCY AND REFER THE INSURED FOR THE APPROPRIATE TREATMENT.

* * * SECTION 607-A.

RULES AND REGULATIONS.--THE INSURANCE 20260HB2464PN3617 - 25 - COMMISSIONER AND THE SECRETARY OF [HEALTH] DRUG AND ALCOHOL PROGRAMS SHALL JOINTLY PROMULGATE THOSE RULES AND REGULATIONS AS ARE DEEMED NECESSARY FOR THE EFFECTIVE IMPLEMENTATION AND OPERATION OF THIS ARTICLE.

SECTION 749.

HEARING PROCEDURE AND JUDICIAL REVIEW.--* * * (B) ALL HEARINGS PROVIDED FOR IN THIS ARTICLE SHALL BE CONDUCTED, AND THE DECISION OF THE COMMISSIONER ON THE ISSUE OR FILING INVOLVED SHALL BE RENDERED, IN ACCORDANCE WITH THE PROVISIONS OF [THE ACT OF JUNE 4, 1945 (P.L.1388), KNOWN AS THE "ADMINISTRATIVE AGENCY LAW" RELATING TO ADJUDICATION PROCEDURE.] 2 PA.C.S.

CHS.

5 SUBCH.

A (RELATING TO PRACTICE AND PROCEDURE OF COMMONWEALTH AGENCIES) AND 7 SUBCH.

A (RELATING TO JUDICIAL REVIEW OF COMMONWEALTH AGENCY ACTION).

SECTION 754.

OTHER SECTIONS APPLICABLE.--IN ADDITION TO THE PROVISIONS OF THIS ARTICLE, ONLY THE FOLLOWING PROVISIONS OF THE LAWS GOVERNING INSURANCE COMPANIES AS PRESENTLY ENACTED AND HEREINAFTER AMENDED, EXCEPT AS THEY ARE INCONSISTENT WITH THE PROVISIONS OF THIS ARTICLE, SHALL APPLY TO THE BUSINESS OF TITLE INSURANCE AND TO TITLE INSURANCE COMPANIES, WHICH SHALL BE CONSIDERED AS WITHIN THE CLASS OF INSURANCE COMPANIES REGULATED BY SUCH PROVISIONS SOLELY FOR THE LIMITED PURPOSE OF BEING SUBJECT TO SUCH PROVISIONS:

* * * (10) [SECTIONS 1 TO 12 OF THE ACT OF JUNE 5, 1947 (P.L.445), KNOWN AS "THE INSURANCE UNFAIR PRACTICES ACT."] THE ACT OF JULY 22, 1974 (P.L.589, NO.205), KNOWN AS THE "UNFAIR INSURANCE PRACTICES ACT." (11) [SECTIONS 1 TO 10 OF THE ACT OF FEBRUARY 21, 1961 (P.L.33), ENTITLED "AN ACT IMPOSING A STATE TAX ON GROSS PREMIUMS, PREMIUM DEPOSITS, AND ASSESSMENTS RECEIVED FROM 20260HB2464PN3617 - 26 - BUSINESS TRANSACTED WITHIN THIS COMMONWEALTH BY CERTAIN INSURANCE COMPANIES, ASSOCIATIONS, AND EXCHANGES;

REQUIRING THE FILING OF ANNUAL AND TENTATIVE REPORTS AND THE COMPUTATION AND PAYMENT OF TAX;

PROVIDING FOR THE RIGHTS, POWERS AND DUTIES OF THE DEPARTMENT OF REVENUE, THE TAXPAYERS AND OFFICERS THEREOF;

AND PROVIDING PENALTIES."] ARTICLE IX OF THE ACT OF MARCH 4, 1971 (P.L.6, NO.2), KNOWN AS THE "TAX REFORM CODE OF 1971." SECTION 7.

THE DEFINITION OF "FRATERNAL BENEFIT SOCIETY" IN SECTION 1002-A OF THE ACT IS AMENDED TO READ:

SECTION 1002-A.

DEFINITIONS.--(A) AS USED IN THIS ARTICLE, THE FOLLOWING WORDS AND PHRASES SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION UNLESS THE CONTEXT CLEARLY INDICATES OTHERWISE:

* * * "FRATERNAL BENEFIT SOCIETY." AN ENTITY HOLDING A CURRENT CERTIFICATE OF AUTHORITY IN THIS COMMONWEALTH UNDER [THE ACT OF DECEMBER 14, 1992 (P.L.835, NO.134), KNOWN AS THE "FRATERNAL BENEFIT SOCIETIES CODE."] ARTICLE XXIV.

* * * SECTION 8.

SECTION 1110.1(A) AND (B) OF THE ACT ARE AMENDED TO READ:

The purpose of this program is to reduce future Medicaid costs for long-term care by delaying or eliminating dependence on Medicaid by providing incentives for individuals to ensure against the potentially substantial costs that arise upon the need for long- 20260HB2464PN3617 - 27 - term care.

The definition of "public health care coverage" <-- in section 1201 of the act is amended to read:

SECTION 9.

THE DEFINITIONS OF "INSURER" AND "PUBLIC HEALTH <-- CARE COVERAGE" IN SECTION 1201 OF THE ACT ARE AMENDED TO READ:

Definitions.--As used in this article, the following words and phrases shall have the meanings given to 20260HB2464PN3299 - 4 - them in this section:

* * * "Public"INSURER." healthAN careENTITY coverage."SUBJECT TheTO StateANY programOF ofTHE medicalFOLLOWING: assistance established under the act of June 13, 1967 (P.L.31, No.21), known as the ["Public Welfare Code."] "Human Services Code." * * * Section 5.

Sections<-- 1202(a)(1) and40 (b)PA.C.S. and 1205 of the act are amended to read:

CH.

61 (RELATING TO HOSPITAL PLAN CORPORATIONS) OR 63 (RELATING TO PROFESSIONAL HEALTH SERVICES PLAN CORPORATIONS).

(2) THIS ACT, INCLUDING ANY PREFERRED PROVIDER ORGANIZATION SUBJECT TO SECTION 630.

(3) THE ACT OF DECEMBER 29, 1972 (P.L.1701, NO.364), KNOWN AS THE "HEALTH MAINTENANCE ORGANIZATION ACT." (4) [THE ACT OF JULY 29, 1977 (P.L.105, NO.38), KNOWN AS 20260HB2464PN3617 - 28 - THE "FRATERNAL BENEFIT SOCIETY CODE."] ARTICLE XXIV.

"Public health care coverage." The State program of medical assistance established under the act of June 13, 1967 (P.L.31, No.21), known as the ["Public Welfare Code."] "Human Services Code." * * * Section 5.

Sections 1202(a) and (b) and 1205 of the act are <-- amended to read:

SECTION 10.

SECTIONS 1202(A) AND (B), 1205, 1506(C) AND <-- 2007.1(E) OF THE ACT ARE AMENDED TO READ:

20260HB2464PN3617 - 29 - (b) The feasibility study and subsequent development of the 20260HB2464PN3299 - 5 - uniform claim form shall be complete within one hundred eighty (180) days of the effective date of this article.

SectionSECTION 6.1506.

TheGUARANTY definitionFUNDS ofAND "medicalCOMPULSORY assistance"ASSOCIATIONS.--* in<-- section* 2301-A* of(C) theWHEN actA isPURCHASING amendedGROUP toOBTAINS read:INSURANCE COVERING ITS MEMBERS' RISKS FROM AN ADMITTED INSURER, ONLY COVERED CLAIMS AS DEFINED IN [THE ACT OF NOVEMBER 25, 1970 (P.L.716, NO.232), KNOWN AS "THE PENNSYLVANIA INSURANCE GUARANTY ASSOCIATION ACT,"] SECTION 1802 SHALL BE COVERED BY THE STATE GUARANTY FUND.

* * * SECTION 2007.1.

COVERAGE OBLIGATIONS OF LOANER VEHICLES.--* * * 20260HB2464PN3617 - 30 - (E) AS USED IN THIS SECTION, THE TERM "MOTOR VEHICLE DEALER" SHALL HAVE THE SAME MEANING AS "DEALER" AS DEFINED IN SECTION [2] 102 OF THE ACT OF DECEMBER 22, 1983 (P.L.306, NO.84), KNOWN AS THE "BOARD OF VEHICLES ACT." Section 6 11.

The definition of "medical assistance" in <-- section 2301-A of the act is amended to read:

* * * 20260HB2464PN3299 - 6 - Section 7.7 12.

Sections 2302-A(d)(5) and (e)(2) and 2304-A(a)(3)2304-A(a) (iv)<-- (3)(iv) of the act are amended to read:

20260HB2464PN3617 - 31 - (e) Income exceeding limits.--The following apply:

* * * 20260HB2464PN3299 - 7 - (iv) In determining the amount of the contract which may be used for the purposes specified in subparagraphs (ii) and (iii), any Federal and State taxes that would be deducted from premium revenue in determining an issuer's medical loss ratio under 45 CFR 158.221 (relating to formula for calculating an issuer's medical loss ratio), including a managed care organization assessment imposed on a contractor under the act of June 13, 1967 (P.L.31, No.21), known as the [Public Welfare] Human Services Code, shall be excluded.

* * * Section 8.8 13.

20260HB2464PN3299<-- 20260HB2464PN3617 - 832 -