SB 877 — An Act amending the act of May 17, 1921 (P.L.789, No.285), known as The Insurance Department Act of 1921, in insurance producers, further providing for rebates prohibited and for inducements prohibited.

HOUSE AMENDED PRIOR PRINTER'S NO.

1135 PRINTER'STHE NO.GENERAL ASSEMBLY OF PENNSYLVANIA SENATE BILL Session of No.

1458877 THE2017 GENERALINTRODUCED ASSEMBLYBY OFWHITE PENNSYLVANIAAND SENATEWARD, BILLSEPTEMBER Session6, 2017 REFERRED TO BANKING AND INSURANCE, SEPTEMBER 6, 2017 AN ACT Amending the act of No.May 17, 1921 (P.L.789, No.285), entitled "An act relating to insurance;

877 2017 INTRODUCED BY WHITE AND WARD, SEPTEMBER 6, 2017 AS REPORTED FROM COMMITTEE ON INSURANCE, HOUSE OF REPRESENTATIVES, AS AMENDED, FEBRUARY 5, 2018 AN ACT Amending the act of May 17, 1921 (P.L.789, No.285), entitled "An act relating to insurance;

and amending, revising, and consolidating the law examination,relating suspension,to andthe dissolutionlicensing, ofqualification, insuranceregulation, companies,examination, Lloydssuspension, associations,and reciprocaldissolution andof inter-insurance insurance exchanges, and certain societies and orders, the examination and regulation of fire insurance rating bureaus, and the licensing and regulation of insurance agents and brokers;

(a) Prohibition.--[No]Prohibition.--No EXCEPT AS OTHERWISE PROVIDED IN THIS <-- SECTION, NO insurance producer shall, directly or indirectly, offer, promise, allow, give, set off or pay a rebate of, or part of, a premium payable on the contract of insurance or on the insurance producer's commission, earnings, profits, dividends or other benefit founded, arising, accruing or to accrue thereon, or any special advantage in date of policy or age of issue, or any paid employment or contract for services of any kind, or any other valuable consideration or inducement, to or for insurance on a risk in this Commonwealth which is not specified in the contract of insurance.

(a.1) Construction.--Nothing in this section shall be <-- construed as prohibiting an insurance producer from offering or giving to an insured or prospective insured money or any favor, advantage, object, valuable consideration or anything other than money which has a cost of or a redeemable value less than or equal to $100 which is not specified in the contract of insurance.

(A.1) EXCEPTION.--AN INSURANCE PRODUCER MAY OFFER OR GIVE TO <-- AN INSURED OR A PROSPECTIVE INSURED, ON AN ANNUAL AGGREGATE BASIS, ANY FAVOR, ADVANTAGE, OBJECT, VALUABLE CONSIDERATION OR ANYTHING OTHER THAN MONEY THAT HAS A COST OF OR A REDEEMABLE VALUE OF LESS THAN OR EQUAL TO $100, WHICH IS NOT SPECIFIED IN THE CONTRACT OF INSURANCE.

THE COMMISSIONER MAY INCREASE THIS AMOUNT UPON PUBLICATION OF NOTICE IN THE PENNSYLVANIA BULLETIN.

(A.2) RECEIPT CONTINGENT ON PURCHASE.--NOTWITHSTANDING ANY OTHER PROVISION OF THIS SECTION TO THE CONTRARY, AN INSURANCE PRODUCER MAY NOT MAKE RECEIPT OF ANYTHING OF VALUE CONTINGENT ON THE PURCHASE OF INSURANCE.

(C) CONSTRUCTION.--NOTHING IN THIS SECTION SHALL BE <-- 20170SB0877PN1458 - 2 - CONSTRUED AS:

(1) PERMITTING ANY UNFAIR METHOD OF COMPETITION OR AN UNFAIR OR DECEPTIVE ACT OR PRACTICE UNDER THE ACT OF JULY 22, 1974 (P.L.589, NO.205), KNOWN AS THE UNFAIR INSURANCE PRACTICES ACT;

OR (2) PROHIBITING AN INSURANCE PRODUCER FROM OFFERING OR GIVING TO AN INSURED, FOR FREE OR AT A DISCOUNTED PRICE, SERVICES OR OTHER OFFERINGS THAT RELATE TO LOSS CONTROL OF THE RISKS COVERED UNDER THE POLICY.

(a) Prohibition.--[No]Prohibition.--No EXCEPT AS OTHERWISE PROVIDED IN THIS <-- SECTION, NO insurance producer shall, directly or indirectly, offer, promise, give, option, sell or purchase any stocks, bonds, securities or property, or any dividends or profits accruing or to accrue thereon, or other thing of value whatsoever, as an inducement to purchase a contract of insurance.

(a.1) Construction.--Nothing in this section shall be <-- construed as prohibiting an insurance producer from offering or giving to an insured or prospective insured money or any favor, advantage, object, valuable consideration or anything other than 20170SB0877PN1135 - 2 - money which has a cost of or a redeemable value less than or equal to $100.

(A.1) EXCEPTION.--AN INSURANCE PRODUCER MAY OFFER OR GIVE TO <-- AN INSURED OR A PROSPECTIVE INSURED, ON AN ANNUAL AGGREGATE BASIS, ANY FAVOR, ADVANTAGE, OBJECT, VALUABLE CONSIDERATION OR 20170SB0877PN1458 - 3 - ANYTHING OTHER THAN MONEY THAT HAS A COST OF OR A REDEEMABLE VALUE OF LESS THAN OR EQUAL TO $100.

THE COMMISSIONER MAY INCREASE THIS AMOUNT UPON PUBLICATION OF NOTICE IN THE PENNSYLVANIA BULLETIN.

(A.2) RECEIPT CONTINGENT ON PURCHASE.--NOTWITHSTANDING ANY OTHER PROVISION OF THIS SECTION TO THE CONTRARY, AN INSURANCE PRODUCER MAY NOT MAKE RECEIPT OF ANYTHING OF VALUE CONTINGENT ON THE PURCHASE OF INSURANCE.

(C) CONSTRUCTION.--NOTHING IN THIS SECTION SHALL BE <-- CONSTRUED AS:

(1) PERMITTING ANY UNFAIR METHOD OF COMPETITION OR AN UNFAIR OR DECEPTIVE ACT OR PRACTICE UNDER THE ACT OF JULY 22, 1974 (P.L.589, NO.205), KNOWN AS THE UNFAIR INSURANCE PRACTICES ACT;

OR (2) PROHIBITING AN INSURANCE PRODUCER FROM OFFERING OR GIVING TO AN INSURED, FOR FREE OR AT A DISCOUNTED PRICE, SERVICES OR OTHER OFFERINGS THAT RELATE TO LOSS CONTROL OF THE RISKS COVERED UNDER THE POLICY.

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