Senate Bill 1031 (Laughlin-R- Erie) is being considered by the Senate Banking Insurance Committee on January 30. The Bill has its genesis in HB 1335/SB 956 and HB 1851 related to Insurance Department transparency on the use of outside vendors for exam related work and exam best practices. HB 1335, a PAMIC initiative, passed the House unanimously late last year and is in the Senate Banking & Insurance Committee for consideration. HB 1851 (PAMIC supports this bill), has not been considered by the House Insurance Committee.
Senate Bill 1031 combines the provisions of HB 1335/SB 956 and HB 1851 into a single bill that accomplished the provisions in each respectively. There is broad support form the General Assembly and the Insurance department for these bills. The provisions would require the PID to produce an annual report on their use of outside vendors performing and costs for regulatory work (both Financial & Market Conduct exams, and other related regulatory work). Additionally, the bill requires a written estimate of insurance company examination costs being given to the carrier along with an estimated timetable for exam completion. Furthermore, there would have to be a meeting held before the formal examination starts to explain to the carrier the scope of what is to be examined and discuss alternatives to reduce the cost and time the exam takes. This addresses a standing issue by both property/casualty companies (particularly Mutual Insurance Companies) and health insurers.
This article was featured in the PAMIC 360