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QuickServe State Laws |
PennsylvaniaTable of Contents
1. Unfair Claims Practices Act 6. Consumer Auto Repair Practices Acts 7. Consumer Sales Practices Acts -- We have not found any law yet. 8. Diminished Value -- We have not found any law yet. 9. False & Misleading Advertising 10. False Use of Insurer’s Name 11. Home Sales Act -- We have not found any law yet. 12. Imitation Crash Parts Regulations
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Definitions:
More>> Click here for more information on a section.
Updates>> Click here for possible future updates of that section; current
text is shown in full.
We put Unfair Claims Practices, Third-Party Regulations and Unfair Trade
Practices first and organized all other laws alphabetically to make it easier
for you to find a particular law or regulation. To get to a particular topic on
this page you can either click on it in the table of contents or scroll down. To
get back to the table of contents simply click on the link that says back to top
beneath each section.
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§ 1171.5. Unfair methods of competition and unfair or
deceptive acts or practices defined.
1. Any of the following acts if committed or performed with such
frequency as to indicate a business practice shall constitute unfair claim
settlement or compromise practices.
i. Misrepresenting pertinent facts or policy or contract provisions relating to
coverages at issue.
ii. Failing to acknowledge and act promptly upon written or oral communications
with respect to claims arising under insurance policies.
iii. Failing to adopt and implement reasonable standards for the prompt
investigation of claims arising under insurance policies.
iv. Refusing to pay claims without conducting a reasonable investigation based
upon all available information.
v. Failing to affirm or deny coverage of claims within a reasonable time after
proof of loss statements have been completed and communicated to the company or
its representative.
vi. Not attempting in good faith to effectuate prompt, fair and equitable
settlements of claims in which the company's liability under the policy has
become unreasonably clear.
vii. Compelling persons to institute litigation to recover amounts due under an
insurance policy by offering substantially less than the amounts due and
ultimately recovered in actions brought by such persons.
viii. Attempting to settle a claim for less than the amount to which a
reasonable man would have believed he was entitled by reference to written or
printed advertising material accompanying or made part of an application.
ix. Attempting to settle or compromise claims on the basis of an application
which was altered without notice to or knowledge or consent of the insured of
such alteration at the time such alteration was made.
x. Making claims payments to insureds or beneficiaries not accompanied by a
statement setting forth the coverage under which payments are being made.
xi. Making known to insureds or claimants a policy of appealing from arbitration
awards in favor of insureds or claimants to induce or compel them to accept
settlements or compromises less than the amount awarded in arbitration.
xii. Delaying the investigation or payment of claims by requiring the insured,
claimant or the physician of either to submit a preliminary claim report and
then requiring the subsequent submission of formal proof of loss forms, both of
which submissions contain substantially the same information.
xiii. Failing to promptly settle claims, where liability has become reasonably
clear, under one portion of the insurance policy coverage in order to influence
settlements under other portions of the insurance policy coverage or under other
policies of insurance.
xiv. Failing to promptly provide a reasonable explanation of the basis in the
insurance policy in relation to the facts or applicable law for denial of a
claim or for the offer of a compromise settlement.
xv. Refusing payment of a claim solely on the basis of an insured's request to
do so unless:
(a) The insured claims sovereign, eleemosynary, diplomatic, military service, or
other immunity from suit or liability with respect to such claim;
(b) The insured is granted the right under the policy of insurance to consent to
settlement of claims; or
(c) The refusal of payment is based upon the insurer's independent evaluation of
the insured's liability based upon all available information.
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§ 146.8. Standards for prompt, fair and equitable
settlements applicable to automobile insurance.
(a) Insurers may not recommend that third-party claimants make claim
under their own policies solely to avoid paying claims under the insurer’s
insurance policy or insurance contract.
(b) Insurers may not require a claimant to travel unreasonably either to
inspect a replacement automobile, to obtain a repair estimate or to have the
automobile repaired at specific repair shops.
(c) Insurers shall, upon the request of the claimant, include the first-party
claimant’s deductible, if any, in subrogation demands. Subrogation recoveries
shall be shared on a proportionate basis with the first-party claimant, unless
the deductible amount has been otherwise recovered. A deduction for expenses can
not be made from the deductible recovery unless an outside attorney is retained
to collect the recovery. The deduction may then be for only a pro rata share of
the allocated loss adjustment expense.
(d) If an insurer prepares an appraisal of the cost of automobile repairs, the
appraisal shall be in an amount for which it may be reasonably expected the
damage can be satisfactorily repaired. The insurer shall give a copy of the
appraisal to the claimant and may furnish to the claimant, upon his unsolicited
request, the names of two or more conveniently located repair shops.
(e) When the amount claimed is reduced because of betterment or depreciation,
information for the reduction shall be contained in the claim file. The
deductions shall be itemized and specified as to dollar amount and shall be
appropriate for the amount of deductions.
(f) When the insurer elects to repair in a first-party claim, the insurer shall
cause the damaged automobile to be restored to its condition prior to the loss
at no additional cost to the claimant other than as stated in the policy and
within a reasonable period of time.
(g) The insurer may not use as a basis for cash settlement with a first-party
claimant an amount which is less than the amount which the insurer would pay if
repairs were made, other than in total loss situations, unless the amount is
agreed to by the insured or provided by the insurance policy or insurance
contract.
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§ 146.10. Written notice to
claimants of payment of claim in third-party settlements.
(a) Upon payment of $1,000 or more in settlement of a third-party
liability claim, if the claimant is a natural person, the insurer shall cause
written notice to be mailed to the claimant at the same time payment is made, by
the insurer or its representative, including the insurer’s attorney, to the
claimant’s attorney or other representative of the claimant by draft, check or
otherwise.
(b) Nothing in this subsection will constitute a violation of this chapter if
an insurer makes a good faith effort to comply with this section.
(c) A violation of this section will be deemed to occur if an insurer fails to
provide the notice to claimants with a frequency that indicates that it is a
general business practice.
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§ 1171.5. Unfair methods of competition and unfair or
deceptive acts or practices defined.
(a) "Unfair methods of competition" and "unfair or deceptive acts or
practices" in the business of insurance means:...
3. Making, issuing, publishing or circulating any oral or written statement
which is false or maliciously critical of or derogatory to the financial
condition of any person, and which is calculated to injure such person.
4. Entering into any agreement to commit, or by any concerted action committing,
any act or boycott, coercion or intimidation resulting in or tending to result
in unreasonable restraint of, or monopoly in, the business of insurance.
5. Knowingly filing with any supervisory or other public official, or knowingly
making, issuing, publishing or circulating any false material statement of fact
as to the financial condition of a person, or knowingly making any false entry
of a material fact in any book, report or statement of any person, or knowingly
omitting to make a true entry of any material fact pertaining to the business of
such person in any book, report or statement of such person.
6. Issuing or delivering or permitting agents, officers or employees to issue or
deliver agency company stock or other capital stock, or benefit certificates or
shares in any common-law corporation, or securities or any special or advisory
board contracts or other contracts of any kind promising returns and profits as
an inducement to insurance....
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§ 1171.6. Non-liability for statements or information
provided.
There shall be no liability on the part of and no cause of action of any
nature shall arise against the insurance commissioner, any insurer, the
authorized representatives, agents and employees of either, or of any firm,
person or corporation furnishing to the insurer information as to reasons for
cancellation or refusal to renew for any statement made by them in complying
with this act or for providing information pertaining thereto.
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§ 62.3. Applicable standards for
appraisal.
(b) In addition to the requirements in the act, the appraisal shall
contain a written disclosure which includes the following:
(3) A statement that there is no requirement to use any specified repair shop.
(4) A statement informing the consumer that information regarding repair
facilities which will be able to repair the vehicle for the appraised amount is
available from the insurer. If the consumer receives information from the
insurer, the information shall include disclosure that there is no requirement
to use any specified repair shop.
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According to data the Society of Collision Repair Specialists collected between 1995 and 1999, caps in Pennsylvania are illegal. In other words, insurers cannot put a limit on what they will pay for a product, procedure or repair, particularly paint and materials. We published a story on caps, including a table with the data collected by SCRS in our February 2000 issue.
Generic Caps Letter -- Prepared by Beyond Parts & Equipment
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______________ Insurance Insured: ______________________ Claim #: ______________________ Vehicle ID: Attn: Customer Service In your repair appraisal of my vehicle, you limited paint/paint materials payment and/or related costs, such as refinish labor, to $___, while my cost is $___, or $___ more than you allow. Your policy with me promises to restore my car to preloss condition at no cost other than the deductible my policy specifies. If I have to pay more than you allow for paint/materials and other costs, I will have to pay my deductible plus $___ before my car will be returned to me. Please tell me exactly where my policy says you may limit payments for paint/materials and other costs. If you can't, please authorize the full cost, $___, for all expenses. If you don't authorize full pay and you can't show me where my policy says you may restrict payment, I shall report this incident to [State] Department of Insurance, stating that ____________ Insurance isn't honoring its promise to restore my vehicle to preloss condition at no cost other than the deductible as called for in the policy. I look forward to your prompt response; I'd like my vehicle repaired as quickly as possible. Sincerely, cc: Insurance Commissioner |
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§ 301.5. General provisions—repair shop.
With regard to a repair shop, the following is considered unfair methods
of competition and unfair or deceptive acts or practices:
(1) Making a statement, directly or indirectly, which the dealer or repair shop
knows or should know to be untrue or misleading including but not limited to the
following:
(i) That repairs are necessary or desirable or that repairs are not necessary
or desirable when such is not, in fact, true.
(ii) That a vehicle is in a dangerous condition or use of the vehicle may
produce harm to the customer or that a vehicle is not in a dangerous condition
or use of the vehicle may not produce harm to the customer when such is not, in
fact, true.
(iii) That repairs have been performed on a vehicle when such is not, in fact,
true.
(2) Failing to record in writing and to provide a copy of the record to the
customer, where possible, prior to commencing repairs on the vehicle of a
customer:
(i) The name and address of the customer and a telephone number, if any, at
which the customer can be reached.
(ii) The date and approximate time the vehicle of the customer was delivered
for repairs.
(iii) The year, make and registration number of the vehicle of the customer.
(iv) The odometer reading on the vehicle of the customer.
(v) The specific repairs requested by the customer or, if there is no specific
request, a brief description of the problems encountered by the customer with
the vehicle.
(3) Charging a customer for repairs which were not authorized in writing or
charging a customer a price for agreed-upon maintenance or repair services which
price, including parts and labor, was not authorized in writing or displayed in
a clear and conspicuous manner on the premises. If the repair shop is unable to
obtain advance written authorization because the specific repairs or costs
thereof are not known when the vehicle is delivered for repair, the customer
shall be so informed and shall be afforded the opportunity to select one of the
following options:
(i) No repairs may be performed until the customer is notified of the exact
nature of the repairs to be performed and the total price to be charged,
including parts and labor and the oral or written authorization of the customer
to perform the repairs is obtained.
(ii) Repairs may be initiated, but, if repairs will exceed a price specified
in advance by the customer, the oral or written authorization of the customer to
proceed further shall be obtained.
(iii) Repair of the described problem may be authorized without limitation of
price provided the customer is informed of the hourly labor rate prior to
commencement of repairs.
(4) Failing to display in a clear and conspicuous manner on the premises where
possible and failing to disclose to a customer prior to obtaining oral or
written authorization for repairs:
(i) That the customer has the right upon request to have parts replaced
returned to the customer at the completion of the service or to inspect the
parts, where possible, if the parts are being returned to the manufacturer or
some other person under the terms of the warranty or rebuilding arrangement.
(ii) Whether a part to be supplied is new, used, reconditioned or rebuilt.
(iii) The conditions under which the repair shop may impose daily or hourly
storage charges for a vehicle and the amount of the charges.
(iv) The amount of a charge to a customer for an estimate or diagnosis.
(5) Failing to maintain the following written record when oral authorization is
received for certain repairs:
(i) The date and time the authorization is received.
(ii) The identity of the employe receiving the oral authorization and the name
of the person making the authorization.
(iii) A description of the exact authorization received.
(iv) If authorization is received over the telephone and the shop placed the
call, the telephone number called.
(6) Failing to complete repairs on a motor vehicle within 24 hours of its
delivery by the customer or within the time specified by the repair shop or
dealer unless the customer is informed of and consents to the delay.
(7) Failing to remedy promptly, at no charge to the customer, a repair or
maintenance service performed by it on the customer’s vehicle which was not
performed in a skilled and workmanlike manner; provided that the customer
promptly complains or brings the matter to the attention of the repair shop.
(8) Failing to provide a customer at the completion of repair or maintenance
work, including warranty repair work, performed on the vehicle of the customer a
dated, written invoice containing the following information:
(i) The name and address of the customer and repair shop.
(ii) The date the vehicle of the customer was delivered for service.
(iii) The year, make and registration number of the vehicle of the customer
and the odometer reading of the vehicle at the time the repairs were completed.
(iv) An itemized list of the specific repair or maintenance services performed
on the motor vehicle of the customer.
(v) A list of the parts supplied by name or number, the price charged for the
parts and the total amount charged the customer for the parts.
(vi) If a part supplied was not new, a statement that the part was either
used, reconditioned or rebuilt.
(vii) The labor charge for the repair work, setting forth the number of hours,
the price charged for each hour and the total amount charged the customer for
labor.
(viii) The total amount charged to the customer for parts and labor; provided,
however, that the price information required by this subparagraph and
subparagraphs (v) and (vii) need not be provided if the price charged to the
customer for the repair or maintenance work is a single charge for the
particular service which charge was included in a schedule of charges posted in
a clear and conspicuous manner on the premises of the repair shop or otherwise
disclosed to the customer at the time the vehicle was delivered for service or
repair. No other charges are permitted by this paragraph unless they are clearly
and conspicuously disclosed to the customer prior to the commencement of
repairs.
(9) Charging a customer for repairs which have not actually been performed.
(10) Failing or refusing to provide a customer with an exact copy at no
additional charge of a document in addition to those required by paragraphs (2)
and (8) in which legal obligations are imposed on the customer.
(11) Using a vehicle of a customer for a purpose other than a test drive or
delivery to the customer unless the express written authorization of the
customer is obtained in advance.
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We have not found a law yet.
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We haven't found any law yet.
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§ 1171.5. Unfair methods of competition and unfair or
deceptive acts or practices defined.
(a) "Unfair methods of competition" and "unfair or deceptive acts or
practices" in the business of insurance means:
1. Making, issuing, publishing or circulating in any manner an advertisement,
announcement or statement containing any representation or statement with
respect to the business of insurance or with respect to any person in the
conduct of his insurance business which is untrue, deceptive or misleading.
2. Making, issuing, publishing or circulating any oral or written statement
which is false or maliciously critical of or derogatory to the financial
condition of any person, and which is calculated to injure such person.
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§ 1171.5. Unfair methods of competition and unfair or
deceptive acts or practices defined.
(a) "Unfair methods of competition" and "unfair or deceptive acts or
practices" in the business of insurance means:
v. Uses any name or title of any insurance policy or class of insurance policies
misrepresenting the true nature thereof;
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§ 62.3. Applicable standards for appraisal.
(b) In addition to the requirements in the act, the appraisal shall
contain a written disclosure which includes the following:
(9) The location where the listed parts are available in a condition equivalent
to, or better than, the condition of the replaced parts prior to the accident.
(10) If the appraisal includes aftermarket crash parts, a statement that the
appraisal has been prepared based on the use of aftermarket crash parts, and
that if the use of an aftermarket crash part voids the existing warranty on the
part being replaced or any other part, the aftermarket crash part shall have a
warranty equal to or better than the remainder of the existing warranty.
(11) Identification of all aftermarket crash parts and a definition of
aftermarket crash parts consistent with § 62.1 (relating to definitions), if
these parts are used.
(c) An appraisal for the repair of the motor vehicle shall be made in the
amount necessary to return the motor vehicle to its predamaged condition. If the
consumer wishes to repair the motor vehicle to a condition better than the
predamaged condition, the appraisal need only specify the cost of repairing the
vehicle to its predamaged condition.
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| ______________ Insured: Pennsylvania
Customer Letter
______________ Claim: ______________ Vehicle ID: Attn: Customer Service
In your repair appraisal of my vehicle (listed above), you designated either used salvage or new imitation replacement crash parts not manufactured by or for my vehicle’s manufacturer. Section 62.3 (10 and (11) requires parts capable of restoring my vehicle to its preloss condition. I therefore request written verification that the parts you designated match my original vehicle manufacturer’s replacement parts in fit, quality, and performance. Regarding performance, to protect my safety and my family’s, I request data verifying that these parts have been proxy crash tested and perform identically to the original parts that were on my vehicle. For used salvage parts, I shall require like kind and quality to parts on my vehicle as determined by a written description of the trade name, manufacturer’s name, type, engine serial number and vehicle identification number, year, color, number of miles the original vehicle had traveled at the time it was declared salvage, and the type of accident or event that caused the vehicle to be declared salvage. In either case I also request a written guarantee that my vehicle’s resale/trade-in value will remain consistent with that of other vehicles of similar condition (before the accident) and mileage, and that all my existing vehicle warranties will remain intact. In this guarantee, please specify that if I suffer any economic loss due to the parts you require, your company will reimburse me for that loss. If I’m unhappy with your reply, I’ll ask that you designate only new original equipment parts to repair my vehicle. If you’re not willing to do so, I will report to the Pennsylvania Department of Insurance that you are violating policy requirements to restore my vehicle to its preloss condition and value; the parts on my vehicle before the accident had been proxy tested following NHTSA requirements. Independent research on GM cars and Volvos has proven that imitation parts lower resale value and don’t perform properly in crash tests. Used salvage parts aren’t sufficient to maintain my vehicle’s manufacturer warranties, and they aren’t crash tested. Finally, court cases involving imitation parts have consistently been decided against imitations; new cases against imitation and salvage parts are now pending nationally against many insurers, and Consumer Reports has researched these parts and turned thumbs down on them (2/99 issue). I look forward to your prompt response. Sincerely,
cc: Insurance Commissioner |
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§ 62.1. Definitions.
Appraisal—
(i) A written monetary estimate of physical damage sustained to a motor
vehicle when the making of the estimate is assigned in order to allow the return
of the vehicle to its predamaged condition.
(ii) The term includes estimates made by the insurer, its employees, its
agents or related entities or individuals or entities assigned to make the
estimate.
Appraiser—A natural person in this Commonwealth who makes appraisals of
motor vehicle physical damage.
Commissioner—The Insurance Commissioner of the Commonwealth.
Consumer—The owner of the motor vehicle which has sustained damage or the
owner’s representative.
Dealer—An individual licensed, active and knowledgeable in the sale of
used motor vehicles similar to that being appraised.
Insurer—All companies, associations and exchanges engaged in the
insurance business of insurance companies and self-insurers.
Motor vehicle—A motorized device, including a trailer attached thereto,
in, upon or by which a person or property is or may be transported or drawn upon
a public highway.
§ 62.2. Experience
and fitness requirements for licensing.
(a) In addition to the requirements in sections 3, 4, 8 and 11 of the
act (63 P. S. § § 853, 854, 858 and 861), to qualify to take the examination
required for appraisers, an applicant shall establish competency to fulfill the
responsibility of being an appraiser.
(1) Competency may be demonstrated by providing written documentation of one of
the following:
(i) A minimum of 6 months continuous experience within the previous 3 years at
an occupation, such as body repair, that directly involves the estimation of
physical damage to motor vehicles.
(ii) Successful completion of education or training related to appraising
motor vehicle physical damage taken within the previous 3 years.
(2) The applicant shall provide additional information relating to experience,
education or training to the Commissioner or a designee upon request.
(b) An application for a license may be denied for any of the following:
(1) The applicant has provided incorrect, misleading or incomplete answers to
interrogatories on forms incidental to applying for a license.
(2) The applicant has been denied a license or has had an existing license
revoked, suspended or not renewed by the Department or a regulatory authority in
another state, territory or possession of the United States, or in the District
of Columbia, or the Canadian provinces.
(3) The applicant does not possess the professional competence and
trustworthiness required to engage in conducting motor vehicle appraisals.
(4) An applicant has pleaded guilty, entered a plea of nolo contendere or has
been found guilty of a felony in a court of competent jurisdiction, or has
pleaded guilty, entered a plea of nolo contendere or been found guilty of
criminal conduct which relates to the applicant’s suitability to conduct motor
vehicle appraisals.
(i) Examples of criminal violations which the Department may consider related
to the applicant’s suitability to engage in the business of an appraiser
include: unlawful practices, embezzlement, obtaining money under false
pretenses, conspiracy to defraud, bribery or corrupt influence, perjury or false
swearing, unlicensed activity or a criminal offense involving moral turpitude or
harm to another.
(ii) Examples of violations or incidents which the Department will not
consider related to the applicant’s suitability to engage in the business of an
appraiser are all summary offenses, records of arrests if there is no conviction
of a crime based on the arrest, convictions which have been annulled or expunged
or convictions for which the applicant has received a pardon from the Governor.
(5) If applicable, applicants shall also comply with the insurance-related
provisions in sections 320 and 603(a) of the Violent Crime Control and Law
Enforcement Act of 1994 (18 U.S.C.A. § § 1033 and 1034).
(6) The applicant has unpaid any overdue amounts, including, fees and civil
penalties, owing to the Department.
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§ 115.1. Definitions.
The following words and terms, when used in this chapter, have the
following meanings, unless the context clearly indicates otherwise:
Act—The act of April 25, 1921 (P. L. 276, No. 136) (40 P. S.
§ § 301—308)(Repealed).
Business day—A day other than a Saturday, Sunday or Holiday.
Insurance company—An insurance company, association or exchange
authorized to transact insurance business in this Commonwealth.
Public adjuster—A person, partnership, association, corporation or other
legal entity licensed as a public adjuster or public adjuster solicitor under
the act.
§ 115.2. Contents
of public adjuster contracts, minimum standards.
All public adjuster contracts shall contain the following minimum
information:
(1) The title of the contract: Public Adjuster Contract.
(2) Business name, address and phone number of the public adjuster.
(3) Name and address of insured.
(4) The consideration, expressed as a percentage and as a maximum amount.
(5) Date of execution (day, month, year).
(6) Signature of the insured and the public adjuster.
[Public adjusters work for first and third-party claimants. For the rest of this
section click on this link.]
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[These may be of help to glass shops in countering networks,
which are selling a service instead of taking a first notice of loss. To read
the full section, click on the link below. It is too long to print here, but
we've left a few sections we think may give you food for thought.]
Section 2. The act is amended by adding sections to read:
§ SECTION 5.1.
Blocking of caller identification and other
telemarketing screening products or services
prohibited.
No person TELEMARKETER shall
take any action with the primary intent:
(1) To prevent the transmission of a
telephone
solicitor's TELEMARKETER'S name or telephone
number to any recipient of a telephone solicitation
call when the equipment or service used by the
telephone solicitor TELEMARKETER is
capable of creating and transmitting the
telephone
solicitor's TELEMARKETER'S name or telephone
number; or
(2) To circumvent, bypass or disable any product or
service used by the person
RESIDENTIAL TELEPHONE SUBSCRIBER to screen
telephone calls. ...
SECTION 7.1. PRIVATE CAUSE OF ACTION.
A) GENERAL RULE.--ANY PERSON WHO SUFFERS ANY
ASCERTAINABLE LOSS OF MONEY OR PROPERTY, REAL OR
PERSONAL, AS A RESULT OF A VIOLATION OF SECTION
5.2 MAY BRING A PRIVATE ACTION TO RECOVER ACTUAL
DAMAGES OR $100, WHICHEVER IS GREATER. THE COURT MAY, IN
ITS DISCRETION, AWARD UP TO THREE TIMES THE ACTUAL
DAMAGES SUSTAINED, BUT NOT LESS THAN $100, AND MAY
PROVIDE SUCH ADDITIONAL RELIEF AS IT DEEMS
NECESSARY AND PROPER. THE COURT MAY AWARD TO THE
PLAINTIFF, IN ADDITION TO OTHER RELIEF PROVIDED BY
THIS SECTION, COSTS AND REASONABLE ATTORNEY FEES.
B) OTHER LAW.--AN ACTION UNDER THIS SECTION IS IN
LIEU OF AN ACTION UNDER THE ACT OF DECEMBER 17,
1968 (P.L.1224, NO.387), KNOWN AS THE UNFAIR TRADE
PRACTICES AND CONSUMER PROTECTION LAW.
(K) INVESTIGATION, ENFORCEMENT AND REPORTING.--
(1) THE BUREAU OF CONSUMER PROTECTION IN THE OFFICE
OF ATTORNEY GENERAL SHALL INVESTIGATE ANY
COMPLAINTS RECEIVED CONCERNING VIOLATIONS OF THIS
SECTION. IF, AFTER INVESTIGATING ANY COMPLAINT, THE
ATTORNEY GENERAL FINDS THAT THERE HAS BEEN A
VIOLATION OF THIS SECTION, THE ATTORNEY GENERAL MAY
BRING AN ACTION TO IMPOSE A CIVIL PENALTY AND TO
SEEK OTHER RELIEF, INCLUDING INJUNCTIVE RELIEF, UNDER THE ACT
OF DECEMBER 17, 1968 (P.L.1224, NO.387), KNOWN AS THE
UNFAIR TRADE PRACTICES AND CONSUMER PROTECTION LAW.
(2) THE ATTORNEY GENERAL SHALL REMIT 10% OF ANY
CIVIL PENALTY COLLECTED UNDER THIS SECTION TO THE
PERSON FILING THE COMPLAINT LEADING TO THE CIVIL
PENALTY. IN NO EVENT, HOWEVER, SHALL THE AMOUNT OF
THIS REMITTANCE EXCEED $100 FOR ANY PERSON. ...
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§ 1171.5. Unfair methods of competition
and unfair or deceptive acts or practices defined.
1. Any of the following acts if committed or performed with such
frequency as to indicate a business practice shall constitute unfair claim
settlement or compromise practices.
i. Failing to acknowledge and act promptly upon written or oral communications
with respect to claims arising under insurance policies.
ii. Failing to adopt and implement reasonable standards for the prompt
investigation of claims arising under insurance policies.
iii. Refusing to pay claims without conducting a reasonable investigation based
upon all available information.
iv. Failing to affirm or deny coverage of claims within a reasonable time after
proof of loss statements have been completed and communicated to the company or
its representative.
v. Failing to promptly provide a reasonable explanation of the basis in the
insurance policy in relation to the facts or applicable law for denial of a
claim or for the offer of a compromise settlement.
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§ 146.5. Failure to acknowledge
pertinent communications.
(a) Every insurer, upon receiving notification of a claim, shall, within
10 working days, acknowledge the receipt of the notice unless payment is made
within the period of time. If an acknowledgment is made by means other than
writing, an appropriate notation of the acknowledgment shall be made in the
claim file of the insurer and dated. Notification given to an agent of an
insurer shall be notification to the insurer, dating from the time the insurer
receives notice.
(b) Every insurer, upon receipt of an inquiry from the Department respecting a
claim shall, within 15 working days of receipt of the inquiry, furnish the
Department with an adequate response to the inquiry.
(c) An appropriate reply shall be made within 10 working days on other
pertinent communications from a claimant which reasonably suggest that a
response is expected.
(d) Every insurer, upon receiving notification of claim, shall provide within
10 working days necessary claim forms, instructions and reasonable assistance so
that first-party claimants can comply with the policy conditions and reasonable
requirements of the insurer. Compliance with this subsection within 10 working
days of notification of a claim shall constitute compliance with subsection (a).
§ 146.6. Standards for prompt
investigation of claims.
Every insurer shall complete investigation of a claim within 30 days
after notification of claim, unless the investigation cannot reasonably be
completed within the time. If the investigation cannot be completed within 30
days, and every 45 days thereafter, the insurer shall provide the claimant with
a reasonable written explanation for the delay and state when a decision on the
claim may be expected.
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§ 1171.5. Unfair methods of competition and unfair or
deceptive acts or practices defined.
1. Any of the following acts if committed or performed with such
frequency as to indicate a business practice shall constitute unfair claim
settlement or compromise practices.
i. Delaying the investigation or payment of claims by requiring the insured,
claimant or the physician of either to submit a preliminary claim report and
then requiring the subsequent submission of formal proof of loss forms, both of
which submissions contain substantially the same information.
ii. Failing to promptly settle claims, where liability has become reasonably
clear, under one portion of the insurance policy coverage in order to influence
settlements under other portions of the insurance policy coverage or under other
policies of insurance.
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§ 146.7. Standards for prompt, fair
and equitable settlements applicable to insurers.
(a) Acceptance or denial of a claim shall comply with the following:
(1) Within 15 working days after receipt by the insurer of properly executed
proofs of loss, the first-party claimant shall be advised of the acceptance or
denial of the claim by the insurer. An insurer may not deny a claim on the
grounds of a specific policy provision, condition or exclusion unless reference
to the provision, condition or exclusion is included in the denial. The denial
shall be given to the claimant in writing and the claim file of the insurer
shall contain a copy of the denial.
(2) Where there is a reasonable basis supported by specific information
available for review by the insurance regulatory authority that the first-party
claimant has fraudulently caused or contributed to the loss by arson or other
illegal activity, the insurer is relieved from the requirements of this
subsection; provided, however, that the claimant shall be advised of the
acceptance or denial of the claim within a reasonable time for full
investigation after receipt by the insurer of a properly executed proof of loss.
(b) If a claim is denied for reasons other than those described in subsection
(a) and is made by any other means than writing, an appropriate notation shall
be made in the claim file of the insurer.
(c) The following provisions govern acceptance or denial of a claim where
additional time is needed to make a determination:
(1) If the insurer needs more time to determine whether a first-party claim
should be accepted or denied, it shall so notify the first-party claimant within
15 working days after receipt of the proofs of loss giving the reasons more time
is needed. If the investigation remains incomplete, the insurer shall, 30 days
from the date of the initial notification and every 45 days thereafter, send to
the claimant a letter setting forth the reasons additional time is needed for
investigation and state when a decision on the claim may be expected.
(2) Where there is a reasonable basis supported by specific information
available for review by the insurance regulatory authority for suspecting that
the first-party claimant has fraudulently caused or contributed to the loss by
arson or other illegal activity, the insurer is relieved from the requirements
of this subsection; provided, however, that the claimant shall be advised of the
acceptance or denial of the claim by the insurer within a reasonable time for
full investigation after receipt by the insurer of a properly executed proof of
loss.
(d) Insurers may not fail to settle first-party claims on the basis that
responsibility for payment should be assumed by others except as may otherwise
be provided by policy provisions.
(e) Insurers may not continue negotiations for settlement of a claim directly
with a claimant who is neither an attorney nor represented by an attorney until
the rights of the claimant may be affected by a statute of limitations or a
policy or contract time limit, without giving the claimant written notice that
the time limit may be expiring and may affect the rights of the claimant. The
notice shall be given to first-party claimants 30 days, and to third-party
claimants 60 days, before the date on which the time limit may expire.
(f) An insurer may not make statements which indicate that the rights of a
third-party claimant may be impaired if a form or release is not completed
within a given period of time unless the statement is given for the purpose of
notifying the third-party claimant of the provision of a statute of limitations.
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§ 62.3. Applicable standards for
appraisal.
(1) Under this subsection, replacement value under the policy provisions
covering the total loss of a motor vehicle including an unrecovered motor
vehicle shall be determined by one of the following methods:
(i) Guide source method. The appraiser shall calculate the average of
two figures reflecting the retail book value of a vehicle of like kind and
condition, as provided by guide sources approved by the Commissioner. A listing
of approved guide sources will be published once a year in the Pennsylvania
Bulletin. The appraised value shall be adjusted for equipment and mileage,
less the cost of repair of damage which preexisted the accident in question. No
other deductions may be taken except for salvage and then only if the owner
elects to retain the vehicle.
(ii) Actual cost method. The appraiser shall determine the actual cost
of purchase of an available motor vehicle of like kind and quality in condition
similar to or better than the motor vehicle being appraised in its predamaged
condition. The appraiser shall specify, in writing, the location of the vehicle
of like kind and quality.
(iii) Dealer quotation method. The appraiser shall consult with dealers
or other persons knowledgeable in the field to secure quotations as to the value
of the motor vehicle being appraised. At least two quotations shall be secured.
The figures thus secured shall be averaged.
(2) If the motor vehicle is listed in at least two guide sources approved by
the Commissioner, the replacement value shall be calculated by the guide source
method or by the actual cost method, as described in paragraph (1)(i) and (ii).
If the actual cost method is used, and the owner of the damaged vehicle shows
that the replacement vehicle is not of the same kind and quality, both
calculations referenced in this paragraph shall be made, and the higher of the
values obtained shall be offered in settlement.
(3) If the motor vehicle is not listed in at least two of the sources
authorized by paragraph (1)(i), or if the vehicle differs materially from the
average vehicle because of factors not considered in the guide sources, for
example, antique or classic cars, vehicles no longer manufactured and unique
vehicles, the replacement value shall be calculated by the actual cost method or
by the dealer quotation method, as described in paragraph (1)(ii) and (iii). If
the dealer quotation method is used, both calculations referenced in this
paragraph shall be made, and the higher of the values obtained shall be offered
in settlement.
(4) Applicable sales tax on the replacement cost of a motor vehicle shall be
included as part of the replacement value.
(5) The licensed appraiser’s total loss evaluation report shall contain the
names and addresses of those persons from whom quotations were secured, the date
secured, and whether or not a similar vehicle was available.
(6) The licensed appraiser’s file shall show the method used to determine the
replacement value in a given locality.
(7) The appraiser is responsible for ensuring that a copy of the total loss
evaluation report be sent within 5 working days to the consumer by the appraiser
after the appraisal is completed. If a settlement offer is extended before the
consumer receives the total loss evaluation report, the consumer shall be
advised of the total loss evaluation report’s contents and of the consumer’s
right to be sent a copy within 5 days after its completion.
(f) In addition to the requirements in section 11 of the act (63 P. S. § 861),
an appraiser shall:
(1) Not have a conflict of interest in the making of an appraisal. This chapter
and the act, and this section in particular, shall be strictly interpreted to
protect the interest of the consumer and place the burden upon the appraiser to
eliminate any conflict of interest in the making of an appraisal.
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