Part I: Legislative Overview

Today's Topics Review of material in packet Budget preview Legislative session in review A peak at the GA at work Insurance bills passed New Bills and Sponsorship Memos PAMIC Legislative priorities Transparency CGAD Other PID Legislative Priorities Amicus Curia PAMIC Pac

No PID Budget Hearings Scheduled Consolidation of Services Rumors: Budget Preview Tax Revenues are $367 million below estimates as of January 2017 Estimated $714 million shortfall by end of Fiscal Year 2016/17 Projection of $1.5 billion shortfall by June 2018 Cost Drivers: Human Services Pensions Corrections What’s to be done in short term: Consolidating HR, Admin, IT functions Hiring Freeze/Spending limits Closing Prisons Agency Consolidations What’s to be done long term: Radical rethinking of government Raise taxes Other Revenue Enhancers Governor Wolf to present FY 2017/2018 to General Assembly on February 7, 2017 No PID Budget Hearings Scheduled Consolidation of Services Rumors: No new broad based tax increases (PIT, Sales Tax) Premium Tax, Fees are on table

Total Filed = 3,760

New Laws = 307

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New Laws: Legislative Session 2015/16 Full Summaries in Folder

This Session so Far Over 1,700 HCO’s & SCO’s Over 500 Bills & Resolutions PAMIC tracking 20 items All tracked items can be seen on PAMIC website in “Members Area” - (updates daily)

House Bills HB 35 Thomas, Curtis Amends re Breach of Personal Information Act (PN 42) Amends the Breach of Personal Information Notification Act providing for disposal of materials containing personal information by stipulating various methods which may be employed. Lays out penalties for violations. Effective in 60 days HB 36 Amends Breach of Personal Information Act (PN 43) Amends the Breach of Personal Information Notification Act providing for disposal of materials containing personal information by amending the definition of "personal information" to include various additional criteria. Effective in 60 days. HB 214 Miller, Daniel Amends Title 75 re digitized driver's license (PN 179) Amends title 75 (Vehicles) providing for the option of a digitized driver's license through a mobile app offered by the Department of Transportation. Effective in 60 days. HB 238 Kampf, Warren Act re Fairness in Claims & Transparency Act

Senate Bills SB 86 Greenleaf, Stew Act re regulation of service contracts (PN 65) The Service Contract Act provides for the regulation of service contracts and for powers and duties of the Insurance Commissioner; and imposes a civil penalty. Effective in 60 days. SB 190 McGarrigle, Tho Amends Insurance Dept Act re storage facility PN 179) Amends the Insurance Department Act adding an article providing for self-service storage facility insurance. The Insurance Department may issue a self-service storage agent license to an owner that has complied with the requirements of the bill authorizing the owner to offer or to sell the kinds of insurance prescribed in this section in connection with and incidental to the rental of space at a self-service storage facility. The bill provides for application, sale of insurance, requirements, training, exclusions, and promotions. Effective in 60 days.

HCO’s & SCO’s HCO 108 Driscoll, Michael Financial literacy capstone course HCO 316 Murt, Thomas Insurance policy premium tax HCO 319 Flood Insurance Premium Assistance Program HCO 383 Miller, Daniel Digitized driver's license HCO 443 DeLuca, Anthony Unfair discrimination in auto insurance HCO 515 Freeman, Robert Workers' Compensation Act & health insurance HCO 581 Charlton, Alexa Self storage unit content insurance HCO 632 Saccone, Rick Drug convictions & license suspension removal HCO 719 Kampf, Warren Fairness in Claims and Transparency Act HCO 811 Dush, Cris Volunteer fire & EMS services reimbursements HCO 881 Truth in Insurance Advertising online HCO1035 Warren, Perry ( PA Flood Insurance Premium Assistance TF SCO 188 Greenleaf, Stew Regulation of service contracts SCO 401 Rafferty, John Property and casualty insurance & notices

(use handouts as your guide - leave them with legislator) PAMIC Legislative Priorities Resourcing for Solvency Monitoring Cost Transparency (see handout) CGAD (see handout) Other: Budget Related (see handout) Umbrella Policies Minimum Limits Asbestos Trusts When meeting with your legislator today, focus on: Solvency Monitoring issues Budget Issues CGAD (if time permits) (use handouts as your guide - leave them with legislator)

PID Legislative Priorities CGAD - accreditation issue (see comment letter) Market Regulation Accreditation Only P&C issue raised was auto insurance minimum limits (focused on file & use) Main focus is on health insurance

Recent PAMIC Amicus participation: Rancosky Amicus (October 2016 - still pending)): The amicus brief filed by the PDI and PAMIC calls into question whether the two-prong test for statutory insurance bad faith, established decades ago in Terletsky will continue or not. Terletsky v. Prudential Property and Cas. Ins. Co., 649 A.2d 680 (Pa. Super. 1994)[Bad faith plaintiff must show (1) that insurer did not have reasonable basis for denying benefits; and (2) that insurer knew or recklessly disregarded that lack of reasonable basis in denying the claim]. It also calls into question whether the long-held requirement – that a disgruntled insured can only prove that “knowing and reckless disregard” with evidence of some motive of self-interest or ill will – should also be discarded. Wolfe Amicus (July 2014 - decided): On December 15, 2014, the Supreme Court of Pennsylvania held, in a 5-1 decision, that bad faith claims brought pursuant to 42 Pa. C.S. § 8371 may be assigned by an insured to an injured third party under Pennsylvania law. See Allstate Prop. & Cas. Ins. Co. v. Wolfe, No. 39 MAP 2014 (Pa. Dec. 15, 2014).

The PAMIC PAC