PRINTER'S NO. 3236
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 2379
Session of
2024
INTRODUCED BY FRIEL, HILL-EVANS, SANCHEZ, PIELLI, GIRAL,
DONAHUE, KHAN AND OTTEN, JUNE 4, 2024
REFERRED TO COMMITTEE ON INSURANCE, JUNE 4, 2024
AN ACT
1 Amending the act of May 17, 1921 (P.L.682, No.284), entitled "An
2 act relating to insurance; amending, revising, and
3 consolidating the law providing for the incorporation of
4 insurance companies, and the regulation, supervision, and
5 protection of home and foreign insurance companies, Lloyds
6 associations, reciprocal and inter-insurance exchanges, and
7 fire insurance rating bureaus, and the regulation and
8 supervision of insurance carried by such companies,
9 associations, and exchanges, including insurance carried by
10 the State Workmen's Insurance Fund; providing penalties; and
11 repealing existing laws," providing for homeowner's insurance
12 issuance, renewal, cancellation and refusal; and imposing a
13 penalty.
14 The General Assembly of the Commonwealth of Pennsylvania
15 hereby enacts as follows:
16 Section 1. The act of May 17, 1921 (P.L.682, No.284), known
17 as The Insurance Company Law of 1921, is amended by adding an
18 article to read:
19 ARTICLE XIX
20 HOMEOWNER'S INSURANCE ISSUANCE,
21 RENEWAL, CANCELLATION AND REFUSAL
22 Section 1901. Definitions.
23 The following words and phrases when used in this article
 1 shall have the meanings given to them in this section unless the
2 context clearly indicates otherwise:
3 "Affiliated insurer." An insurer that is an "affiliate" as
4 defined in section 1401.
5 "Commissioner." The Insurance Commissioner of the
6 Commonwealth.
7 "Homeowner's insurance policy" or "policy." A policy
8 delivered or issued for delivery in this Commonwealth insuring a
9 property, dwelling and contents of a property or dwelling.
10 "Insurer." An insurance company, association or exchange
11 authorized to transact the business of homeowner's insurance in
12 this Commonwealth.
13 "Nonpayment of premium." Failure of the named insured to
14 discharge when any obligation is due in connection with the
15 payment of premiums on a policy or any installment of the
16 premium, whether the premium is payable directly to the insurer
17 or an agent or indirectly under any premium finance plan,
18 extension or credit.
19 "Renewal" or "to renew." To issue and deliver at the end of
20 an insurance policy period a policy which supersedes a policy
21 previously issued and delivered by the same insurer or
22 affiliated insurer and which provides types and limits of
23 coverage at least equal to those contained in the policy being
24 superseded. The term includes the issuance and delivery of a
25 certificate or notice extending the term of a policy beyond the
26 policy period or term with types and limits of coverage at least
27 equal to those contained in the policy being extended. For the
28 purpose of this article, any policy with a policy period or term
29 of less than 12 months or any period with no fixed expiration
30 date shall be considered as if written for successive policy
20240HB2379PN3236 - 2 -
 1 periods or terms of 12 months.
2 Section 1902. Applicability.
3 (a) General rule.--This article shall only apply to that
4 portion of a homeowner's insurance policy providing for peril
5 coverage, dwelling coverage, coverage of other structures,
6 personal property coverage, loss of use coverage, personal
7 liability coverage and medical payments to others coverage.
8 (b) Exception.--Nothing in this article shall apply:
9 (1) If the insurer has manifested a willingness to renew
10 by issuing or offering to issue a renewal policy, certificate
11 or other evidence of renewal or has manifested an intention
12 by any other means.
13 (2) If the named insured has demonstrated by an overt
14 action to the insurer or agent that the named insured wishes
15 the policy to be canceled or not renewed.
16 (3) To any policy of homeowner's insurance which has
17 been in effect less than 60 days, unless the policy is a
18 renewal policy, except that no insurer shall decline to
19 continue in force such a policy of homeowner's insurance on
20 the basis of the grounds set forth in section 1903(a) and
21 except that if an insurer cancels a policy of homeowner's
22 insurance in the first 60 days, the insurer shall supply the
23 insured with a written statement of the reason for
24 cancellation.
25 Section 1903. Discrimination prohibited.
26 (a) Prohibition.--An insurer may not cancel or refuse to
27 write or renew a homeowner's insurance policy for any of the
28 following reasons:
29 (1) Age.
30 (2) Residence in a specific geographic area.
20240HB2379PN3236 - 3 -
 1 (3) Race.
2 (4) Color.
3 (5) Creed.
4 (6) National origin.
5 (7) Ancestry.
6 (8) Marital status.
7 (9) Sex.
8 (10) Lawful occupation, including military service.
9 (11) The refusal of another insurer to write a policy or
10 the cancellation or refusal to renew an existing policy by
11 another insurer.
12 (12) Disability.
13 (b) Issuance or cancellation.--An insurer may not cancel or
14 refuse to renew a homeowner's insurance policy on the basis of
15 two or fewer claims within the 36-month period prior to the
16 upcoming anniversary date of the policy.
17 (c) Limitation.--For a period 12 months after notice of
18 termination is given to an agent:
19 (1) Except as provided in paragraph (2), an insurer may
20 not cancel or refuse to renew existing policies written
21 through the terminated agent because of termination.
22 (2) An insurer may cancel or refuse to renew only
23 policies as could have been canceled or nonrenewed had the
24 agency relationship continued.
25 (3) An insurer shall be obligated to pay commissions for
26 policies that are continued or renewed through the terminated
27 agent except where:
28 (i) the insurer retained ownership of the
29 expirations of the policies; or
30 (ii) the agent has misappropriated funds or property
20240HB2379PN3236 - 4 -
 1 of the insurer, has failed to remit to the insurer funds
2 due promptly upon demand, has been terminated for
3 insolvency, abandonment, gross or willful misconduct or
4 has had a license suspended or revoked.
5 (d) Coverage.--Subsequent to the 12-month period after
6 notice of termination is given to an agent, an insurer may not
7 cancel or refuse to renew existing policies written through the
8 terminated agent without offering each insured coverage on a
9 direct basis or offering to refer the insured to one or more new
10 agents in the event the terminated agent could not find a
11 suitable insurer acceptable to the policyholder for business.
12 The offer under this subsection need not be made if the insurer
13 could have canceled or not renewed the policy had the agency
14 relationship continued. If the insurer retains ownership of the
15 expirations of policies, the insurer need not offer a new agent.
16 Section 1904. Initiating a policy.
17 An agent issuing a homeowner's insurance policy shall notify
18 the insured, in writing and verbally, of the following
19 information:
20 (1) A homeowner's insurance policy undergoes
21 underwriting for a period of 60 days, during which the
22 insured is covered by the policy and the policy may be
23 declined for any reason.
24 (2) The insured may retain other homeowner's insurance
25 during the underwriting period, subject to the terms of the
26 insurer.
27 Section 1905. Valid reasons to cancel policy.
28 An insurer may not cancel a policy except for one or more of
29 the following specified reasons:
30 (1) Nonpayment of premium.
20240HB2379PN3236 - 5 -
 1 (2) A determination that the insured has concealed a
2 material fact, has made a material allegation contrary to
3 fact or has made a misrepresentation of a material fact and
4 that concealment, allegation or misrepresentation was
5 material to the acceptance of the risk by the insurer.
6 Section 1906. Policy premium increases.
7 Insurers shall provide to the insured a detailed statement of
8 the components of a premium and shall specifically show the
9 amount of a surcharge or other additional amount that is charged
10 as a result of a claim having been made under a homeowner's
11 insurance policy or as a result of any other factors.
12 Section 1907. Proper notification of intention to cancel.
13 A cancellation or refusal to renew by an insurer shall not be
14 effective unless the insurer delivers or mails to the named
15 insured at the address shown in the policy a written notice of
16 the cancellation or refusal to renew. The notice shall:
17 (1) Be in a form acceptable to the commissioner.
18 (2) State the date, not less than 60 days after the date
19 of the mailing or delivery, on which cancellation or refusal
20 to renew shall become effective. If the policy is not renewed
21 or canceled for reasons specified in section 1905(1), the
22 effective date may be 15 days from the date of mailing or
23 delivery.
24 (3) State the specific reasons of the insurer for
25 cancellation or refusal to renew.
26 (4) Advise the insured of his right to request, in
27 writing, within 30 days of the receipt of the notice of
28 cancellation or intention not to renew and of the receipt of
29 the reason or reasons for the cancellation or refusal to
30 renew as stated in the notice of cancellation or of intention
20240HB2379PN3236 - 6 -
 1 not to renew, that the commissioner review the action of the
2 insurer.
3 (5) Advise the insured of the possible eligibility for
4 insurance under the act of July 31, 1968 (P.L.738, No.233),
5 known as The Pennsylvania Fair Plan Act.
6 Section 1908. Exemption from liability.
7 There shall be no liability on the part of and no cause of
8 action of any nature shall arise against the commissioner, any
9 insurer, the authorized representatives, agents and employees of
10 any firm, person or corporation furnishing to the insurer
11 information as to reasons for cancellation or refusal to write
12 or renew under this article. The insurer must furnish the
13 insured the notification required by 15 U.S.C. Ch. 41 Subch. III
14 (relating to credit reporting agencies) when a cancellation or
15 refusal to write or renew occurs.
16 Section 1909. Request for review.
17 (a) Review.--Any insured may, within 30 days of the receipt
18 by the insured of notice of cancellation or notice of intention
19 not to renew under this article, request in writing that the
20 commissioner review the action of the insurer in canceling or
21 refusing to renew the policy of the insured.
22 (b) Notice.--Any applicant for a policy who is refused a
23 policy by an insurer shall be given a written notice of refusal
24 to write by the insurer. The notice shall state the specific
25 reason or reasons of the insurer for refusal to write a policy
26 for the applicant. Within 30 days of the receipt of the notice
27 reasons, the applicant may request in writing that the
28 commissioner review the action of the insurer in refusing to
29 write a policy for the applicant.
30 Section 1910. Review procedure.
20240HB2379PN3236 - 7 -
 1 (a) General rule.--On receipt of a request for review, the
2 commissioner shall notify the insurer that a review has been
3 requested. The commissioner shall review the matter to determine
4 whether the cancellation or refusal to renew or to write was in
5 violation of this article and shall, within 40 days of the
6 receipt of a request, either order the policy written or
7 reinstated or uphold the cancellation or refusal to renew.
8 (b) Policy.--After a review under subsection (a), if the
9 commissioner finds the insurer not to be in violation of this
10 article, the policy shall remain in effect until the date
11 referred to under section 1907(2) or 30 days following the
12 conclusion of the review provided for in subsection (a),
13 whichever is later. Notwithstanding any other provision of law,
14 for review of cancellations under section 1905(1), the policy
15 shall terminate as of the date provided in the notice under
16 section 1907(2) unless the policy is reinstated. Nothing in this
17 subsection shall be construed to prevent the insurer, at the
18 insurer's discretion, from continuing coverage after the initial
19 review period until the commissioner has issued a final order.
20 (c) Order.--After review under subsection (a), if the
21 commissioner finds the insurer to be in violation of this
22 article and the insurer requests a hearing in accordance with
23 subsection (d), the policy shall remain in effect until the
24 commissioner has issued a final order.
25 (d) Hearing request.--If either party disputes the
26 commissioner's findings, both parties shall have the right to a
27 formal hearing. In the event a hearing is requested, the
28 commissioner shall issue notice of the hearing which shall state
29 the time and place for the hearing to be not less than 30 days
30 from the date of notice under this subsection.
20240HB2379PN3236 - 8 -
 1 (e) Appearance.--Upon good cause shown, the commissioner
2 shall permit any person to intervene, appear and be heard at the
3 hearing in person or by counsel.
4 (f) Process.--The commissioner may administer oaths, examine
5 and cross-examine witnesses, receive oral and documentary
6 evidence and subpoena witnesses, compel attendance and require
7 the production of books, papers, records or other documents
8 which the commissioner deems relevant to the hearing. A record
9 shall be kept of all evidence and all proceedings at the
10 hearings.
11 (g) Process.--The insurer shall bear the burden at the
12 hearing to prove that the cancellation or refusal to renew
13 complies with this article. If the insured requested the hearing
14 and fails to appear at the time and place for the hearing, the
15 commissioner may consider a motion to dismiss and may not be
16 compelled to take evidence at the scheduled hearing. In addition
17 to any remedy under subsection (h), the commissioner shall have
18 the authority to order an insurer to cease and desist from acts
19 constituting a violation of this article.
20 (h) Order.--Following a hearing under this section, the
21 commissioner shall issue a written order resolving the factual
22 issues presented at the hearing and stating what remedial
23 action, if any, is required. If the commissioner finds the
24 cancellation or refusal to renew violates this article, the
25 remedial action ordered by the commissioner shall include at
26 least one of the following:
27 (1) The insurer reimburse the insured for any increase
28 in the cost of insurance and any short-term cancellation fees
29 which are incurred.
30 (2) The insurer reinstate the original policy
20240HB2379PN3236 - 9 -
 1 prospectively.
2 (3) If an insurer has elected to continue coverage under
3 this section, the coverage shall remain in full force and
4 effect under the terms of the policy. Reimbursement shall be
5 in the amount incurred by the insured to secure replacement
6 coverage during the pendency of the hearing process, which
7 cost exceeds the cost which would have been incurred had the
8 policy under review remained in effect. The reimbursement
9 shall be based on the difference of the cost of the policies
10 to the extent that the coverage and limits of the replacement
11 coverage does not exceed the original coverage. The insured
12 shall bear the burden to request reimbursement and prove any
13 increase in the cost of insurance. If a prospective
14 reinstatement of the original policy is ordered, the
15 reinstatement shall take effect on the next policy
16 anniversary date unless the insured requests that the
17 reinstatement take effect at an earlier date.
18 (i) Notice.--The commissioner shall send a copy of the order
19 to the parties participating in the hearing.
20 (j) Designee.--All actions which may be performed by the
21 commissioner under this section may be performed by the
22 designated representative of the commissioner.
23 Section 1911. Regulations.
24 The commissioner shall promulgate rules and regulations
25 necessary for the administration of this article. The
26 commissioner may provide for the establishment o