Types of Cases



 

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The Administrative Hearings Office handles cases involving insurance laws and regulations. For most types of cases, formal administrative hearing procedures are used to resolve a dispute. Other case types do not require a formal hearing. The case types received in the hearing office are:

Automobile policy terminations (Act 68)
Homeowner policy terminations (Act 205)
Commercial policy terminations (Act 86)
Assigned Risk Plan policy terminations
Automobile CAT Fund claims
Underground Storage Tank Indemnification Fund (USTIF) claims
Mcare Fund claims
CHIP eligibility reviews
Enforcement cases
License denials
Agency terminations (Act 143)
Consent orders
Consent waivers
Market Conduct investigations
Formal complaints
Form or Rate disapproval
Classification cases
Liquidation claims
Health care
Miscellaneous cases

  Automobile policies (Act 68).  Termination of automobile policies is governed by the Act of June 17, 1998, P.L. 464, No. 68 § 1 (40 P.S. §§ 991.2001-991.2013). A policyholder initially may request that the Insurance Department's Bureau of Consumer Services review a policy termination.  A case begins in the Administrative Hearings Office when either the policyholder or company requests a hearing or appeals from the Bureau's decision.

Homeowner policies (Act 205).  The termination of homeowner policies is restricted by portions of the Unfair Insurance Practices Act, Act of July 22, 1974, P.L. 589, No. 205 (40 P.S. §§ 1171.1-1171.15). The policyholder initially requests review of a policy termination by the Department's Bureau of Consumer Services. A policyholder or company disagreeing with the Bureau's decision may request a hearing.

Commercial policies (Act 86).  Termination of commercial policies is governed by the Act of July 3, 1986, P.L. 396, No. 86 (40 P.S. §§ 3401-3409). Administrative review of company actions for compliance with the statute is conducted by the Department’s Bureau of Consumer Services, which renders a determination following its investigation. The statute does not include the right to a hearing. Accordingly, very few commercial policy appeals are filed in the Administrative Hearings Office. 

Assigned risk plan policies. The Pennsylvania Assigned Risk Plan is authorized by Section 3 of the Act of February 12, 1984, P.L. 26, No. 11, 75 Pa.C.S. § 1741 to assure that automobile insurance would be available conveniently and expeditiously to all individuals who cannot obtain insurance through the voluntary market. The Plan is administered by the Pennsylvania Assigned Risk Plan Governing Committee, which may hear any appeal from an applicant, insured, producer, or insurer on a matter pertaining to the proper administration of the Plan.  The action of the Committee is reviewable through the Department's hearing process.

In addition to disputes concerning assigned risk policies, the Department may have hearings on disciplinary action imposed by the Governing Committee against an assigned risk plan broker.

Auto CAT Fund. The Catastrophic Loss Trust Fund was established in Section 3 of the Motor Vehicle Financial Responsibility Law (MVFRL) (Act of February 12, 1984, P.L. 526, No. 11, as amended by the Act of February 12, 1984, P.L. 53, No.12).  Although these provisions were repealed in December 1988, the catastrophic loss benefits were preserved for eligible claimants suffering the catastrophic loss prior to June 1, 1989 or during a registration year for which the CAT fee was paid. A claimant whose claim against the Fund is denied may request a hearing.

Underground Storage Tank Indemnification Fund (USTIF). The Storage Tank and Spill Prevention Act (Act of July 6, 1989, P.L. 169, No. 32 as amended, 35 P.S. §§ 6021.101-6021.2104) was enacted to prevent the occurrence of storage tank releases, to provide liability for damages sustained within the Commonwealth as a result of a release and to require prompt cleanup and removal of resulting pollution.  The Underground Storage Tank Indemnification Fund was created to make payments to owners, operators and certified installers of underground storage tanks who incur liability for corrective action or for bodily injury or property damage caused by a release from underground storage tanks.  If the Fund denies payment of a claim, the claimant may request a hearing.

Mcare. The Medical Care Availability and Reduction of Error (Mcare) Fund, formerly known as the Professional Liability Catastrophe Loss Fund, provides a layer of professional liability insurance to medical providers. Mcare became part of the Insurance Department on October 1, 2002 pursuant to the Medical Care Availability and Reduction of Error Act, Act of March 20, 2002, P.L. 154, No. 13, 40 P.S. §§ 1303.101-1303.910. Although the Insurance Commissioner adjudicated coverage disputes between 2002 and 2009, currently those cases are heard in the Commonwealth Court, with Administrative Hearings Office hearing officers appointed as hearing examiners for the Court in some cases.

CHIP Eligibility Reviews.  These cases are appeals from the administrative decision that an enrollee or applicant is not entitled to free or subsidized health care pursuant to the Children’s Health Insurance Program.  Originally heard in the hearings office, the appeals are now conducted in the CHIP offices with the hearings office available for overflows.  The appeals are not conducted as formal hearings, but rather as informal telephone factfinding reviews.

Enforcement actions.  The Insurance Department's Bureau of Enforcement through the Office of Chief Counsel brings actions against agents, agencies, other licensees, companies and company officials for violation of insurance laws and regulations.  Hearings are conducted in accordance with the Administrative Agency Law, 2 Pa.C.S. §§ 501-508, under various statutes.

License denial.  An applicant for an insurance license, other license or line of authority denied by the Insurance Department's Bureau of Producer Services may appeal that denial to the Insurance Commissioner through the hearings office.  Hearings are conducted in accordance with the Administrative Agency Law.  2 Pa.C.S. §§ 501-508.

Agency termination.  When a company terminates an agency agreement, the agent may appeal the company's action to the Insurance Department.  These proceedings are conducted as semi-formal reviews of the company's actions.

Consent orders, consent waivers and market conduct examinations.  The Department's Bureau of Enforcement investigates violations of Pennsylvania statutes or regulations as they relate to insurance law, and the investigation may be concluded with one of these documents. These cases are docketed in the hearings office, but almost never involve a hearing unless a party is alleged to have violated the agreement.

Consent order.  This is an agreement, entered as an order, between the Department and individual or entity alleged to have violated insurance statutes or regulations.

Consent waiver.  This is a special type of consent order, agreed between the Department and an individual who may be prohibited by federal law from engaging in the business of insurance because of a prior felony conviction.

Market Conduct Examinations.  Sometimes involving a consent order with an insurance company, market conduct examination reports evaluate compliance with insurance laws and regulations.

Formal complaint.  This is an action involving almost any insurance statute and brought pursuant to 1 Pa. Code §35.9-35.11.

Form or rate disapproval. An insurance company may appeal disapproval of a policy form pursuant to Section 354 of the Insurance Department Act of May 17, 1921, P.L. 682 (40 P.S. § 477b) and request a formal hearing.  Similarly, a company or rating organization has a right to a hearing on a rate disapproval.

Classification appeal.  Pursuant to Section 654 of the Insurance Company Law of 1921, Act of May 17, 1921, P.L. 689, as amended, 40 P.S. §814, an appeal may be made from a decision made by a rating or classification organization.  Most often, these hearings have been appeals by employers disputing the classification of its employees by the Pennsylvania Compensation Rating Bureau or Coal Mine Compensation Rating Bureau.

Liquidation claims.  These hearings are conducted on behalf of the Commonwealth Court as an appointed referee concerning a claim against a company in liquidation.  In these cases, the claimant objects to classification, prioritization or amount of a submitted claim.

Health care (managed care health plans).  These hearings are held pursuant to the Quality Health Care Accountability and Protection Article, Act of June 17, 1998, P.L. 464, No. 68 § 1 (40 P.S. §§ 991.2101-991.2193).  The cases involve appeals from denied or limited benefits under a managed care plan.  The participant first pursues appeals within the managed care plan, then seeks review by the Insurance Department's Bureau of Consumer Services, and finally may request a formal hearing on the plan's actions.

Miscellaneous cases.  Some cases cannot be classified.  They may begin as a petition for declaratory order, by transfer from a court of common pleas or the Commonwealth Court, or an appeal from a Departmental administrative action.  They may involve corporate transactions, interpretation of Department statutes or any number of other substantive laws and regulations.