LEG REG REVIEW 2014, 19th Issue July 14, 2014

LEG REG REVIEW is a periodic newsletter produced by PHILLIPS ASSOCIATES, a professional lobbying and consultant firm located near the State Capitol.  It contains news on the legislative and regulatory scene in Pennsylvania that may be of interest to the Insurance and Business Communities.  It is a free member benefit for those who are members of the Pennsylvania Association of Health Underwriters (PAHU).  Subscription information may be obtained by contacting PHILLIPS ASSOCIATES at 717/728-1217 FAX 717/232-7005 or e-mail to xenobun@aol.com.  Please email jtrout2792@aol.com supplying both your name and e-mail address if you wish to be removed from or added to this list.



On July 10, Governor Corbett signed State Budget House Bill 2328 into law.  FY 2014-15 started July 1, 2014 and includes $ 29.1 billion in spending.  The Governor challenged two powerful interests in his press conference explaining his decision to sign the Budget into law.  First was the General Assembly which he castigated for not passing pension reform.  To show his displeasure, he vetoed some $65 million in funds for the General Assembly in the Budget, saying that it could come from its reserves.  He also left open the prospect of a special session of the General Assembly where he could force the pension issue. The second group he took on was the Philadelphia’s teachers’ union.  Here, he urged passage of legislation permitting an additional cigarette tax for Philadelphians but said that everyone was contributing to the future of Philadelphia’s school system except for the teachers who would not even contribute to their own health insurance benefits — one of only two districts where the district pays 100% of the premiums.


The next move occurs August 4 when the House comes back into Harrisburg to move Senate-passed legislation regarding the Philadelphia cigarette tax.  The Senate does not plan to come back to Harrisburg until September.  A line item summary of the FY 2014-15 State Budget is found at https://www.budget.state.pa.us/portal/server.pt/community/current_and_proposed_commonwealth_budgets/4566



Controversy surrounding the arrival of ride-sharing (also known as transportation networking companies) entities Uber and Lyft shows no signs of abetting after a hearing convened by the House Insurance Committee June 23 which pitted them against traditional insurance interests as well as the trial lawyers.  At issue is whether there is adequate insurance on the vehicles and drivers using the service where consumers use their smart phones to attract drivers which are not credentialed as livery drivers.  The ride share companies require that accident claims go through the driver’s personal auto policy first.  After being declined, the ride-sharing company’s surplus lines carrier then responds.  Proponents argue that this is new social media commerce and that traditional interests such as taxi companies feel threatened.  Interestingly, Yellow Cabs in Pittsburgh started Yellow X to compete with the new ride-sharing companies.  Some developments:

–          The PA Public Utility Commission (PUC) issued a cease and desist order to Uber and Lyft.

–          Rep. Erin Molchany (D-Allegheny) sponsored House Resolution 947 on July 9 urging the PUC to approve ride-sharing companies’ application for an experimental license

–          Senator Wayne Fontana (D-Allegheny) introduced Senate Bill 1457 (text unavailable yet on General Assembly web site) to provide a regulatory framework by which the PUC could regulate “another option under which transportation network companies may operate”.  SB 1457 is supported by the PUC.



The Insurance Fraud Prevention Authority (IFPA) named Thomas Donahue III to the position of executive director, replacing Ralph Burnham who has retired.  Donahue has a detailed background in insurance fraud investigation with the Special Investigative Units (SIUs) for many major carriers doing business in PA including Nationwide, AAA Mid-Atlantic Insurance Group, Unitrim, and Kemper.  He holds the professional designations of Fraud Claim Law Specialist and Certified Insurance Fraud Investigator. A graduate of St. Joseph’s University, he is a native of DelawareCounty.




  • House Bill 1574 (Killion-R-Delaware) regarding for HMOs to operate as LLCs was signed into law by Governor Corbett July 2 as Act 96 of 2014.
  • House Bill 3903 (Murt-R-Montgomery) to change the name of the Department of Public Welfare (DPW) to the Department of Human Services was passed by the Senate July 8 49-0 and is now in the House Rules Committee.
  • House Bill 1846 (Quinn-R-Bucks) amends the Workers’ Compensation schedule of reimbursements for prescriptions to close a perceived loophole where doctors will be required to use the original manufacturer’s National Drug Code number.  It earlier passed the House and was reported out by the Senate Labor & Industry Committee July 1.
  • House Bill 2353 (Evankovich-R-Allegheny) brings parity between Federal and state law regarding the activities of the Federal Home Loan Bank (FHLB) being a secured creditor to insurance companies. It passed the House July 1 by a 202-0 vote and is now in the Senate Banking & Insurance Committee.
  • Senate Bill 1001 (Folmer-R-Lebanon) was signed into law as Act 119 of 2014 by Governor Corbett.  Among other things, it eliminates the requirement that those seeking to become notaries be approved by their state senator and requires a criminal background check for would-be notaries.
  • Senate Bill 1422 (Tomlinson-R-Bucks) clarifies the legal liability if an “innocent merger successor company” inherits asbestos-related claims from the previous owner.  It was signed into law by Governor Corbett as Act 112 of 2014 on July 2.  Act 112 limits the liability to “the fair market value of the total gross assets of the transferor as of the time of the merger or consolidation with the successor business entity.”



National Flood Insurance Program (NFIP) has produced a summary of who can expect refunds after passage of the 2014 legislation terminating some provisions of the Biggert-Waters 2012 law.  For example, a pre-FIRM policy in zones A, D or V which received a 25%-plus premium increase may receive a one-time refund.  A premium increase for a pre-FIRM non-primary residence will not be refunded.  It will continue to increase by 25% per year until it reaches full-risk rates.  Details: www.fema.gov/flood-insurance-reform.   No refunds under $6.00 will be awarded per NFIP July 7, 2014 Notice W-14037  https://www.nfipiservice.com/Stakeholder/pdf/bulletin/w-14037.PDF  Those interested in seeing the detailed explanations might consult



In addition, NFIP announced a 24/7 tutorial on the June 2014 Manual Changes including those mandated by the 2014 Homeowner Flood Insurance Affordability Act.  Details: nfiptraininginfo@h2opartnersusa.com  1 (800) 427-4661



The centers for Medicare & Medicaid Services (CMS) announced agents-only webinar listing how agents and brokers may participate in marketing the federally-facilitated marketplace (exchange) for plan year 2015 (open enrollment November 15, 2014).  It will be held July 15 for SHOP from 1:00 – 2:00 p.m. and on July 22 from 22 from 3:00 – 4:30 pm and is to include registering as an exchange agent/broker, training requirements prior to assisting consumers.  Details: https://www.REGTAP.info   Those unable to participate in the webinars might wish to review a July 8 power point presentation.  https://www.regtap.info/uploads/library/AB_slides_070814_5CR_071014.pdf



 In Er ie, Warren, Lancaster and Horsham.  Details: Joan Troutman 717/732-7255

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