(a) Study.-- The Insurance Department shall commence a study of the use of a single carrier for private passenger motor vehicle insurance in cities of the first class. The term "single carrier" includes a private insurance company or a public authority or agency specifically created for the implementation of this section. Upon completion, the study shall be delivered to the Majority and Minority Leaders of the Senate and the House of Representatives. The study shall include, at a minimum, the following components: (1) An assessment of the number of uninsured vehicles in cities of the first class. (2) An assessment of the number of insured vehicles in cities of the first class. (3) An analysis of sources of private passenger motor vehicle insurance, by company, for vehicles in cities of the first class. The analysis shall include a determination of the number of vehicles insured in cities of the first class in both the voluntary market and the Assigned Risk Plan by each insurance carrier licensed to provide private passenger motor vehicle insurance in this Commonwealth. (4) An analysis of the costs to motorists to insure a vehicle in cities of the first class in the voluntary market and through the Assigned Risk Plan. (5) An assessment of the impact of "take-out" provisions on the voluntary market place in cities of the first class. (6) A determination as to the number of lawsuits filed for bodily injury claims; the amount and type of damages requested in such lawsuits; the percentage of claims settled before court and the amount of settlement; the percentage of lawsuits decided by the court and the amount of damages awarded; and the fees charged by lawyers for representing claims. (7) An assessment of the frequency, type and amount of physical damage claims and first party medical payments. (8) A determination as to whether the use of a single carrier in cities of the first class would have a positive financial impact on all motorists in such cities and in this Commonwealth. Such determination shall include an analysis of the use of a public authority or agency as the single carrier and of its potential for providing lower rates when compared to use of a private insurance company as a single carrier. In addition, the determination shall include an analysis of the single carrier program when voluntary participation in the program is permitted in comparison to the benefits of mandatory participation. (9) A legal opinion as to whether the use of a single carrier in cities of the first class is permissible under the Constitution and laws of the Commonwealth. (b) Cooperation by insurance companies.-- Insurance companies licensed in this Commonwealth to write policies of private passenger motor vehicle insurance coverage shall cooperate with the Insurance Department study as described in subsection (a). Cooperation shall include, but not be limited to, the provision of information by insurance companies within reasonable time frames as requested by the department, if the information is available, to be used to address the various components of the study described in subsection (a). Such information may be used by the department only for purposes of this study. (c) Recommendations and implementation.-- If the Insurance Commissioner concludes after the completion of the study that a single carrier in cities of the first class will improve the availability and affordability of private passenger motor vehicle insurance in such cities and in this Commonwealth, the Insurance Department may recommend implementing legislation to the General Assembly. If the General Assembly enacts legislation to implement a Single Carrier Insurance Program, the department shall publish a request for proposals to operate the program. The request for proposal process shall include a procedure for the prequalification of bidders based on financial ability to administer the program. Any contract signed by the department must include the following provisions: (1) Participation in the program is voluntary by motorists living in cities of the first class unless legislation has been enacted subsequent to this act specifically providing for mandatory participation. (2) All drivers, except those determined to be ineligible as defined in subsection (d), shall be afforded the opportunity to purchase private passenger motor vehicle insurance coverage through the program. (3) Preferred provider arrangements or a fee schedule may be developed in the program with service providers for medical benefits; such arrangements shall be accessible to the insureds. (4) For physical damage repair or replacement, the program may provide for a fee schedule or other method to contain costs, as well as a minimum deductible higher than that provided for in 75 Pa.C.S. Ch. 17 (relating to financial responsibility), but in no case may the minimum deductible be greater than $1,000. (5) Antifraud mechanisms may be established, including the inspection of physical damage claims, investigation of suspicious claims and case management for selected medical services. (6) A cancellation clause permitting the single carrier to cancel the contract should enrollment in the program be inadequate. (7) Rates charged in the program shall be lower than rates available in the voluntary market and shall be included in the contract and shall be valid for a period of not less than two years. Rate increases after this period shall be subject to approval as provided in the act of June 11, 1947 (P.L.538, No.246), known as The Casualty and Surety Rate Regulatory Act. (d) Definition of "ineligible driver".-- For purposes of subsection (c), the term "ineligible driver" shall mean a person who meets at least one of the following criteria: (1) The person has, within five years of the date of application for insurance, been convicted of a violation of: (i) 75 Pa.C.S. § 3731 (relating to driving under the influence of alcohol or a controlled substance); (ii) 18 Pa.C.S. § 4117 (relating to motor vehicle insurance fraud); or (iii) any felony involving the use of a motor vehicle. (2) The person has previously been insured under a motor vehicle insurance policy and has made more than one claim under an insurance policy, within 36 months of the date of application for insurance under this section, arising out of an accident where the insured was found to be substantially at fault, that is, more than 50%, and where a payment was made by the insurer that exceeded 50% of the annual premium for the policy of insurance. (3) The person's operating privilege has been suspended or revoked within the preceding 36-month period. (4) The person's driving record shows six or more points assessed under 75 Pa.C.S. § 1535 (relating to schedule of convictions and points) for violations that occurred within 36 months of the date of application for insurance under this section. (e) Protection of insureds.-- Insureds covered by the single carrier shall be afforded all protections relating to policy cancellations, nonrenewals and refusals to write, as provided by law. 1990, MARCH 13, P.L.69, NO.14
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