Pennsylvania State Regulations & NAIC Insurance Law

Licensing

To apply for a Pennsylvania resident producer’s license, you must:

• Be at least 18 years old
• Be a Pennsylvania resident before submitting your application, or maintain the principal place of business in Pennsylvania (40 P.S. § 310.5(a))

Pre-licensing course and exam

Pennsylvania does not require a pre-licensing course: before applying for a license, an individual must pass the insurance producer licensing examination required for the lines of authority sought (40 P.S. § 310.4(a)). Act 142 of 2024 removed the former pre-examination education requirement, effective April 29, 2025.

A passing examination score in Pennsylvania is valid for 1 year from the passing date: an application received with older test results is rejected (31 Pa. Code § 37a.7(c)(2)).

Fingerprints/background check

The Commissioner reviews an applicant’s background before issuing a license, and many states require applicants to submit fingerprints for a state and FBI criminal history check as part of the application. Pennsylvania is one of them: it requires fingerprinting of every applicant for a new resident producer license, which the Insurance Department uses to obtain national criminal history background information from the FBI (Pennsylvania Insurance Department, Initial Insurance Producer Licensing Process).

Controlled business

Controlled business is insurance written on the producer’s own life, property or interests, or on those of the producer’s family, employer or a business the producer controls.

Non-resident license

A producer licensed in another state for the lines of authority sought does not take Pennsylvania’s examination to obtain a Pennsylvania nonresident license (40 P.S. § 310.4(d)(6)). Under the NAIC’s Producer Licensing Model Act, which most states have adopted in some form, a nonresident receives the license if the person:

• Is currently licensed as a resident, and in good standing, in the home state
• Has applied (the home-state application or the Uniform Application) and paid the fees
• Lives in a home state that grants nonresident licenses to residents of this state on the same basis (reciprocity)

Under the same model, a producer who moves to another state files a change of address, with certification from the new home state, within 30 days. Pennsylvania’s own law requires a licensee to notify the Department of a change of address within 30 days (40 P.S. § 310.11(19)). A licensed producer who moves into a state applies for a resident license there within 90 days and does not repeat prelicensing education or the examination for lines already held.

Pennsylvania follows the model: an individual currently licensed as a resident producer in another state may apply for a Pennsylvania nonresident license for the equivalent lines of authority, with an application or an updated copy of the home-state application, proof of the home-state license and the fee, and the Department may deny it if the home state does not award nonresident licenses to Pennsylvania residents on the same basis (40 P.S. § 310.10(a)). A licensed producer who establishes a principal place of residence or business in Pennsylvania applies for the resident license within 90 days (40 P.S. § 310.6a(a)).

Temporary license

Most states allow the insurance regulator to issue a temporary license, without an examination, when one is needed to keep an insurance business serviced. Typical cases are:

• The surviving spouse or personal representative of a producer who dies or becomes disabled, to allow time to sell the business or train new people
• A member or employee of a business entity producer, on the death or disability of its designated producer
• The designee of a producer entering active military service

Under the NAIC’s model act, the regulator may also issue one in any other circumstance where it finds that the public interest will best be served.

The model act also lets the regulator limit what a temporary licensee may do and require a sponsor, a licensed producer or insurer, who takes responsibility for the temporary licensee’s acts.

A Pennsylvania temporary license lasts no more than 180 days and is not transferable, and the Department may impose requirements on the temporary licensee, including requiring a sponsoring insurer and limiting the lines of authority (40 P.S. § 310.9(b)-(c)).

Military service

In Pennsylvania, a licensee who cannot renew on time because of military service or another extenuating circumstance may ask the Department to waive the continuing education for the period the license lapsed and the lapsed license fee; if the Department finds good cause, it grants the waiver and lets the licensee renew (40 P.S. § 310.8(e)).

Renewal and reinstatement

A producer license stays in effect only while the producer renews it on schedule: paying the renewal fee and completing continuing education by the due date.

A Pennsylvania producer license is issued for a period of no more than two years (40 P.S. § 310.7(5)). An individual producer’s license is renewed every two years based on the last day of the producer’s birth month, and the first license period may vary to line up with that cycle (31 Pa. Code § 37a.9(b)(1)).

A producer who misses the deadline and lets the license lapse may be able to reinstate it without retaking the examination.

In Pennsylvania, a producer whose license lapsed may ask the Department to reinstate it within one year of the renewal date, with the renewal form, the fee and proof of all continuing education for the lapsed periods. A request received within 60 days of the lapse reinstates the license retroactively to the date it lapsed; a later one reinstates it from the date of reinstatement; after one year the person must reapply for a license (40 P.S. § 310.8(d)). The lapsed license renewal fee is $165 (40 P.S. § 310.8(f)(3); 31 Pa. Code § 37a.3).

Continuing education

All states, including Pennsylvania, have continuing education (CE) requirements that must be met to renew any major lines (life, health, property, liability) insurance license. In Pennsylvania, a licensee who has only a limited line of authority, and a licensee which is a business entity, are among those the statute exempts from continuing education (40 P.S. § 310.8(c)). A Pennsylvania licensee completes 24 credit hours of approved continuing education for each two-year license period to renew, at least 3 of them on ethics, and may carry forward up to 24 excess hours to the next license period (40 P.S. § 310.8(b)(1)-(2)). The exemptions also include a licensee continuously licensed for a line of authority since before January 1, 1971 (40 P.S. § 310.8(c)(1)). Individuals licensed in Pennsylvania must complete continuing education before renewing their license. The number of hours required is set by state law and published by the state insurance department.

Notice of change of name or address

In Pennsylvania, failing to notify the Department of a change of address, telephone number and email address within 30 days is a prohibited act for a licensee (40 P.S. § 310.11(19)). A licensee also reports to the Department any administrative action taken against it in another jurisdiction, or by another governmental agency in Pennsylvania, within 30 days of the final disposition, and reports criminal charges within 30 days of being charged (40 P.S. § 310.78(a)-(b)).

The model also requires a producer to report to the regulator within 30 days any administrative action taken against the producer in another state or by another government agency, counted from the final disposition, and any criminal prosecution in any jurisdiction, counted from the initial pretrial hearing date; Pennsylvania’s report of criminal charges is due within 30 days of being charged (40 P.S. § 310.78(b)). A producer who does business under any name other than their legal name must notify the regulator before using it.

Company regulations

An insurance company must be authorized by the Pennsylvania Insurance Department to conduct business in Pennsylvania. To receive a certificate of authority, the company applies to the Commissioner and files its charter or articles of incorporation, financial statements showing that it meets the state’s capital and surplus requirements, and the other documents and fees the state requires. A company of another state also files copies of the forms of all policies it proposes to issue in Pennsylvania (40 P.S. § 401).

Capital and surplus requirement

A company authorized to conduct insurance business in Pennsylvania must meet minimum corporate standards. The certificate of authority allows the insurer to conduct business in the state only if it maintains the minimum capital or permanent surplus required. In Pennsylvania, when an insurer fails to meet the required capital and surplus, the Commissioner may, in the Commissioner’s discretion and after written notice, disapprove its request for a certificate of authority or otherwise restrict its authority to do business (40 P.S. § 386.2(b)). The notice states the proposed action, and the company may apply in writing within 30 days for a hearing, which is held within 30 days of its application (40 P.S. § 386.2(b)).

Medigap policies

To reduce confusion about Medicare supplement policies, federal law requires national standardization of Medigap policies. Insurers must offer a limited number of standardized Medigap plans developed by the NAIC.

Currently, the available plans are A, B, C, D, F, G, K, L, M, and N. Plans E, H, I, and J have been eliminated.

In addition, Plans C and F are not available to individuals who became newly eligible for Medicare on or after January 1, 2020.

Plan A includes the “core” benefits (Parts A and B co-payments, 365 additional days of hospitalization, and the first 3 pints of blood). Its core benefits also include the Part A hospice care coinsurance or copayment. If an insurer sells any Medigap policies in the state, it must offer Plan A.

A Buyer’s Guide and an Outline of Coverage are delivered at the time of application, and the issuer obtains an acknowledgment of receipt; a direct response issuer delivers the Guide on request, and no later than when the policy is delivered (31 Pa. Code § 89.783(a)(6), (d)(1)).

Duties of the Insurance Commissioner

The Pennsylvania Insurance Commissioner is a state executive position in the Pennsylvania government. The Commissioner is the chief executive of the Pennsylvania Insurance Department, which regulates insurance companies operating in Pennsylvania. The Commissioner is appointed by the Governor. The appointment requires the consent of a majority of the members elected to the Senate (71 P.S. § 67.1(d)(1)).

The Commissioner is responsible for establishing and enforcing regulations in the Pennsylvania insurance market in a manner that protects consumers and encourages economic development.

Those duties include:

• Investigate all claims and complaints of legal violations relating to insurance.

• If the Commissioner finds that laws have been violated, the findings and supporting documents may be referred for criminal prosecution.

• Monitor transactions of all companies including domestic, foreign, and alien insurance companies.

• Audit the books and records of any resident producer as frequently as necessary. Under the NAIC’s examination model, the regulator may examine any person subject to its authority, nonresident producers included, as often as it considers appropriate.

• Collect all fees associated with producers and insurers.

• Determine and administer fines associated with violations for insurers and producers.

• Issue reports pertaining to the suspension and revocation of licenses of producers and certificates of authority for insurers.

• Approve documentation used by insurance companies such as forms and rates.

Sidenote

Know this...

The Commissioner does not have the authority to arrest, issue injunctions, or sentence jail time. The Commissioner may, though, bring an action in court for an injunction to restrain a violation (40 P.S. § 310.92). The Commissioner may refer illegal activity for criminal prosecution.

Suspend, revoke or non-renew

The Commissioner has the authority to suspend, revoke, or refuse to renew a license for:

• Providing false information on the application for an insurance license.

• Providing incorrect, misleading, incomplete or false information to the Department in a license application (40 P.S. § 310.11(1)).

• Being found guilty of a violation or the noncompliance of insurance regulations and laws…

• Committing fraud while attempting to obtain an insurance license.

• Improperly withholding, misappropriating or converting any money or property received in the course of doing insurance business. In Pennsylvania, a producer holds all funds received or collected as a producer in a fiduciary capacity and may not mingle them with the producer’s own funds without the express consent of the insurer on whose behalf they were received (40 P.S. § 310.96).

• Providing false information in reference to the terms and conditions of an insurance contract.

• Having been convicted of a felony. Pennsylvania’s grounds are broader: they include committing a felony or its equivalent, and a misdemeanor involving the misuse or theft of another person’s money or property (40 P.S. § 310.11(14)-(15)).

• Having admitted or been found to have committed any insurance unfair trade practice or fraud.

• Having engaged in activities of a fraudulent nature which allowed the person to involve themselves in dishonest, coercive, untrustworthy, and financially irresponsible practices.

• Having had a prior insurance license revoked or suspended in a state other than Pennsylvania. Pennsylvania’s ground also covers any insurance producer or other financial services license denied, suspended or revoked by a governmental entity (40 P.S. § 310.11(8)).

• Using another person’s identity and forging their name on an insurance application.

• Being found guilty of using unethical practices or cheating on an examination for an insurance license.

Cease and desist

If the Commissioner finds that a producer has violated the state’s insurance laws, the Commissioner may order the producer to cease and desist. A cease and desist order does not suspend or revoke the recipient’s registration, but it does require the recipient to stop or limit the activity addressed in the order.

Hearing and penalties

A person facing action by the Commissioner is entitled to notice and an opportunity for a hearing, within time limits set by Pennsylvania law, and may ask a court to review the final order.

In Pennsylvania the hearing comes first: the Department notifies the person of the alleged violation and fixes a hearing at least ten days later, and penalties, including a cease and desist order, follow only after the hearing or the person’s failure to appear (40 P.S. § 310.91(a), (d)). For an unfair insurance practice, the Commissioner sends notice of the violation by certified mail and sets a hearing not less than 30 days from the date of the notice (40 P.S. § 1171.8(a)).

A violation of the insurance laws can bring a civil penalty in addition to action against a license. State law sets the maximum, usually per violation and often with a cap on the total, and some laws set a higher tier for a violation that was knowing or flagrant: in Pennsylvania the unfair insurance practices law does, and the producer licensing law does not. Some violations are also crimes.

For a violation of Pennsylvania’s producer licensing law, the Commissioner may impose a civil penalty of up to $5,000 for each action in violation, along with action on the license or a cease and desist order (40 P.S. § 310.91(d)). For an unfair insurance practice, a court, in an action the Commissioner files, may impose up to $5,000 for each violation the person knew or reasonably should have known was one, up to $50,000 in all in any six-month period; otherwise up to $1,000 for each violation, up to $10,000 in any six-month period; and up to $10,000 for each violation of the Commissioner’s cease and desist order while it is in effect (40 P.S. § 1171.11).

Unfair claims settlement practices

Under the NAIC’s model act, these practices are violations when committed flagrantly and in conscious disregard of the law, or often enough to indicate a general business practice. Pennsylvania’s statute reaches the claim settlement practices it lists when committed or performed with such frequency as to indicate a business practice (40 P.S. § 1171.5(a)(10)).

• Unreasonably delaying the investigation or payment of claims by requiring both a formal proof of loss form and subsequent verification that would result in duplication of information and verification appearing in the formal proof of loss form.

• Failing, in the case of claims denials or offers of compromise settlement, to promptly provide a reasonable and accurate explanation of the basis for such actions.

• Refusing to pay claims without conducting a reasonable investigation.

• Attempting to settle or compromise claims on the basis of an application which was altered without notice to or knowledge or consent of the insured (40 P.S. § 1171.5(a)(10)(ix)).

• Denying a claim without conducting a thorough investigation.

• Attempting to settle or settling a claim for less than the amount a reasonable person would believe the insured or beneficiary was entitled to by reference to written or printed advertising material accompanying or made part of an application.

Policy forms

Insurers file their policy forms with the Commissioner.

Pennsylvania requires approval before use: an insurer may not issue a policy, contract or certificate, including life, homeowners and personal auto insurance, until its form has been submitted to and formally approved by the Insurance Commissioner. A filed form is deemed approved 30 days after filing unless approved or disapproved earlier, and the Commissioner may extend that period by another 30 days by written notice (40 P.S. § 477b). Accident and health forms are no longer approved under that section; they are filed under the Accident and Health Filing Reform Act no less than 45 days before their effective dates (40 P.S. § 3801.303(a)). Most commercial property and casualty forms are filed instead under the Property and Casualty Filing Reform Act, which supersedes § 477b where the two conflict: forms for small commercial risks are filed at least 45 days before their effective date, and forms for large commercial risks need not be filed (Insurance Company Law §§ 502-A(5), 504-A, 505-A(c)-(d)).

Under the usual conformity rule, which many states’ insurance codes write into law, a policy provision that conflicts with state law does not make the policy invalid: the policy is read as amended to conform to the law.

An individual health policy may also carry the optional uniform provision “Conformity with State Statutes”: a provision that, on the policy’s effective date, conflicts with the statutes of the state where the insured resides is amended to conform to their minimum requirements.

The interest rate an insurer may charge on a life insurance policy loan is also limited by state law.

Record maintenance

A producer keeps records of each transaction and makes them available for the Commissioner’s inspection.

Pennsylvania requires a licensee to keep all documents pertaining to its transaction of the business of insurance for 7 years from the final execution or creation of the record, and lets it keep them electronically if they can be promptly produced when the Department asks (31 Pa. Code § 37a.25(a), (c)).

Fraudulent producer representation

In Pennsylvania, a person may sell, solicit or negotiate insurance only if licensed as an insurance producer for the line of authority under which the contract is issued (40 P.S. § 310.3(a)), and a producer who represents to the public that they are licensed for a line they do not hold makes an untrue statement about their insurance business, an unfair insurance practice (40 P.S. § 1171.5(a)(2)).

Any means of public communication is included, such as advertisements, letterheads, circulars, business cards, and other methods of representation.

A producer who conducts business in Pennsylvania in a line of insurance for which they are not licensed violates the insurance laws, a prohibited act (40 P.S. § 310.11(2)), and after a hearing the Commissioner may deny, suspend, refuse to renew or revoke any license the producer holds (40 P.S. § 310.91(d)(1)).

Misrepresentation

• Misrepresentation involving the creation or distribution of policies, quotes, and illustrations designed to provide inaccurate information about the terms and conditions of a policy is prohibited. Under the NAIC’s model act, any estimate, illustration or statement that misrepresents a policy’s benefits, advantages, conditions or terms is an unfair trade practice when committed flagrantly and in conscious disregard of the law, or often enough to indicate a general business practice. Pennsylvania’s provision reaches any estimate, illustration, circular, statement or sales presentation that misrepresents the benefits, advantages, conditions or terms of any insurance policy (40 P.S. § 1171.5(a)(1)(i)).

• Providing inaccurate or incomplete information or comparisons regarding the benefits of a policy is an example of misrepresentation.

• Providing inaccurate or incomplete information for the purpose of inducing, or tending to induce, the lapse, exchange, conversion, forfeiture, or surrender of a policy is a violation as well (twisting).

False advertising

Making, publishing or circulating an advertisement, announcement or statement about the business of insurance that is untrue, deceptive or misleading is an unfair trade practice under state law, based on the NAIC’s model act. The medium does not matter: the rule reaches newspapers, magazines, radio and television, and also notices, circulars, pamphlets, letters, posters and any other way of placing the statement before the public. Under the model act, such a statement is an unfair trade practice when committed flagrantly and in conscious disregard of the law, or often enough to indicate a general business practice. Some state laws adopt this condition, and others reach a single such statement.

Defamation

Defamation of an insurer is an unfair trade practice under state law, based on the NAIC’s model act: making, publishing or circulating an oral or written statement that is false, or maliciously critical of or derogatory to the financial condition of an insurer, and that is calculated to injure such insurer. Some states’ laws reach further, to a statement calculated to injure any person engaged in the business of insurance. Spreading an untrue rumor that a competing insurer is about to fail is the classic example.

Boycott, coercion and intimidation

Entering into an agreement to commit, or by concerted action committing, any act of boycott, coercion or intimidation that results or tends to result in unreasonable restraint of, or monopoly in, the business of insurance is prohibited.

False financial statements

Any licensed producer who makes false statements containing inaccurate material facts or false statements on an application for insurance is in violation of the state’s unfair trade practices law. The rule is not limited to licensed producers: under the NAIC’s model act, it is an unfair trade practice for an insurer or any person engaged in the business of insurance to make false or fraudulent statements or representations on or relative to an application for a policy, for the purpose of obtaining a fee, commission, money or other benefit from any provider or individual person. Pennsylvania’s provision has the same purpose element: false or fraudulent statements or representations on or relative to an application, made to obtain a fee, commission, money or other benefit from any insurer, agent, broker or individual (40 P.S. § 1171.5(a)(12)).

Illegal inducements

Offering anything of value not specified in the policy (money, a service, a favor or a gift) as an inducement to buy insurance is prohibited unless state law expressly allows it, and any agreement made as part of the sale must be written into the policy.

Pennsylvania prohibits rebating: except as otherwise expressly provided by law, it is an unfair or deceptive act to pay, allow or give, or offer to, directly or indirectly, as an inducement to an insurance policy, a rebate of premiums, a special favor or advantage in its dividends or other benefits, or any valuable consideration or inducement not specified in the policy (40 Pa.C.S. § 5102(a)(2)). The law expressly permits some practices, among them value-added products or services that relate to the coverage and meet its conditions (§ 5102(b)(5)) and noncash gifts within its limit (§ 5102(c)).

The NAIC’s model act lets producers and insurers give customers non-cash gifts, meals or charitable donations up to an amount the state considers reasonable, as long as the gift is not conditioned on buying or renewing a policy and is offered without unfair discrimination. Pennsylvania sets the amount by statute: noncash gifts, items or services, including meals or a charitable donation on the customer’s behalf, may total no more than $125 a year in the aggregate, an amount the Insurance Commissioner may raise by notice in the Pennsylvania Bulletin, and may not be contingent on buying or keeping insurance (40 Pa.C.S. § 5102(c)(1)). Gifts to commercial or institutional customers must be reasonable in comparison to the premium (§ 5102(c)(2)).

Unfair discrimination

Unfair discrimination is treating people or risks that present the same hazard differently. The NAIC’s model act, on which state unfair trade practices laws are based, prohibits:

• Unfair discrimination between individuals of the same class and equal expectation of life in life insurance and annuity rates, dividends, benefits or terms
• Unfair discrimination between individuals of the same class and essentially the same hazard in health insurance premiums, benefits or terms
• Refusing, limiting or canceling coverage because of a person’s sex, marital status, race, religion or national origin
• In property and casualty insurance, refusing or limiting coverage solely because of a risk’s geographic location, unless sound underwriting and actuarial principles justify it, or solely because the applicant or insured is physically or mentally impaired

Many states also expressly forbid refusing or limiting coverage solely because a person is blind or partially blind. Pennsylvania’s own list bars unfair discrimination in underwriting standards or eligibility, between individuals of the same class and essentially the same hazard, by reason of race, religion, nationality or ethnic group, age, sex, family size, occupation, place of residence or marital status (40 P.S. § 1171.5(a)(7)(iii)).

Errors & Omissions

Errors & Omissions (E&O) insurance is a type of professional liability insurance that protects insurance agents if they are sued for negligent performance of their duties. E&O covers negligence and unintentional mistakes that cause financial harm to clients. It does not cover intentional misconduct, criminal acts, or regulatory fines.

Children covered as dependents

Under the Affordable Care Act, a plan that offers dependent coverage must make it available to an adult child until age 26, whether or not the child is married, a student or financially dependent on the parent.

Pennsylvania requires health insurance policies that pay on an expense-incurred basis to cover a newborn child of the insured from the moment of birth, including care and treatment of congenital defects, birth abnormalities, prematurity and routine nursery care; if a specific premium is required to cover the child, the policy may require notice of the birth and payment within 31 days of birth for the coverage to continue beyond that period (40 P.S. §§ 753.1-753.3). A group accident and sickness policy may not end coverage at its age limit for an unmarried child covered before age 19 who is incapable of self-sustaining employment because of an intellectual or physical disability that began before 19 and who is chiefly dependent on the employee or member, if proof of the incapacity is submitted within 31 days of the child reaching the age limit (40 P.S. § 756.2(a)(6)). An individual accident and health policy carries the same protection, for a child chiefly dependent on the policyholder, if the policyholder submits proof of the incapacity within 31 days of the child reaching the limiting age (40 P.S. § 752(A)(9)).

Rebating

Pennsylvania licensed producers are prohibited from directly or indirectly giving any refund, discount, favor, or credit to reduce premiums to induce the purchase of insurance.

Sidenote

Know this...

To “solicit” or “negotiate” insurance implies that the person is licensed.

Sharing commission

The splitting or sharing of commissions with a licensed producer is allowed. In Pennsylvania, an insurance entity or licensee may pay a commission, brokerage fee, service fee or other compensation to a licensee for selling, soliciting or negotiating a contract of insurance, and may not pay one to a person who is not a licensee for activities related to the sale, solicitation or negotiation of a contract (40 P.S. § 310.72(a)). It may still pay a renewal or other deferred commission to a person who was a licensee at the time of the sale, and a fee to an unlicensed person for referring prospects to a licensee if that person does not discuss the specific terms and conditions of a contract; for insurance primarily for personal, family or household use, the referral fee may be no more than a one-time, nominal fee of a fixed dollar amount that does not depend on whether the referral results in a sale (40 P.S. § 310.72(b)).

Twisting

Providing false information, about a policy or about a competitor company’s financial condition, to induce the lapse, forfeiture, exchange, conversion or surrender of an existing policy is a violation of the law. Any written or oral statements used to induce the lapse, termination, exchange, or surrender of an insurance contract based on inaccurate information are prohibited.

Under the NAIC’s model act, twisting is a misrepresentation made to induce the lapse, forfeiture, exchange, conversion or surrender of a policy; the same provision also reaches a misrepresentation made to induce a purchase, and counts an intentional misquote of premium rate made for any of these purposes as a misrepresentation. A false or maliciously critical statement about a competing insurer’s finances, made to injure it, is defamation. In Pennsylvania, twisting is a misrepresentation made to induce the lapse, forfeiture, exchange, conversion or surrender of a policy (40 P.S. § 1171.5(a)(1)(vi)), and a misleading statement or misrepresentation about the financial condition of any person is a separate violation (§ 1171.5(a)(1)(iv)).

Unfair marketing practices

The Insurance Department is responsible for establishing minimum standards for the full and fair disclosure of policy content. The Department also requires standardization and simplification of the terms used to describe insurance coverage. Advertising may not involve the following:

• Any statement or implication that the company, its financial condition, the payment of its claims or its policies are approved, endorsed or accredited by any division or agency of the Commonwealth or the United States Government (31 Pa. Code § 51.28(d)).

• Any statement or implication that a company or a policy is approved or endorsed by an individual, group, society, association or other organization, unless that is the fact and any proprietary relationship between the organization and the insurer is disclosed (31 Pa. Code § 51.31(d)).

• A recommendation by a commercial rating system that does not clearly indicate its purpose and the limits of its scope (31 Pa. Code § 51.28(e)).

• Any statement about claims, such as how quickly they are paid, that is untruthful or misleading in fact or in implication (31 Pa. Code § 51.21(b)); a statement about the dollar amounts of claims paid, or similar statistics, may be used only if it accurately reflects the relevant facts (31 Pa. Code § 51.32(a)).

Gramm-Leach Bliley Act (GLBA)

This law repealed the parts of the Glass-Steagall Act of 1933 that kept commercial banks and securities firms apart, and allowed the consolidation of commercial banks, investment institutions and insurance companies. GLBA established a framework of responsibilities of federal and state regulators for these financial industries. It permits financial services companies to merge and engage in a variety of new business activities, including insurance, while attempting to address the regulatory issues raised by such combinations.

McCarran-Ferguson Act

Federal law signed in 1945 in which Congress declared that the insurance industry would be regulated at the state level. Grants insurers a limited exemption from federal antitrust legislation. Since 2021 the exemption does not cover the business of health insurance, apart from narrow activities such as sharing historical loss data (15 U.S.C. § 1013(c)).

National Association of Insurance Commissioners (NAIC)

The U.S. standard-setting and regulatory support organization is created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally. NAIC members, together with the central resources of the NAIC, form the national system of state-based insurance regulation in the U.S.

Fair Credit Reporting Act

The Fair Credit Reporting Act (FCRA, 15 U.S.C. 1681) regulates consumer reporting agencies and the use of consumer reports, such as credit reports, MIB records and investigative reports, including in insurance underwriting.

• When an insurer requests an investigative consumer report, it must disclose that to the consumer within 3 days of the request
• When an insurer takes adverse action based on a consumer report, it must notify the consumer and identify the reporting agency. The consumer then has 60 days to request a free copy of the report and may dispute inaccurate information

Privacy Act of 1974

The federal Privacy Act of 1974 governs how federal agencies handle personal information. It does not apply to private insurers. An insurer’s use of an applicant’s personal information is governed by the FCRA, the Gramm-Leach-Bliley Act and state insurance privacy law.

In states that adopted the NAIC’s Insurance Information and Privacy Protection Model Act, an authorization to collect personal information signed with an application is valid for no more than 30 months for life, health or disability insurance and one year for property or casualty insurance.

Under the same model act, a person told of an adverse underwriting decision may ask in writing, within 90 business days of the notice, for the specific reasons for it, which must be given within 21 business days of the request.

Telemarketing

The National Do Not Call Registry is a list of telephone numbers whose owners do not want to receive telemarketing calls. Telemarketers may not call registered numbers without the person’s permission or an established business relationship, and unsolicited sales calls:

• May be made only between 8 a.m. and 9 p.m. in the recipient’s local time
• Must give the caller’s name, the name of the company the call is made for, and a telephone number or address at which that company can be contacted

CAN-SPAM

A commercial email must:

• Be identified clearly as an advertisement
• Carry accurate header information and a subject line that is not deceptive
• Include the sender’s valid physical postal address
• Offer a way to opt out, and the sender must honor an opt-out within 10 business days

Medical assistance (MA)

States use different names for their Medicaid programs. In Pennsylvania, Medicaid is called Medical Assistance (MA). For exam purposes, Medical Assistance (MA) and Medicaid are interchangeable terms.

Medical Assistance (MA) is a state-administered health care program for those in financial need, funded by federal and state money.