Guidelines on Insurer Plans of Withdrawal & Transition
When an insurer is seeking to change its business profile within the Commonwealth by withdrawing, transitioning business to an affiliated or non-affiliated insurer, or transitioning policyholders from one product to another, the Department of Insurance requests a Plan of Withdrawal/Transition to assist with public inquiries and provide an assurance of statutory compliance.
When is a Plan of Withdrawal/Transition needed?
A Plan of Withdrawal/Transition should be submitted under any of the following circumstances:
Withdrawal
| The insurer intends to discontinue the issuance of a plan/product and/or book of business, at the end of the policy term, without offering alternative coverage to the policyholders. |
| The insurer does not intend to offer renewal to a block(s) of insurance business for a specific reason(s). |
Transition
| The insurer intends to discontinue the issuance of a plan/product and/or book of business, at the end of a policy term, and transition the business to an affiliated or non-affiliated insurer.
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The insurer intends to discontinue the issuance of a plan/product and/or book of business, at the end of a policy term, triggering a nonrenewal notice, with a transition to replacement coverage or reduced coverage that imposes caps, limits, exclusions, etc.
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For what line(s) of insurance should an insurer submit a Plan of Withdrawal/Transition?
There are specific notice requirements for some lines of business, but a Plan of Withdrawal/Transition is useful for all lines of coverage to assist with public inquiries and provide an assurance of statutory compliance.
When should an insurer submit a Plan of Withdrawal/Transition?
The insurer is asked to submit the plan of withdrawal/transition to the Department prior to the commencement of any withdrawal or transition activity.
In some instances, there are more specific guidelines that health insurers must follow. For example, federal law requires health insurers to provide 180-day notice for market withdrawals and a 90-day notice for product withdrawals (these guidelines may be subject to safe harbors from enforcement and insurers should consult CCIIO for the latest guidance). The proposed notices should be submitted in advance for Department review.
What should the insurer include in a Plan of Withdrawal/Transition?
Be prepared to address the following items in your submission:
- Withdrawal or transition details
- Impact assessment
- Attestation (to include the contact information of the authorized company representative submitting the attestation on behalf of the insurer)
- Withdrawal or transition communications
How does a transition differ from a withdrawal?
A transition occurs when an insurer is withdrawing its plan/product and/or book(s) of business from the Commonwealth, triggering a nonrenewal notice, but with the intent to replace existing coverage with benefits that are reduced. Additional details within the submission may be needed to demonstrate compliance with the statute(s) and regulation(s) governing the nonrenewal of certain coverages in the Commonwealth. A transition also occurs when an insurer intends to transition business to an affiliated or non-affiliated insurer.
What additional details are needed for a transition?
The Plan of Withdrawal/Transition should include:
- Benefit or coverage change details
- Examples of the nonrenewal notice(s)
- Premium impacts, including a visual reference tool, such as a frequency distribution or histogram outlining the policyholder impact(s)
- SERFF filing number(s) for the transition product(s)
What are the primary laws applicable to this process?
*Other laws may also apply
Definition of Renewal, to Renew, or Nonrenewal
| Private Passenger Automobile Insurance
40 P.S. § 991.2001
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Commercial Property and Casualty Risk Insurance
31 Pa. Code § 113.81
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Major Medical Health Insurance
42 U.S.C. §§ 300gg-2 and 300gg-42
45 C.F.R. §§ 146.152, 147.106 and 148.122
40 P.S. §§ 1302.1 et seq.
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All Other Types of Insurance
40 P.S. § 1171.3
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Notice Requirements
| Property and Casualty Private Passenger Automobile Insurance
40 P.S. § 991.2006
Owner-Occupied Private Residential Dwelling and Personal Property of Individuals
40 P.S. § 1171.5(a)(9) and 31 Pa. Code § 59.6
Commercial Lines
40 P.S. § 3403
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Major Medical Health Insurance
42 U.S.C. §§ 300gg-2, 300gg-42 (Guaranteed Renewability of Coverage) and 45 C.F.R. §§ 146.152, 147.106, 148.122
Refer to the current updated guidelines for standard renewal and product discontinuation notices released by CCIIO.
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All Other Types of Insurance
40 P.S. § 1171.4
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