Section 46 - Certificates of authority to do business(a) No insurance company, association, or exchange of another state or foreign government shall do an insurance business within this Commonwealth without first having obtained a certificate of authority from the Insurance Commissioner authorizing such company, association or exchange to do such business. Before granting such a certificate of authority to an insurance company, association or exchange, the commissioner shall be satisfied, by such examination as he may make or by such evidence as he may require or demand, that such company, association, or exchange conforms to the requirements of this act and of the laws of this Commonwealth prerequisite to its issue. After such issue the holder shall continue to comply with the requirements as to its business set forth in this act and in the laws of this Commonwealth. The commissioner may renew the certificate of authority of any mutual assessment life or accident association, which is now lawfully doing business in this Commonwealth, beginning on the first day of April of each year, and continuing in force for one year unless sooner revoked by him or surrendered by the licensee. Any certificates issued after April first shall expire on the thirty-first day of March succeeding.(b) Any of the following acts constitute the doing of an insurance business within this Commonwealth, whether effected by mail or otherwise: (1) the issuance or delivery of contracts of insurance to persons resident in this Commonwealth, or(2) the solicitation of applications for such contracts, or other negotiations preliminary to execution of such contracts, or(3) the collection of premiums, membership fees, assessments or other consideration for such contracts, or(4) the transaction of matters subsequent to execution of such contracts and arising out of them.(c)(1) Whenever the commissioner believes, from evidence satisfactory to him, that any insurance company, association, or exchange is doing an insurance business within this Commonwealth in violation of any provision of this act or any order or requirement of the commissioner issued or promulgated pursuant to authority expressly granted the commissioner by any provision of this act or by law, or is about to violate any such provision, order, or requirement, the commissioner may, in his discretion, take against the offending party or parties any one or more of the following courses of action:(i) Revoke the certificate of authority of such offending company, association or exchange.(ii) Refuse to renew the certificate of authority of such offending company, association or exchange. This remedy is in addition to any other remedy provided by this act or by law.
(2) Before the Insurance Commissioner shall take any action as set forth in paragraph (1), he shall give written notice to the person, company, association or exchange accused of violating the laws, stating specifically the nature of such alleged violation and fixing a time and place, at least ten days thereafter, when a hearing before the Insurance Commissioner regarding the matter shall be held.(d)(1) The performance by an insurance company, association, or exchange of another state or foreign government of any act which constitutes the doing of an insurance business within this Commonwealth is equivalent to and shall constitute an appointment by such company, association or exchange of the Secretary of the Commonwealth and his successor or successors in office as its true and lawful attorney upon whom may be served all lawful process in any action, suit or proceeding instituted by or on behalf of the Insurance Commissioner against it arising out of a violation of this section, and the performance of any such act shall be signification of its agreement that such service of process is of the same legal force and validity as personal service of process in this Commonwealth upon such company, association, or exchange.(2) Such service of process shall be made by delivering to and leaving with the Secretary of the Commonwealth or his deputy two copies thereof. The Secretary of the Commonwealth shall forthwith mail, by registered or certified mail, one of the copies of such process to such company, association or exchange at its last known principal place of business and shall keep record of all process so served upon him. Such service of process is sufficient, provided that (i) notice of such service upon the Secretary of the Commonwealth and a copy of the process are sent within ten days thereafter, by registered or certified mail, by or on behalf of the Insurance Commissioner to such company, association or exchange at its last known principal place of business, and (ii) the receipt of such company, association or exchange or the receipt issued by the post office with which the letter is registered or certified, showing the name of the sender of the letter and the name and address of the company, association or exchange to whom the letter is addressed, and the affidavit of or on behalf of the commissioner showing a compliance herewith, are filed with the prothonotary or clerk of the court in which such action, suit or proceeding is pending on or before the date such company, association or exchange is required to appear or within such further time as the court may allow.(3) Service of process in any such action, suit or proceeding shall, in addition to the manner provided in clause (2) of subsection (d) of this section, be valid if served upon any person within this Commonwealth, who in this Commonwealth on behalf of such company, association or exchange is--(i) soliciting insurance, or(ii) making, issuing or delivering any contract of insurance, or(iii) collecting or receiving any premium, membership fee, assessment, or other consideration for insurance: Provided, That (i) notice of such service and a copy of such process is sent within ten days after such service, by registered or certified mail, by or on behalf of the Insurance Commissioner to such company, association or exchange at its last known principal place of business, and (ii) the receipt of such company, association or exchange or the receipt issued by the post office with which the letter is registered or certified, showing the name of the sender of the letter and the name and address of the company, association or exchange to whom the letter is addressed, and the affidavit of or on behalf of the commissioner showing a compliance herewith, are filed with the prothonotary or clerk of the court in which such action, suit or proceeding is pending on or before the date such company, association or exchange is required to appear or within such further time as the court may allow.
(4) Before any company, association or exchange of another state or foreign government shall file or cause to be filed any pleading in any action, suit or proceeding instituted against it under this section, such company, association or exchange shall, if the court in its discretion shall require, deposit with the prothonotary of the court in which such action, suit or proceeding is pending, cash or securities, or file with such prothonotary or clerk a bond with good and sufficient sureties to be approved by the court. Said deposit or bond shall be in such amount as the court in its sole discretion, after taking into account the financial condition of such company, association or exchange and such other factors as the court considers pertinent, may deem sufficient to secure the payment of any final judgment which may be rendered in such action, suit or proceeding.(5) The court in any action, suit or proceeding in which service is made in the manner provided herein may, in its discretion, order such postponement as may be necessary to afford such company, association or exchange reasonable opportunity to comply with clause (4) of this subsection and to defend such action, suit or proceeding.(6) No judgment by default or otherwise shall be entered in any action, suit or proceeding under this section until the expiration of thirty days from the date of the filing of the affidavit of compliance as set forth in clauses (2) or (3) of this subsection.(7) Nothing contained in this section shall limit or abridge the right to serve any process, notice or demand upon any company, association or exchange of another state or foreign government in any manner now or hereafter permitted by law.(e) The provisions of this section shall not apply to the following:(1) Transactions regulated by the act of January 24, 1966 (1965 P.L. 1509, No. 531), entitled "An act relating to, regulating, taxing, supervising and controlling the placing of insurance on risks located in the Commonwealth of Pennsylvania with insurers not licensed to transact insurance business in Pennsylvania, permitting licensed insurers to afford coverage which may be placed with unlicensed insurers, providing fees and penalties, and repealing certain existing laws."(2) Any life insurance or annuity company organized and operated, without profit to any shareholder or individual, exclusively for the purpose of aiding nonprofit educational or scientific institutions by issuing insurance and annuity contracts only to or for the benefit of such institutions and individuals engaged in the service of such institutions. Any insurance company as described in this clause is required to join the Life and Health Insurance Guaranty Association pursuant to the act of November 26, 1978 (P.L. 1188, No. 280), known as the "Life and Health Insurance Guaranty Association Act," and to join any successor association pursuant to any similar statute which replaces the "Life and Health Insurance Guaranty Association Act." The assessments for any company so required to join shall be the same as for member insurers, but these assessments shall not apply to annuity considerations. The "Life and Health Insurance Guaranty Association Act" shall not apply to annuity contracts issued by any insurance company as described in this clause.(3) Contracts of reinsurance.(4) Transactions in this Commonwealth which (i) involve a policy lawfully solicited, written and delivered outside of this Commonwealth covering only subjects of insurance not resident, located, or expressly to be performed in this Commonwealth at the time of issuance of such policy, and (ii) are subsequent to the issuance of such policy.(5)(i) Transactions in this Commonwealth, except group credit life or group credit accident and health insurance transactions, involving group accident and health or life insurance policies or group annuity contracts where the group policy is issued to:(A) An out-of-State trustee of a fund in another state, an organization in another state or a trust or trustee of a trust established or participated in by one or more organizations in another state, in which (state) the insurance supervisory official or agency of that state has determined that: the issuance of the group policy or certificate is not contrary to the best interests of the general public; the issuance of the group policy or certificate would result in economies of acquisition or administration; the benefits are reasonable in relation to the premium charged; and, for group accident and health insurance, the coverage is in compliance with any mandated benefit act specifically providing for coverage on residents of this Commonwealth regardless of whether the group policy is used within or outside this Commonwealth.(B) An out-of-State single employer.(C) A trustee of a fund established by any person acting directly as an employer having its principal office located in a state other than this Commonwealth.(D) An association or a trust or trustee of a trust established or participated in by one or more associations to insure association members, spouses or dependents of members: Provided, however, That the association must be organized or domiciled in a state other than this Commonwealth, have a constitution and bylaws, be organized by other than an insurer, be maintained in good faith for purposes other than that of obtaining insurance, have been in active existence for at least two years, operate from offices other than the insurer's and be controlled by principals other than the insurer's.(E) A union-negotiated out-of-State trust.(F) Other groups as may be determined by the Insurance Commissioner at his discretion.(ii) As used in this clause (5): An "organization" means any of the following:
(A) Any bank, retailer or other issuer which:(I) issues a credit card, charge card or payment card for the purchase of goods or services; and(II) is issued a policy insuring holders of the card.(B) Any bank, savings and loan association, credit union, mutual fund, money market fund, stock broker or other similar financial institution which:(I) is regulated by Federal or state law; and(II) is issued a policy insuring its depositors, account holders or members. An "out-of-State single employer" means any person acting directly as an employer and has its principal office located in a state other than this Commonwealth.
An "out-of-State trustee" of a fund means a trustee of a fund established by an insurer for two or more employers or established by two or more persons acting directly as employers and the trustee has its principal office located in a state other than this Commonwealth.
A "union-negotiated out-of-State trust" means a trust established under a collective bargaining agreement and which is located in a state other than this Commonwealth.
It shall be the responsibility of the insurer claiming exemption under this subsection to demonstrate compliance with each of the above conditions.
(6)(i) Any insurance company or underwriter issuing contracts of insurance to industrial insureds, (ii) industrial insureds, or (iii) contracts of insurance issued to an industrial insured: Provided, That nothing herein shall relieve such industrial insured from the requirement of compliance with the applicable provisions of the act of January 24, 1966 (1965 P.L. 1509, No. 531), referred to above. For purposes of this section, an "industrial insured" is an insured (i) who procures the insurance of any risk or risks by use of the services of a full-time employe acting as an insurance manager or buyer or the services of a regularly and continuously retained qualified insurance consultant, (ii) whose aggregate annual premiums for insurance on all risks total at least twenty-five thousand dollars ($25,000), and (iii) who has at least twenty-five full-time employes.(7) Transactions in this Commonwealth involving a policy of insurance issued prior to the effective date of this act.(8) Insurance on the property and operation of railroads or aircraft engaged in interstate or foreign commerce, insurance of vessels, crafts or hulls, cargoes, marine builder's risks, marine protection and indemnity, lessees and charterers' liability, or other risks including strikes and war risks commonly insured under ocean or wet marine forms of policies.1921, May 17, P.L. 789, art. II, § 208. Amended 1968, July 31, P.L. 763, No. 239, § 1; 1976, July 9, P.L. 912, No. 166, § 1, imd. effective; 1992, July 9, P.L. 434, No. 91, § 1, effective in 60 days; 1992, Dec. 18, P.L. 1469, No. 177, § 2, effective in 120 days; 1994, Feb. 17, P.L. 79, No. 8, § 2, effective in 90 days.