Section 1600.201 - Industry placement facility(a) Membership. Each insurer which is authorized to write and is engaged in writing within this Commonwealth, on a direct basis, basic property insurance or any component thereof contained in a multiple peril policy, including homeowners and commercial multiple peril policies, shall participate in the Industry Placement Facility, as hereinafter described, as a condition of its authority to write such kinds of insurance within this Commonwealth. Other insurers may become members provided they are eligible unlicensed insurers under the act of January 24, 1966 (P.L. 1509). (b) Purposes. The purposes of the Facility shall be twofold, as more fully set forth in this article: (1) To formulate and administer, subject to the approval of the commissioner, a plan assuring fair access to insurance requirements (Fair Plan) in order that no property in urban areas shall be denied basic property insurance through the normal insurance market provided by the private property insurance industry, except after a physical inspection of such property and a fair evaluation of its individual underwriting characteristics; and(2) To formulate and administer, subject to the approval of the commissioner, a reinsurance arrangement whereby the members of the Facility shall share equitably the responsibility for insuring property in urban areas which is insurable but for which basic property insurance cannot be obtained through the normal insurance market.(c) Organization. Within forty-five days following the effective date of this act, the Industry Placement Facility shall submit to the commissioner for his review a proposed plan of operation of the Facility, consistent with the provisions of this act and the purposes of the Facility, which shall provide for the Fair Plan, the reinsurance arrangement, and the economical and efficient administration of the Facility, including, but not limited to, management of the Facility, preliminary assessment of all members for initial expenses necessary to commence operations, establishment of necessary facilities within this Commonwealth, assessment of members to defray losses and expenses, commission arrangements, reasonable underwriting standards and limits of liability, acceptance and cession of reinsurance, and procedures for determining amounts of insurance to be provided. The plan of operation shall be subject to approval by the commissioner and shall take effect ten days after having been approved by him. If the commissioner disapproves the proposed plan of operation, the Facility shall within fifteen days submit for review an appropriately revised plan of operation and, if the Facility fails to do so, or if the revised plan so filed is unacceptable, the commissioner shall promulgate a plan of operation.
(d) Amendment of Plan of Operation of Facility. The Facility shall, on its own initiative, subject to prior approval by the commissioner, or at the direction of the commissioner, amend the plan of operation.(e) Administration. (1) The Facility shall be governed by a board of seven directors, elected annually by the members of the Facility. Each member of the Facility shall be allotted votes bearing the same ratio to the total number of votes to be cast as its degree of participation in the Facility bears to the total participation. Pending the determination of the degree of participation of the members in the Facility, each member of the Facility shall be allotted votes bearing the same ratio to the total number of votes to be cast as each member's written premium on basic property insurance during calendar year 1967 bears to the statewide total written premium for basic property insurance during such year. The first board shall be elected at a meeting of the members or their authorized representatives.(2) Any vacancy on the board shall be filled by a vote of the other directors.(3) If at any time the members fail to elect the required number of directors or a vacancy remains unfilled for more than fifteen days, the commissioner may appoint the directors necessary to constitute a full board.(f) Participation. All members of the Facility shall participate in its expenses and in its profits and losses (or in such categories thereof as may be separately established by the Facility) in the proportion that the premiums written (as herein defined, but excluding that portion, if any, of premiums which is attributable to the reinsurance arrangement maintained by the Facility) by each such member during the second preceding calendar year bear to the aggregate premiums written in this Commonwealth by all members of the Facility. Such participation by each member in the Facility shall be determined annually by the Facility on the basis of such premiums written during the second preceding calendar year as disclosed in the annual statements and other reports filed by the member with the commissioner.1968, July 31, P.L. 738, No. 233, art. II, § 201.