Pennsylvania's insurance law is spread across several statutes. The state-law questions on every exam cite them directly:

• Title 40 of Purdon's Statutes (40 P.S.), which includes the producer licensing law (40 P.S. 310.1 et seq., Act 147 of 2002) and the Unfair Insurance Practices Act (UIPA, 40 P.S. 1171.1 et seq.).
• The newer consolidated Title 40 of the Pennsylvania Consolidated Statutes (40 Pa.C.S.), home to the 2024 rebating law and the insurance data security law.
• The Insurance Department regulations in 31 Pa. Code.
• The insurance fraud statute, 18 Pa.C.S. 4117.

This guide covers the Pennsylvania rules with citations. General concepts (types of insurers, agency law, what twisting or rebating means, federal law) are in the national Insurance Regulation guide.

About the exam

Pennsylvania's exams are given by PSI for the Pennsylvania Insurance Department. The passing score is 70%. Each exam may also include 5 to 10 unscored experimental questions, and the time limit already allows for them.

From the candidate information booklet and the licensing law:

• No prelicensing course: Act 142 of 2024 took effect April 29, 2025 and eliminated the prelicensing education requirement. A candidate simply registers for the exam and pays the fee (40 P.S. 310.4).
• Applying after the exam: submit the license application within 1 year of passing, through Sircon or NIPR. New resident applicants submit fingerprints for an FBI background check (310.5).
• Exam exemptions: a person licensed in another state for the same lines, and holders of the CPCU designation for property and casualty lines (310.4(d)).
• Variable life and variable annuity authority requires FINRA registration, with no separate state exam.

The regulator

• The Pennsylvania Insurance Department, headed by the Insurance Commissioner, licenses producers and insurers, approves forms and rates, and enforces the Code.
• Examinations: every licensed insurer is examined at least once every 5 years (40 P.S. 323.3). The Department also does market conduct examinations of sales, underwriting and claims practices.
• Receiverships: when an insurer becomes insolvent, the Commissioner acts as statutory receiver for rehabilitation or liquidation (40 P.S. 221.1 et seq.).
• Certificate of authority: insurers need one for each line they write (40 P.S. 47, 420).
• Forms and rates: forms are filed for approval (477b). Property and casualty rates are filed (1183-1184) and may not be excessive, inadequate or unfairly discriminatory.
• Insurer types:
  • Domestic = formed in Pennsylvania; foreign = another U.S. state; alien = another country (40 P.S. 46).
  • A reciprocal is an unincorporated exchange of contracts among subscribers through an attorney-in-fact.
  • A mutual insurer is owned by its policyholders.

Producer licensing (40 P.S. 310.1-310.99a)

Getting licensed

• A license is required to sell, solicit or negotiate insurance. A business entity needs its own license and must designate a licensed individual responsible for compliance (310.3, 310.5(b)).
• Resident applicants must be at least 18 (310.6).
• A license is nontransferable and lasts up to 2 years. Individual licenses renew biennially based on the birth month (310.7; 31 Pa. Code 37a.9).

Nonresidents and movers

• Nonresidents are licensed on a reciprocal basis if in good standing at home (310.10).
• Moving to Pennsylvania: apply for a resident license within 90 days, with proof of the old license or a letter of clearance, and no exam is needed (Insurance Department Act 606.1-A; 310.6a).
• Leaving Pennsylvania: request a letter of certification for the new home state.

Temporary license (310.9)

• Up to 180 days, no exam.
• After a resident licensee dies, it can go to the surviving spouse or court-appointed personal representative. It is also used after disability or military service.
• The Department may revoke a temporary license immediately and without notice if it is in the public interest.

Reporting and record duties

• Fictitious names: notify the Commissioner in writing before using one (310.7(1)).
• Contact changes: report a change of residence or business address, phone or e-mail within 30 days (310.11(19)).
• Administrative actions in another state: report within 30 days of final disposition (310.78(a)).
• Criminal charges: report within 30 days of being charged, followed by copies of the complaint and the disposition (310.78(b)).

Lapse and reinstatement (310.8(d))

• A complete reinstatement request within 60 days of lapse reinstates the license retroactively.
• Between 60 days and 1 year, reinstatement is prospective.
• After 1 year, you must reapply.

Continuing education (40 P.S. 310.8)

• 24 credit hours every 2-year license period, with at least 3 hours of ethics.
• Producers with property and casualty authority must include 2 hours on flood insurance.
• Up to 24 excess hours carry forward to the next period.
• Exempt:
  • Producers continuously licensed for the line since before 1971.
  • Business entities.
  • Limited lines licensees.
  • Nonresidents who meet a reciprocal home state's CE.
• The Department may waive CE for military service or other hardship.
• Product training:
  • Annuities: a one-time 4-hour course before selling them (Insurance Company Law 403.1-B).
  • Long-term care: an initial course, then 4 hours in each later 24-month cycle (31 Pa. Code 39a.9).

Appointments, commissions and fees

Appointments (40 P.S. 310.71-310.71a)

• A producer must be appointed to represent an insurer and earn its commissions. A producer may hold appointments with more than one insurer.
• An appointment lasts until the insurer ends it in writing or the license ends.
• Terminations: the insurer notifies the Department within 30 days after the effective date. When it reports a termination for a violation, it mails the producer a copy within 15 days. The insurer is immune for the report unless it acted with actual malice.

Commissions (310.72-310.73)

• No commissions to unlicensed persons.
• Renewal commissions may go to someone licensed at the time of sale.
• An unlicensed person who refers prospects without discussing policy terms may receive only a one-time nominal fixed fee not tied to a sale.

Fees (310.71(b), 310.74)

• No fee for completing an application.
• Fees on commercial business must be disclosed in writing in advance and be reasonable.
• A producer who represents the consumer for a fee needs a written agreement describing the services and the fee.
• A life producer who charges for financial planning uses an advance written agreement and keeps it 3 years after the services end (40 P.S. 625-3).

Premiums and placement (310.95-310.96)

• Premiums are held as a fiduciary. They may share one account if each insurer's funds can be identified in the records, but they may never be mixed with personal funds.
• A producer who places coverage with an unauthorized insurer is personally liable on the contract.

Lenders and banks (310.51, 310.76-310.77)

• A lender may not require a borrower to buy insurance from the lender. Borrowers must be told that buying from the lender isn't a condition of the loan.
• Insurance sold in a bank must be sold in an area separate from deposit-taking and lending.
• An annuity sold on bank premises needs a written disclosure that it is not a deposit, not FDIC-insured, not bank-guaranteed and may lose value.

Act 143 of 1978 (agency termination, property and casualty) (40 P.S. 241)

• The insurer gives the agent and the Commissioner 90 days' written notice.
• Termination for adverse loss experience or low volume requires a rehabilitation program of at least 1 year.
• After notice, the insurer must offer to continue the agent's policies for 12 months.
• Act 143 doesn't apply to agency contracts in effect less than 4 years.

Discipline and penalties

Grounds (40 P.S. 310.11) include:

• False application information.
• Forgery.
• Misappropriation.
• Moving a client's coverage to another insurer without consent.
• Failing to obey a child support order.

Procedure

• Discipline requires notice and a hearing set at least 10 days after the notice (310.91(a)). Many cases end in a consent agreement.
• Department inquiries: answer within 30 days. Failing to correct within 15 days after notice can bring fines of up to $100 per day per violation (310.12).

Penalties

• Civil penalties of up to $5,000 per violation (310.91(d)).
• Acting without a license is a felony of the third degree (310.41).
• An insurer or licensee that knowingly accepts business from an unlicensed person: up to $5,000 per violation (310.41a).

Rebates and inducements (40 Pa.C.S. Chapter 51)

Act 62 of 2024 moved Pennsylvania's rebating law into 40 Pa.C.S. Ch. 51.

• Noncash gifts or meals for marketing or retention: up to $125 per year in total per person, and not contingent on a purchase (5102(c)(1)).
• Commercial customers: gifts must be reasonable in relation to the premium.
• Raffles and drawings: prizes up to $125, with no purchase required (5102(c)(3)).
• Value-added services are allowed if they relate to the coverage, mitigate loss or promote wellness, and are offered on objective criteria. Examples are a water-leak sensor or a no-cost wellness program (5102(b)(5)).
• Advertising insurance as "free" or "no cost" is prohibited (5103).

Unfair Insurance Practices Act (40 P.S. 1171.5)

The listed unfair practices include:

• Misrepresentation of policy terms. This includes sliding (saying optional coverage is required by law) and churning (an internal replacement through misrepresentation).
• Twisting.
• False advertising.
• Defamation.
• Boycott, coercion and intimidation.
• Unfair discrimination, including on religion, national origin or place of residence. Refusing to write a risk solely because of its geographic location is redlining.
• Refusing, canceling or nonrenewing coverage because someone is a victim of domestic abuse (1171.5(a)(14)).
• False statements on applications to earn a commission (1171.5(a)(12)).
• Advertising permanent life to people 50 and older without disclosing any reduction in the face amount (1171.5(a)(13)).

Complaint records: insurers and producers keep a record of written complaints for the preceding 4 years (1171.5(a)(11)).

Penalties (1171.11)

• A knowing violation: up to $5,000 per violation, maximum $50,000 in six months.
• A violation the person didn't know about and shouldn't reasonably have known about: up to $1,000 per violation, maximum $10,000 in six months.
• Violating a cease and desist order: up to $10,000 per violation.

Claims handling (31 Pa. Code Ch. 146)

• Acknowledge a claim within 10 working days.
• Answer a Department inquiry about a claim within 15 working days.
• If the investigation isn't finished in 30 days, explain in writing and update every 45 days.
• Accept or deny a first-party claim within 15 working days after proper proof of loss.
• Forcing insureds to sue with lowball offers, as a general business practice, is an unfair claim practice (40 P.S. 1171.5(a)(10)).

Fraud (18 Pa.C.S. 4117)

• Knowingly presenting a false claim or statement is a felony of the third degree.
• Civil penalties: up to $5,000, $10,000 and $15,000 for first, second and later violations.
• An insurer harmed by a pattern of fraud may recover treble damages.
• Applications and claim forms must carry a fraud warning.
• People who report suspected fraud to an authorized entity are immune from liability.
• The Insurance Fraud Prevention Authority funds investigation and prosecution.

Privacy and data security

• Privacy: 31 Pa. Code Ch. 146a-146b require safeguarding nonpublic personal financial and health information and giving privacy notices.
• Data security: the Insurance Data Security law (40 Pa.C.S. Ch. 45) requires a written information security program. A licensee notifies the Commissioner of a qualifying cybersecurity event within 5 business days (4518(a)).

Replacement and disclosure (life and annuities)

Replacement (31 Pa. Code Ch. 81)

• The Notice Regarding Replacement is signed by the applicant and the producer no later than when the application is taken.
• The replacing insurer notifies the existing insurer within 5 working days.
• An existing insurer trying to conserve the policy sends a disclosure or ledger statement within 20 days.
• Borrowing more than 25% of the old policy's loan value to fund a new one counts as a replacement.

Life disclosure (31 Pa. Code Ch. 83)

• A Disclosure Statement is due no later than when the application is signed.
• The Surrender Comparison Index (at 5% interest) is due at delivery.
• Annuities are exempt from Ch. 83.

Free looks

• 10, 20 or 45 days for life and annuities (see the Pennsylvania Life Policy Provisions guide).

Guaranty associations

Pennsylvania Life and Health Insurance Guaranty Association (40 P.S. 991.1701-991.1718)

• Insurers deliver a summary document with a disclaimer at or before delivery.
• Using the Association in sales is prohibited (991.1717).

Pennsylvania Property and Casualty Insurance Guaranty Association (40 P.S. 991.1801-991.1820)

• $300,000 per claimant; $10,000 for unearned premium.
• First-party claims by insureds with net worth over $25 million are excluded.
• Funded by assessments of up to 2% of prior-year net direct premiums.
• Workers' compensation is excluded. Claims of insolvent WC insurers are paid by the Workers' Compensation Security Fund.
• Insurers may not advertise guaranty association protection (991.1820).

Surplus lines (40 P.S. 991.1601 et seq.)

• Coverage may go to an eligible surplus lines insurer only after a diligent search shows admitted insurers won't write it. The forms must not differ materially from admitted forms.
• The insured is told the insurer is nonadmitted and not backed by the guaranty association.
• The licensee files a written declaration within 45 days.
• Premium tax: 3%.
• A resident surplus lines license requires a resident P&C license plus the surplus lines exam.

Common exam traps

• No prelicensing course since April 29, 2025. Apply for the license within 1 year of passing.
• CE: 24 hours, including 3 ethics, plus 2 flood hours for P&C. Up to 24 hours carry forward.
• Reporting: contact changes in 30 days; administrative actions 30 days after final disposition; criminal charges 30 days after being charged.
• Reinstatement: within 60 days is retroactive; up to 1 year is prospective; after that, reapply.
• Rebating: the limit is $125 a year under 40 Pa.C.S. Ch. 51. The old 40 P.S. 310.45-310.46 sections were repealed.
• No application fees. Fees on commercial business only, disclosed in advance.
• P&C guaranty: $300,000. Workers' comp isn't covered (Security Fund instead).
• Unlicensed activity is a third-degree felony.