§ 128.34. Financial responsibility.

 (a)  The Department will consider a certificate of insurance from an insurer or surety to be evidence of financial responsibility if the insurer or surety is licensed to do business under section 1605 of the Insurance Company Law of 1921 (40 P. S. §  991.1605), or otherwise permitted by Federal law or the Insurance Department to do business in this Commonwealth, if the following conditions are met:

   (1)  The certificate of insurance includes the name of the insurance company, policy number, insurance amount, type of coverage afforded and exclusions relating to damage arising from the use of pesticides and expiration date of the policy.

   (2)  The minimum comprehensive general liability insurance provided is $100,000 for each occurrence of bodily injury liability and $100,000 for each occurrence of property damage liability. A policy may be written with combined limits if the limits equal or exceed the sum of the individual limits.

   (3)  The certificate indicates coverage for completed operations and includes a statement indicating that the coverage applies to pesticide application.

   (4)  The maximum deductible amount does not exceed $2,500 of the combined policy limits. If a pesticide application business has not satisfied the deductible amount in a prior claim, the policy may not contain a deductible amount.

   (5)  A current certificate of insurance is forwarded to the Department at each insurance renewal date which sets forth the same information specified in paragraphs (1)—(4).

 (b)  A pesticide application business desiring to qualify as a self-insurer may submit a written proposal of self-insurance to the Department for approval.

   (1)  The proposal shall include the following:

     (i)   A master self-insurance and security agreement.

     (ii)   A balance sheet and income statement which shall reflect the actual financial condition of the business as of the last complete calendar or fiscal year preceding the date of the proposal. These documents shall be prepared in accordance with generally accepted accounting principles and shall be certified by a certified public accountant.

   (2)  A business will not be approved as a self-insurer unless it posts certain collateral with the Department. This paragraph does not apply to government agencies or authorities.

   (3)  The minimum required security that shall be furnished to the Department is $500,000.

   (4)  Only the following will be accepted as valid collateral for self-insurance purposes:

     (i)   United States currency, including United States Treasury bills, United States Treasury notes or other negotiable obligations of the United State Government. United States Savings Bonds are not negotiable.

     (ii)   Evidence of escrow deposits in Federal or State banks, credit unions or savings and loan associations if Federally insured. Escrow deposits shall be established for the sole purpose of providing security to meet the duties of a self-insurer.

     (iii)   Irrevocable letters of credit issued by a bank in this Commonwealth or another bank as approved by the Department.

     (iv)   Surety bonds issued by insurers authorized or eligible to do business in this Commonwealth.

     (v)   Bonds or other negotiable obligations issued by a state, subdivision or instrumentality of a state in the United States, if not in default as to principal or interest.

     (vi)   Corporate bonds, issued by an entity other than the proposed self-insurer, rated A or better by Moody’s Bond Record, Moody’s Investors Service, Inc.

     (vii)   Other security approved upon petition to the Department.

   (5)  The Department will hold the collateral furnished for the benefit of the persons to whom the self-insurer is obligated.

     (i)   The self-insurer shall pay for obligations incurred under the act by assets readily reduced to liquid assets, such as demand deposits, time deposits, negotiable instruments and other assets which may be readily reduced to liquid form.

     (ii)   If the self-insurer is not able to discharge its obligations, the self-insurer may petition the Department to release the collateral posted as is necessary to satisfy the obligations of the self-insurer.

     (iii)   If withdrawals from collateral are required, the self-insurer shall replace the security within 72 hours from the date of withdrawal, to retain its certificate as a self-insurer.

   (6)  A self-insurer shall annually furnish to the Department a report of claims incurred during the preceding calendar year.

   (7)  Upon approval by the Department of a self-insurance proposal, a self-insurance certificate will be issued to the self-insurer. The certificate shall be renewed annually, after review that the Department deems appropriate.

 (c)  If the evidence of financial responsibility furnished by a pesticide application business no longer complies with this section, the business shall immediately provide other evidence of financial responsibility which complies with this section. If it fails to do so, the Secretary may revoke its license.


   The provisions of this §  128.34 amended under section 7(b)(2) of the Pennsylvania Pesticide Control Act of 1973 (3 P. S. §  111.27(b)(2)).


   The provisions of this §  128.34 amended December 10, 2010, effective December 11, 2010, 40 Pa.B. 7044. Immediately preceding text appears at serial pages (206526) and (305259) to (305260).

Cross References

   This section cited in 7 Pa. Code §  130d.26 (relating to financial responsibility).

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