No. 2386 October Term, 1978, Appeal from the Order of the Court of Common Pleas of Cumberland County, No. 861 Civil 1978, in Assumpsit.
David E. Lehman, Harrisburg, for appellant.
George F. Douglas, Jr., Harrisburg, for appellee.
Price, Gates and Dowling,*fn* JJ.
[ 270 Pa. Super. Page 260]
This appeal is from the order of the court of common pleas granting appellee's petition for declaratory judgment. The pertinent facts are as follows. Appellee's decedent, Timothy A. Brader, was killed on November 10, 1977, when his automobile was struck head-on by an automobile driven by an uninsured motorist. Decedent maintained an insurance policy with appellant which provided for the following coverage: family compensation benefits up to $5,000; no-fault benefits of up to $5,000 for survivor's loss and the first $1,500 of funeral expenses; and uninsured motorist coverage up to $15,000. Appellant paid appellee the full amounts of coverage with respect to the family compensation benefits and the no-fault benefits of survivor's loss and funeral expenses, but refused to pay the full amount of coverage provided by the decedent's uninsured motorist provision. Appellant maintained that the $15,000 maximum coverage called for in that provision should be reduced by the no-fault benefits ($6,500) received. To support this contention, appellant pointed to the following clause contained in the uninsured motorist provision of decedent's insurance policy:
"Any amount payable to or for an insured under the Uninsured Motorist coverage of any policy will be reduced by the amount of any Personal Injury Protection benefits paid or payable, and any benefits that would have been paid or payable except for a deductible provision."
Appellee filed a petition for declaratory judgment with the court of common pleas claiming that the entire $15,000 of uninsured motorist coverage was due and owing since the damages to the estate exceeded the total amount of coverage provided for under the decedent's insurance policy. The court of common pleas, per the Honorable Dale F. Shugart, P. J., granted appellee's petition and held that the clause in
[ 270 Pa. Super. Page 261]
the decedent's uninsured motorist provision allowing set-off of no-fault benefits was invalid and contrary to public policy.
Simply stated, the question presented by this case is whether the policy provision in issue is contrary to public policy and legislative intent, i. e., may an insurance company reduce the statutorily mandated minimum benefits of its uninsured motorist insurance provisions by setting off those amounts received by the insured under his no-fault coverage? We hold that it may not, and therefore affirm the order of the court of common pleas.
Appellant maintains that the policy provision in issue was drawn verbatim from the standard form no-fault policy promulgated by the Pennsylvania Insurance Commission, see 31 Pa.Code § 66.2(a), and therefore, its compliance with the commission's recommendation was consonant with regulatory purpose and policy. We find the insurance provision, as found in the decedent's uninsured motorist policy and in the Pennsylvania Code's model no-fault policy, to be contrary to public policy and the intent of the legislature.
Initially, we note that approval of the policy provision by the Insurance Commissioner does not per se establish the validity of the particular provision, even though approval of forms by the Commissioner is a prerequisite to their use under the Insurance Company Law of 1921, as amended, 40 P.S. § 477b. If a court determines that a challenged provision is void as being contrary to law, then the approval itself is invalid as well, since such approval exceeds the power granted ...