2013 -- S 0719

=======

LC01649

=======

STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

____________

A N A C T

RELATING TO INSURANCE - UNFAIR DISCRIMINATION AGAINST SUBJECTS OF

ABUSE IN PROPERTY AND CASUALTY INSURANCE

     

     

     Introduced By: Senators Gallo, and Lynch

     Date Introduced: March 13, 2013

     Referred To: Senate Commerce

It is enacted by the General Assembly as follows:

1-1

     SECTION 1. Title 27 of the General Laws entitled "INSURANCE" is hereby amended

1-2

by adding thereto the following chapter:

1-3

     CHAPTER 60.1

1-4

UNFAIR DISCRIMINATION AGAINST SUBJECTS OF ABUSE IN PROPERTY AND

1-5

CASUALTY INSURANCE

1-6

     27-60.1-1. Short title. -- This chapter shall be known and may be cited as the "Unfair

1-7

Discrimination Against Subjects of Abuse in Property and Casualty Insurance Act."

1-8

     27-60.1-2. Purpose. -- The purpose of this chapter is to prohibit unfair discrimination by

1-9

property and casualty insurers and insurance professionals on the basis of abuse status. Nothing in

1-10

this chapter shall be construed to create or imply a private cause of action for a violation of this

1-11

chapter.

1-12

     27-60.1-3. Scope. -- This chapter applies to all property and casualty insurers and

1-13

insurance professionals involved in issuing or renewing, in this state, a policy of property and

1-14

casualty insurance.

1-15

     27-60.1-4. Definitions. -- For the purposes of this chapter:

1-16

      (1) “Abuse” means the occurrence of one or more of the following acts by a current or

1-17

former family member, household member, intimate partner or caretaker :

1-18

     (i) Attempting to cause or intentionally, knowingly or recklessly causing another person

1-19

bodily injury, physical harm, severe emotional distress, psychological trauma, rape, sexual assault

2-1

or involuntary sexual intercourse;

2-2

     (ii) Knowingly engaging in a course of conduct or repeatedly committing acts toward

2-3

another person including following the person without proper authority, under circumstances that

2-4

place the person in reasonable fear of bodily injury or physical harm;

2-5

     (iii) Subjecting another person to false imprisonment; or

2-6

     (iv) Attempting to cause or intentionally, knowingly, or recklessly causing damage to

2-7

property so as to intimidate or attempt to control the behavior of another person.

2-8

     (2) “Abuse-related claim” means a claim under a property and casualty policy for a loss

2-9

resulting from an act of abuse.

2-10

     (3) “Abuse status” means the fact or perception that a natural person is, has been, or may

2-11

be a subject of abuse, irrespective of whether the natural person has incurred abuse-related

2-12

claims.

2-13

     (4) “Commissioner” means the director of the department of business regulation or his or

2-14

her designee.

2-15

     (5) “Confidential abuse information” means information about acts of abuse or abuse

2-16

status of a subject of abuse, the address and telephone number (home and work) of a subject of

2-17

abuse or the status of an applicant or insured as a family member, employer or associate of, or a

2-18

person in a relationship with, a subject of abuse.

2-19

     (6) “Insurance professional” means a producer, broker, adjuster or third-party

2-20

administrator as defined in the insurance laws of this state.

2-21

     (7) “Insured” means the party named on a policy or certificate as the individual with legal

2-22

rights to the benefits provided by such policy.

2-23

     (8) “Insurer” means a person or other entity engaged in the business of property and

2-24

casualty insurance in this state including all residual market mechanisms.

2-25

     (9) “Policy” means a contract of insurance, including endorsements, riders or binders

2-26

issued, proposed for issuance, or intended for issuance by an insurer or insurance professional.

2-27

     (10) “Subject of abuse” means a natural person against whom an act of abuse has been

2-28

directed; who has current or prior injuries, illnesses or disorders that resulted from abuse; or who

2-29

seeks, may have sought or had reason to seek medical or psychological treatment for abuse; or

2-30

protection, court-ordered protection or shelter from abuse.

2-31

     27-60.1-5. Unfairly discriminatory acts relating to property and casualty insurance.

2-32

-- (a) It is unfairly discriminatory to deny, refuse to issue, renew or reissue; to cancel or otherwise

2-33

terminate; restrict or exclude coverage on or to add a premium differential to a property and

2-34

casualty insurance policy on the basis of the applicant’s or insured’s abuse status.

3-1

     (b) It is unfairly discriminatory to:

3-2

     (1) Exclude or limit payment for a covered loss or deny a covered claim incurred as a

3-3

result of abuse by a person other than a co-insured; or

3-4

     (2) Fail to pay losses arising out of abuse to an innocent first party claimant to the extent

3-5

of such claimant’s legal interest in the covered property if the loss is caused by the intentional act

3-6

of an insured, or using other exclusions or limitations on coverage which the commissioner has

3-7

determined unreasonably restrict the ability of subjects of abuse to be indemnified for such losses.

3-8

     (c) This section shall not require payment in excess of the loss or policy limits.

3-9

     (d) Nothing in this chapter shall be construed to prohibit an insurer or insurance

3-10

professional from applying reasonable standards of proof to claims under this section.

3-11

     (e) When the insurer or insurance professional has information in its possession that

3-12

clearly indicates that the insured, applicant or claimant is a subject of abuse, it is unfairly

3-13

discriminatory, by a person employed by or contracting with an insurer, to disclose or transfer

3-14

confidential abuse information, as defined in this chapter, for any purpose or to any person,

3-15

except:

3-16

     (1) To the subject of abuse or an individual specifically designated in writing by the

3-17

subject of abuse;

3-18

     (2) When ordered by the commissioner or a court of competent jurisdiction or otherwise

3-19

required by law;

3-20

     (3) When necessary for a valid business purpose to transfer information that includes

3-21

confidential abuse information that cannot reasonably be segregated without undue hardship,

3-22

confidential abuse information may be disclosed only if the recipient has executed a written

3-23

agreement to be bound by the prohibitions of this chapter in all respects and to be subject to the

3-24

enforcement of this chapter by the courts of this state for the benefit of the applicant or the

3-25

insured, and only to the following persons:

3-26

     (i) A reinsurer that seeks to indemnify or indemnifies all or any part of a policy covering

3-27

a subject of abuse and that cannot underwrite or satisfy its obligations under the reinsurance

3-28

agreement without that disclosure;

3-29

     (ii) A party to a proposed or consummated sale, transfer, merger or consolidation of all or

3-30

part of the business of the insurer or insurance professional;

3-31

     (iii) Medical or claims personnel contracting with the insurer or insurance professional,

3-32

only where necessary to process an application or perform the insurer’s or insurance

3-33

professional’s duties under the policy or to protect the safety or privacy of a subject of abuse (also

3-34

includes parent or affiliate companies of the insurer or insurance professional that have service

4-1

agreements with the insurer or insurance professional); or

4-2

     (iv) With respect to address and telephone number, to entities with whom the insurer

4-3

transacts business when the business cannot be transacted without the address and telephone

4-4

number;

4-5

     (4) To an attorney who needs the information to represent the insurer or insurance

4-6

professional effectively, provided the insurer or insurance professional notifies the attorney of its

4-7

obligations under this chapter and requests that the attorney exercise due diligence to protect the

4-8

confidential abuse information consistent with the attorney’s obligation to represent the insurer or

4-9

insurance professional; or

4-10

     (5) To any other entities deemed appropriate by the commissioner.

4-11

     (f) It is unfairly discriminatory to request information relating to acts of abuse or an

4-12

applicant’s or insured’s abuse status, or to make use of that information, however obtained,

4-13

except for the limited purposes of complying with legal obligations or verifying a person’s claim

4-14

to be a subject of abuse.

4-15

     (g) Paragraph (e)(3)(iii) does not preclude a subject of abuse from obtaining his or her

4-16

insurance records.

4-17

     (h) Paragraph (e)(3)(iv) does not prohibit a property and casualty insurer from asking an

4-18

applicant or insured about a property and casualty claim, even if the claim is abuse-related, or

4-19

from using information thereby obtained in evaluating and carrying out its rights and duties under

4-20

the policy, to the extent otherwise permitted under this chapter and other applicable law.

4-21

     27-60.1-6. Justification of Adverse Insurance Decisions. -- An insurer or insurance

4-22

professional that takes an action not prohibited by section 27-60.1-5 that adversely affects an

4-23

applicant or insured on the basis of claim or other underwriting information that the insurer or

4-24

insurance professional knows or has reason to know is abuse-related shall explain the reason for

4-25

its action to the applicant or insured in writing and shall be able to demonstrate that its action, and

4-26

any applicable policy provision:

4-27

     (1) Does not have the purpose of treating abuse status as an underwriting criterion; and

4-28

     (2) Is otherwise permissible by law and applies in the same manner and to the same

4-29

extent to all applicants and insureds with a similar claim or claims history without regard to

4-30

whether the claims are abuse-related.

4-31

     27-60.1-7. Insurance Protocols for Subjects of Abuse. -- Insurers shall develop and

4-32

adhere to written policies specifying procedures to be followed by employees and by insurance

4-33

professionals they contract with, for the purpose of protecting the safety and privacy of a subject

4-34

of abuse and shall otherwise implement the provisions of this chapter when taking an application,

5-1

investigating a claim, pursuing subrogation or taking any other action relating to a policy or claim

5-2

involving a subject of abuse. Insurers shall distribute their written policies to employees and

5-3

insurance professionals.

5-4

     27-60.1-8. Effective Date. -- This chapter applies to all actions taken on or after the

5-5

effective date, except where otherwise explicitly stated. Nothing in this chapter shall require an

5-6

insurer or insurance professional to conduct a comprehensive search of its contract files existing

5-7

on the effective date solely to determine which applicants or insureds are subjects of abuse.

5-8

     SECTION 2. This act shall take effect upon passage.

     

=======

LC01649

========

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO INSURANCE - UNFAIR DISCRIMINATION AGAINST SUBJECTS OF

ABUSE IN PROPERTY AND CASUALTY INSURANCE

***

6-1

     This act would prohibit discrimination against victims of domestic abuse in property and

6-2

casualty insurance.

6-3

     This act would take effect upon passage.

     

=======

LC01649

=======

S0719