Chapter 04-091

2004 -- S 3057

Enacted 06/11/04

A N A C T

RELATING TO INSURANCE - COMMERCIAL SPECIAL RISKS

Introduced By: Senators Polisena, and Walaska

Date Introduced: April 22, 2004

It is enacted by the General Assembly as follows:

SECTION 1. Section 27-65-1 of the General Laws in Chapter 27-65 entitled

"Commercial Special Risks" is hereby amended to read as follows:

27-65-1. Commercial special risks. -- (a) Commercial special risks. - Notwithstanding

any other provisions of this title to the contrary and except as limited in subsection (b) of this

section, insurers shall not be required to file with, nor to receive approval from, the insurance

division of the department of business regulation for policy forms or rates used in the insurance of

commercial special risks located in this state. Commercial special risks are defined as:

(1) Risks written as commercial lines insurance, as defined in section 27-34-5(5), and

which are written on an excess or umbrella basis;

(2) Those risks, or portions of them, written as commercial lines insurance, as defined in

section 27-34-5(5), and which are not rated according to manuals, rating plans, or schedules

including "A" rates;

(3) Risks written as commercial lines insurance that employ or retain the services of a

"risk manager" and which also meet any one of the following criteria:

(i) Net worth over fifty million dollars ($50,000,000);

(ii) Net revenue/sales of over one hundred million dollars ($100,000,000);

(iii) More than five hundred (500) employees per individual company or one thousand

(1000) employees per holding company in the aggregate;

(iv) Aggregates premiums of over one hundred fifty thousand dollars ($150,000)

excluding group life, group health, workers' compensation and professional liability (including

but not limited to errors and omissions and directors and officers liability); (v) Is a not for profit,

or public entity with an annual budget or assets of at least forty-five million dollars

($45,000,000); or

(vi) Is a municipality with a population of over fifty thousand (50,000);

(4) Specifically designated commercial special risks including:

(i) All risks classified as highly protected risks as defined in section 27-5-2.1(a)(4);

(ii) All commercial insurance aviation risks;

(iii) All credit property insurance risks which are defined as "insurance of personal

property of a commercial debtor against loss, with the creditor as sole beneficiary" or "insurance

of personal property of a commercial debtor, with the creditor as primary beneficiary and the

debtor as beneficiary of proceeds not paid to the creditor". For the purposes of this definition,

"personal property" means furniture, fixtures, furnishings, appliances and equipment designed for

use in a business trade or profession and not used by a debtor for personal or household use;

(iv) All boiler and machinery risks;

(v) All inland marine risks written as commercial lines insurance as defined in section

27-34-5(5); and

(vi) All fidelity and surety risks.

(b) Notwithstanding subsection (a) of this section, the following lines of business shall

remain subject to all filing and approval requirements contained in this title even if written for

risks which qualify as commercial special risks:

(1) Life insurance;

(2) Annuities;

(3) Accident and health insurance;

(4) Automobile insurance which is mandated by statute;

(5) Workers' compensation and employers' liability insurance; and

(6) Issuance through residual market mechanisms.

the insured that forms used and rates charges are exempt from filing and approval requirements

by this subsection. Records of all such disclosures shall be maintained by the insurer.

(d) Brokers for exempt commercial policyholders as defined in subdivision (a)(3) of this

section shall be exempt from the due diligence requirements of section 27-3-38(b).

(e) Notwithstanding any other provisions of this title, the requirements of section 27-5-2

shall not apply to any policy insuring one or more commercial special risks located in this state.

SECTION 2. Section 27-5-2 of the General Laws in Chapter 27-5 entitled "Fire Insurance

Policies and Reserves" is hereby amended to read as follows:

27-5-2. Compliance with standard policy required -- Exception -- Policies written at

home office. -- Except as provided in section 27-5-9.1 and subsection 27-65-1(e), no policy or

contract of fire insurance shall be made, issued, or delivered by any insurer or by any insurance

producer or representative of an insurance producer on any property in this state, unless it shall

conform, as to all provisions, stipulations, agreements, and conditions, with the standard form of

policy. The requirement that policies shall be countersigned by an insurance producer shall not

apply to companies of this state whose policies are written at their home offices and which do not

operate on the agency plan.

SECTION 3. This act shall take effect upon passage.

=======

LC03244

=======