Chapter 320
2004 -- H 8438
Enacted 07/03/04
A N A C T
RELATING
TO INSURANCE - COMMERCIAL SPECIAL RISKS
Introduced
By: Representative Gordon D. Fox
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.
(c) Any insurer which provides coverage to a commercial special risk shall
disclose to
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.
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LC03188
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