Chapter
05-069
2005 -- S 0489
Enacted 06/22/05
A N A C T
RELATING TO INSURANCE
Introduced By: Senator David E. Bates
Date Introduced: February 10, 2005
It is enacted by the General
Assembly as follows:
SECTION
1. Chapter 27-29 of the General Laws entitled "Unfair Competition and
Practices"
is hereby amended by adding thereto the following sections:
27-29-13.1.
Late payment of premium. – An insurer may levy and collect a maximum
fee
or charge of ten dollars ($10.00) for any late payment of premium by a
policyholder for any
property,
casualty, fire and marine or liability policy of insurance. A late fee may not
be imposed
unless
payment is received more than five (5) business days following the date payment
is due.
27-29-13.2.
Cancellation provisions for return of unearned premium. – Every
insurance
policy issued and approved for use in Rhode Island shall provide clear language
on the
method
of calculation of the unearned premium portion to be returned to the insured if
the policy
is
cancelled. Insurance policies shall not state "refer to manuals" to
determine the amount of
unearned
premium to be returned. Insurers shall not impose cancellation fees when
insurance
policies
are cancelled using short rate tables.
SECTION
2. Section 27-29-16 of the General Laws in Chapter 27-29 entitled "Unfair
Competition
and Practices" is hereby repealed.
27-29-16.
Written notice to claimants of payment of claim in settlements. --
Upon
payment
of five thousand dollars ($5,000) or more in settlement of any liability claim,
the insurer
shall
cause written notice of the payment to be mailed to the claimant, at the same
time payment
is
made, by the insurer or its representative, including the insurer's attorney,
to the claimant's
attorney
or other representative of the claimant by draft, check, or otherwise.
SECTION
3. Chapter 27-7 of the General Laws entitled "Liability Insurance" is
hereby
amended
by adding thereto the following section:
27-7-7.
Written notice to claimants of payment of claim in settlements. – Upon
payment
of five thousand dollars ($5,000) or more in settlement of any liability claim,
the insurer
shall
cause written notice of the payment to be mailed to the claimant, at the same
time payment
is
made by the insurer or its representative, including the insurer's attorney, to
the claimant's
attorney
or other representative of the claimant by draft, check, or otherwise.
SECTION
4. Chapter 27-9.1 of the General Laws entitled "Unfair Claims Settlement
Practices
Act" is hereby amended by adding thereto the following section:
27-9.1-4.1.
Amounts received in settlement of claims retained for unpaid premiums.
– (a) Any insurance company or insurance producer
may retain an amount equal to any unpaid
premiums
due on the policy under which a claim is being presented when settling any
presented
claim
for an insured; provided, that:
(1)
The unpaid premium remains unpaid sixty (60) days after the effective date of
the
policy
or the date of the original billing of the premium, whichever occurs later;
(2)
The insurance company shall pay to the insurance producer, upon written
documentation
submitted by the insurance agent or broker of the unpaid premium due, the
amount
equal to the unpaid premium due the insurance produce from the amount of the
claim
being
presented and the balance of the claim be paid to the insured and/or loss payee
or
mortgagee
named in the policy.
(b)
This section shall not apply to any health insurance policy within the state.
SECTION
5. Section 27-10-15 of the General Laws in Chapter 27-10 entitled "Claim
Adjusters"
is hereby repealed.
27-10-15.
Amounts received in settlement of claims retained for unpaid premiums. --
(a)
Any insurance company or insurance producer may retain an amount equal to any
unpaid
premiums
due on the policy under which a claim is being presented when settling any
presented
claim
for an insured; provided, that:
(1) The unpaid premium remains unpaid sixty (60) days after the effective day
of the
policy
or the date of the original billing of the premium, whichever occurs later;
(2) The insurance company shall pay to the insurance producer, upon written
documentation
submitted by the insurance agent or broker of the unpaid premium due, the
amount
equal to the unpaid premium due the insurance producer from the amount of the
claim
being
presented and the balance of the claim be paid to the insured and/or loss payee
or
mortgagee
named in the policy.
(b) This section shall not apply to any health insurance policy within the
state.
SECTION 6. This act shall take effect on January 1, 2006.
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LC01698
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