Chapter 434

2005 -- H 6635

Enacted 07/19/05

A N A C T

RELATING TO INSURANCE -- CASUALTY INSURANCE RATING     

Introduced By: Representative Robert B. Jacquard

Date Introduced: June 24, 2005

It is enacted by the General Assembly as follows:

     SECTION 1. Section 27-9-4 of the General Laws in Chapter 27-9 entitled "Casualty

Insurance Rating" is hereby amended to read as follows:

27-9-4. Considerations in making of rates -- Cancellation of policy. -- (a) All rates

shall be made in accordance with the following provisions:

      (1) (i) Due consideration shall be given to past and prospective loss experience within

and outside this state, to catastrophe hazards, if any, to a reasonable margin for underwriting

profit and contingencies, to dividends, savings, or unabsorbed premium deposits allowed or

returned by insurers to their policyholders, members, or subscribers, to past and prospective

expenses both country wide and those specially applicable to this state, and to all other relevant

factors within and outside this state; provided, that no consideration shall be given to:

      (A) Any loss or incident involving a bus driver, while in the course of his or her

employment for the Rhode Island public transit authority or private or municipal school bus

companies, in establishing or maintaining that driver's rate respecting the operation of a personal

motor vehicle or vehicles;

      (B) Any loss or incident involving a law enforcement officer, while in the course of his

or her employment for the state, city, or town police departments, or federal law enforcement

agency, in establishing or maintaining that driver's rate respecting the operation of a personal

motor vehicle or vehicles; and

      (C) Any loss or incident involving a commercial vehicle driver, while in the course of

his or her employment, in establishing or maintaining that driver's rate respecting the operation of

a personal motor vehicle(s);

      (ii) It shall be the responsibility of a commercial vehicle driver to provide his or her

insurance company with proof that the loss or incident took place in the course of employment

while operating a commercial vehicle. For the purposes of this section, a "commercial vehicle"

shall be a motor vehicle with a gross weight in excess of ten thousand (10,000) pounds or a motor

vehicle used for public livery;

      (2) The systems of expense provisions included in the rates for use by any insurer or

group insurers may differ from those of other insurers or groups of insurers to reflect the

requirements of the operating methods of any insurer or group with respect to any kind of

insurance, or with respect to any subdivision or combination of insurance for which subdivision

or combination separate expense provisions are applicable;

      (3) Risks may be grouped by classifications for the establishment of rates and minimum

premiums;

      (4) Rates shall not be excessive, inadequate, or unfairly discriminatory; and

      (5) In establishing or maintaining an insured's rate or classification respecting the

operation of a personal motor vehicle, any insured sixty-five (65) years of age or older, who

meets the criteria set forth in this section and has not had any chargeable accidents or moving

violations within three (3) years preceding the establishment of the rate of insurance or

classification, shall not be penalized solely by reason of their age.

      (b) No insurance company shall fail to renew a private passenger automobile policy

because of a loss of occurrence only, unless a chargeable loss occurrence of one thousand dollars

($1,000) or more than two (2) nonchargeable loss occurrences, involving the insured, have taken

place within the annual policy year.

      (c) (1) No insurance company shall fail to renew a private passenger automobile policy

solely because the insured has attained the age of sixty-five (65) years or older;

      (2) Whenever the commissioner of insurance shall have reason to believe that any

insurance company has refused to renew a private passenger automobile policy solely because the

applicant has reached the age of sixty-five (65) years or older, the commissioner shall notify the

company that it may be in violation of this section and in his or her discretion he or she may

require a hearing to determine whether or not the company has actually been engaged in the

practice stated in this subsection. Any hearing held under this section shall in all respects comply

with the hearing procedure provided in the Administrative Procedures Act, chapter 35 of title 42;

      (3) If after the hearing the commissioner shall determine that the company has engaged

in the practice of systematically failing to renew private passenger automobile policies because of

the advanced age of the insured, he or she shall reduce his or her findings to writing and shall

issue and cause to be served upon the company an order to cease and desist from engaging in

those practices. After the issuance of the cease and desist order, if the commissioner finds that the

company has continued to engage in those practices, he or she shall impose upon the company a

fine not to exceed the amount of one thousand dollars ($1,000) for each separate violation.

      (4) Any company aggrieved by any order or decision of the commissioner of insurance

may appeal the order and decision to the superior court of Providence in accordance with the

Administrative Procedures Act, chapter 35 of title 42.

      (d) No insurance group, carrier or company in establishing any premium surcharge or

penalty relative to a specific motor vehicle policy, shall consider any accident or any claim where

any insured covered by that policy is fifty percent (50%) or less at fault.

      (e) No insurance group, carrier or company shall assess any premium surcharge against

any insured covered by a motor vehicle policy where a property damage claim payment is less

than one thousand dollars ($1,000).

SECTION 2. This act shall take effect upon passage.     

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LC03586

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