Chapter 138
2006 -- H 7651
Enacted O6/16/06
A N A C T
RELATING
TO INSURANCE -- COMMERCIAL SPECIAL RISKS
Introduced
By: Representative Brian P. Kennedy
Date
Introduced: February 16, 2006
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) ten million dollars ($10,000,000);
(ii) Net
revenue/sales of over one hundred million dollars ($100,000,000) five
million
dollars ($5,000,000);
(iii) More than five
hundred (500) twenty-five (25) employees per individual company
or one thousand (1000) fifty (50)
employees per holding company in the aggregate;
(iv) Aggregates
premiums of over one hundred fifty thousand dollars ($150,000) thirty
thousand dollars ($30,000) 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) twenty-five million
dollars ($25,000,000); or
(vi) Is a
municipality with a population of over fifty thousand (50,000) twenty
thousand
(20,000);
(4) Specifically
designated commercial special risks including:
(i) All risks
classified as highly protected risks.
Highly protected
risk shall mean a fire resistive building that meets the highest standards
of fire safety according to insurance company
underwriting requirements;
(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. This
act shall take effect upon passage.
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LC01878
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