Chapter
632
2006 -- S 2735
Enacted 07/14/06
A N A
C T
RELATING TO INSURANCE
-- SURPLUS LINES
Introduced By: Senators
Bates, and Walaska
Date Introduced: February
14, 2006
It is
enacted by the General Assembly as follows:
SECTION
1. Section 27-3-38 of the General Laws in Chapter 27-3 entitled "Agents,
Brokers,
and Solicitors" is hereby amended to read as follows:
27-3-38.
Surplus line brokers -- License -- Affidavit of inability to obtain insurance -
- Records
-- Premium tax -- Notice to purchasers. -- (a) The insurance commissioner may issue
a
surplus line broker's license to any person, firm, or corporation who or which
is licensed as an
insurance
agent in this state, authorizing the licensee to procure, subject to the
restrictions
provided
in this section, policies of insurance, except life and health and accident,
from insurers
which
are on the commissioner's list of approved surplus insurers in this state. This
license may
be
suspended or revoked by the insurance commissioner whenever, in the
commissioner's
judgment,
a suspension or revocation will best promote the interest of the people of this
state.
Before
any license is issued by the insurance commissioner and before each renewal of
a license,
there
shall be filed in his or her office a written application by the person, firm,
or corporation
desiring
the license in the form or forms and supplements to the form, and containing
any
information,
that the insurance commissioner may prescribe.
(b) When any policy of insurance is procured under the authority of that
license, there
shall be
executed, both by the licensee and by the insured, affidavits setting forth
facts showing
that the
insured or a licensed Rhode Island producer were unable, after diligent effort,
to procure
from no
less than three (3) authorized insurers the full amount of insurance required
to protect the
property
owned or controlled by the insured or the risks insured. Provided, however
the
aforementioned
affidavit shall not be required when insuring the following interest: amusement
parks
and devices, environmental improvement and/or remediation sites, vacant
property or
property
under renovation, demolition operations, event cancellation due to weather, railroad
liability,
discontinued products, fireworks and pyrotechnics, warehouseman's legal
liability,
excess
property coverage, and contingent liability. For purposes of this section, residual market
mechanisms
shall not be considered authorized insurers. These affidavits shall be filed by
the
licensee
with the insurance commissioner within sixty (60) days after the policies have
been
procured
and the insurance commissioner, if not satisfied with the affidavits, may order
the
licensee
to take any further action to obtain the insurance from authorized insurers
that he or she
may deem
necessary. Notwithstanding the provisions of this subsection, for any policy
renewed,
continued,
or extended by the same insurer, no affidavit shall be required to be filed by
a licensee
with the
commissioner, for any policy of insurance or coverage under a policy procured
by the
licensee,
for which the licensee has previously filed an affidavit. Prior to renewing,
continuing, or
extending
any policy, the licensee surplus line broker must confirm that the insurer is
on the
insurance
commissioner's list of approval surplus line insurers in this state.
(c) The licensee shall keep a complete and separate record of all policies
procured from
approved
surplus lines insurers under the license and these records shall be open to the
examination
of both the insurance commissioner and tax administrator at all reasonable
times,
and
shall show the exact amount of each kind of insurance permitted under this
section which has
been
procured for each insured, the gross premiums charged by the insurers for each
kind of
insurance
permitted under this section which were returned to each insured, the name of
the
insurer
or insurers which issued each of these policies, the effective dates of these
policies, and
the
terms for which these policies were issued.
(d) Every person, firm, or corporation licensed pursuant to the provisions of
this section
shall
file with the insurance commissioner, not later than April 1 of each year, a
certificate of the
tax
administrator, on a blank furnished by the insurance commissioner, certifying
that the licensee
has paid
to the tax administrator, for all policies procured by the licensee pursuant to
the license
during
the next preceding calendar year, a tax, computed at the rate of three percent
(3%) on the
gross
premiums charged the insured by the insurers, less the amount of premiums
returned to the
insured.
(e) Every application form for insurance from a surplus lines insurer, every
affidavit
form
executed by the insured, and every policy (on its front and declaration pages)
issued by the
surplus
lines insurer, shall contain in ten (10) point type the following notice:
NOTICE
THIS INSURANCE CONTRACT HAS BEEN PLACED WITH AN INSURER NOT
LICENSED
TO DO BUSINESS IN THE STATE OF RHODE ISLAND BUT APPROVED AS
A
SURPLUS LINES INSURER. THE INSURER IS NOT A MEMBER OF THE RHODE
ISLAND
INSURERS INSOLVENCY FUND. SHOULD THE INSURER BECOME
INSOLVENT,
THE PROTECTION AND BENEFITS OF THE RHODE ISLAND INSURERS
INSOLVENCY
FUND ARE NOT AVAILABLE.
SECTION
2. This act shall take effect upon passage.
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LC01528
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