Chapter
131
2007 -- H 6503 SUBSTITUTE B
Enacted 06/27/07
A N A C T
RELATING
TO INSURANCE -- FIRE INSURANCE POLICIES AND RESERVES
Introduced
By: Representatives Crowley, Shanley, Walsh, Jackson, and Kennedy
Date
Introduced: June 07, 2007
It is enacted by the General Assembly as
follows:
SECTION 1. Chapter
27-5 of the General Laws entitled "Fire Insurance Policies and
Reserves" is hereby amended by adding
thereto the following section:
27-5-3.8.
Rhode Island commission on hurricane loss projection methodology. –
(1) Legislative findings and intent.
-- (a) Reliable projections of hurricane losses are necessary
in order to assure that rates for residential
property insurance meet the statutory requirement that
rates be neither excessive nor inadequate.
(b) The
general assembly recognizes the need for expert evaluation of computer models
and other recently developed or improved
actuarial methodologies for projecting hurricane losses,
in order to resolve conflicts among actuarial
professionals, and in order to provide both
immediate and continuing improvement in the
sophistication of actuarial methods used to set
rates charged to consumers.
(c) It
is the intent of the general assembly to create the Rhode Island commission on
hurricane loss projection methodology as a panel
of experts to provide the most actuarially
sophisticated guidelines and standards for
projection of hurricane losses possible, given the
current state of actuarial science.
(2) Commission
created.-- (a) There is created the Rhode Island commission on
hurricane loss projection methodology. For the
purposes of this section, the term "commission"
means the Rhode Island commission on hurricane
loss projection methodology. The commission
shall be administratively housed within the
department of administration, but it shall
independently exercise the powers and duties
specified in this section.
(b) The
commission shall consist of the following eight (8) members:
(1) The
director of business regulation, acting as the administrator of insurance, or
designee;
(2) The
adjutant general of the Rhode Island emergency management agency;
(3) A
member of the board of directors of the Rhode Island Joint reinsurance
Association
appointed by the governor;
(4) Five (5)
members directly appointed by the governor, as follows:
(A) An actuary
who is employed full-time by a property and casualty insurer which was
responsible for at least one percent of the aggregate
statewide direct written premium for
homeowner's insurance in the calendar year
preceding the member's appointment to the
commission;
(B) An
expert in insurance finance who has a background in actuarial science;
(C) An
expert in statistics who has a background in insurance;
(D) An
expert in computer system design.
(E) An
expert in meteorology who specializes in hurricanes.
(c) Members
designated under subparagraphs (b)(1)-(4) shall serve on the commission as
long as they maintain the respective offices
designated in subparagraphs (b)(1)-(4). Members
under subparagraph (b)(5)(A)-(E) shall serve for
a term of three (3) years, and may be
reappointed to the commission. All members may
be removed by the governor prior to the
expiration of their term, for cause. Vacancies
on the commission shall be filled in the same
manner as the original appointment.
(d) The
governor shall annually appoint one of the members of the commission to serve
as chair.
(e) Members
of the commission shall serve without compensation, but shall be
reimbursed for per diem and travel expenses.
(f) There
shall be no liability on the part of, and no cause of action of any nature
shall
arise against, any member of the commission for
any action taken in the performance of their
duties under this section. In addition, the
commission may, in writing, waive any potential cause
of action for negligence of a consultant,
contractor, or contract employee engaged to assist the
commission.
(3) Adoption
and effect of standards and guidelines.-- (a) The commission shall
consider any actuarial methods, principles,
standards, models, or output ranges that have the
potential for improving the accuracy of or
reliability of the hurricane loss projections used in
residential property insurance rate filings. The
commission shall, from time to time, adopt
findings as to the accuracy or reliability of
particular methods, principles, standards, models, or
output ranges.
(b) The
commission shall adopt revisions to previously adopted actuarial methods,
principles, standards, models, or output ranges
at least annually.
(c) A
trade secret that is used in designing and constructing a hurricane loss model
and
that is provided pursuant to this section, by a
private company, to the commission, is confidential
and shall not be deemed a public record pursuant
to the provisions of chapter 38-2.
(2) That
portion of a meeting of the commission or of a rate proceeding on an insurer's
rate filing at which a trade secret made
confidential and exempt by this paragraph is discussed
shall be deemed confidential and not open to
disclosure pursuant to the open meetings act, but
may be discussed at a closed meeting as provided
for in chapter 42-46..
(3) The
Rhode Island commission is hereby authorized to form a multi-state commission
with the states of Massachusetts, Connecticut
and any other interested state in furtherance of the
goals of this act.
SECTION 2. This
act shall take effect on January 1, 2008.
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LC03228/SUB B
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