Chapter 07-443

Chapter 443

2007 -- S 0235

Enacted 07/07/07

A N A C T

RELATING TO INSURANCE -- AGENTS, BROKERS AND SOLICITORS

Introduced By: Senator Leo R. Blais

Date Introduced: February 07, 2007

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~~ a property and casualty insurance producer 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.

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~~ at the time of the

insurance producer license renewal, 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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LC01122

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