Chapter 025
2011 -- S 0510
Enacted 05/27/11
A N A C T
RELATING TO
INSURANCE -- PRODUCER LICENSING ACT -- LIFE AND HEALTH REINSURANCE AGREEMENTS
-- COMMERCIAL SPECIAL RISKS
Introduced By: Senators Lanzi, and Bates
Date Introduced: March 10, 2011
It is enacted by the
General Assembly as follows:
SECTION 1. Section 27-2.4-8 of the General Laws in Chapter
27-2.4 entitled "Producer
Licensing Act" is
hereby amended to read as follows:
27-2.4-8.
Application for license. -- (a) A person applying
for a resident insurance
producer license shall make application to the insurance
commissioner on the uniform application
and declare under penalty of refusal, suspension or
revocation of the license that the statements
made in the application are true, correct and complete to
the best of the individual's knowledge
and belief. Before approving the application, the
insurance commissioner shall find that the
individual:
(1) Is at least
eighteen (18) years of age;
(2) Has not committed
any act that is a ground for denial, suspension or revocation set
forth in section 27-2.4-14;
(3) Has completed a prelicensing course of study for the lines of authority for
which the
person has applied unless exempted in writing, for good
cause, from the requirement by the
department;
(4) (3) Has paid the fees set forth in section 27-2.4-4; and
(5) (4) Has successfully passed the examinations for the lines of
authority for which the
person has applied.
(b) A
obtain an insurance producer license. Application shall be
made using the uniform business entity
application. Prior to approving the application, the commissioner
shall find both of the following:
(1) The business entity
has paid the appropriate fees.
(2) The business entity
has designated a licensed producer responsible for the business
entity's compliance with the insurance laws and rules of this
state.
(c) The insurance
commissioner may require any documents reasonably necessary to
verify the information contained in an application.
(d) Each insurer that
sells, solicits or negotiates any form of limited line credit insurance
shall provide to each individual whose duties will include
selling, soliciting or negotiating limited
line credit insurance a program of instruction that may be
approved by the insurance
commissioner.
SECTION 2. Section 27-5-2 of the General Laws in Chapter
27-5 entitled "Fire Insurance
Policies and Reserves"
is hereby amended to read as follows:
27-5-2. Compliance
with standard policy required -- Exception -- Policies written at
home office. Compliance with standard policy required. -- Except as provided in section 27-5-
9.1 and subsection
27-65-1(e), no policy or contract of fire insurance shall be made, issued, or
delivered by any insurer or by any insurance producer or
representative of an insurance producer
on any property in this state, unless it shall conform,
as to all provisions, stipulations, agreements,
and conditions, with the standard form of policy. The
requirement that policies shall be
countersigned by an insurance producer shall not apply to companies
of this state whose policies
are written at their home offices and which do not
operate on the agency plan.
SECTION 3. 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) as
insurance issued for purposes other than for personal, family
or household, 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) as
insurance issued for purposes other than for personal, family or household,
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 ten million dollars ($10,000,000);
(ii) Net revenue/sales
of over five million dollars ($5,000,000);
(iii) More than
twenty-five (25) employees per individual company or fifty (50)
employees per holding company in the aggregate;
(iv)
Aggregates premiums of over 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 twenty-
five million dollars ($25,000,000); or
(vi) Is a municipality
with a population of over twenty thousand (20,000);
(4) Specifically
designated commercial special risks including:
(i)
All risks classified as highly protected risks.
"Highly protected
risk" means 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) as
insurance issued for purposes other than for personal, family or household,; and
(vi) All fidelity and
surety risks.; and
(vii) All crime and
burglary and theft 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 4. Chapter 27-4.2 of the General Laws entitled
"Life and Health Reinsurance
Agreements Act" is
hereby amended by adding thereto the following section:
27-4.2-7.
Existing agreements. – Insurers subject to this
act shall reduce to zero by
December 31, 1997 any reserve credits or assets
established with respect to reinsurance
agreements entered into prior to the effective date of this act
which, under the provisions of this
act would not be entitled to recognition of the reserve
credits or assets; provided, however, that
the reinsurance agreements shall have been in compliance
with laws or regulations in existence
immediately preceding the effective date of this act.
SECTION 5. This act shall take effect upon passage with the exception
of Section 1,
which shall take effect on January 1, 2012.
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LC01254
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