Chapter 066
2012 -- S 2594 SUBSTITUTE A
Enacted 05/14/12
A N A C T
RELATING TO
FINANCIAL INSTITUTIONS - DEPARTMENT OF BUSINESS
REGULATION
Introduced By: Senators Lanzi, Miller, Ruggerio, Gallo, and Walaska
Date Introduced: March 01, 2012
It is enacted by the
General Assembly as follows:
SECTION 1. Section 19-14.10-13 of the General Laws in
Chapter 19-14.10 entitled "An
Act Adopting the Federal
Secure and Fair Enforcement for Mortgage Licensing Act of 2009" is
hereby amended to read as follows:
19-14.10-13.
Enforcement authorities, violations and penalties. --
(a) In order to
ensure the effective supervision and enforcement of this
chapter the director or the director's
designee may, pursuant to chapter 42-35:
(1) Deny, suspend,
revoke, condition or decline to renew a license for a violation of this
chapter, rules or regulations issued under this chapter or
order or directive entered under this
chapter.
(2) Deny, suspend,
revoke, condition or decline to renew a license if an applicant or
licensee fails at any time to meet the requirements of section
19-14.10-6 or 19-14.10-9, or
withholds information or makes a material misstatement in an
application for a license or renewal
of a license.
(3) Order restitution
against persons subject to this chapter for violations of this chapter.
(4) Impose fines on
persons subject to this chapter pursuant to subsections (b), (c) and
(d) of this section.
(5) Issue orders or
directives under this chapter as follows:
(i)
Order or direct persons subject to this chapter to cease and desist from
conducting
business, including immediate temporary orders to cease and
desist.
(ii) Order or direct
persons subject to this chapter to cease any harmful activities or
violations of this chapter, including immediate temporary orders
to cease and desist.
(iii) Enter immediate
temporary orders to cease business under a license or interim
license issued pursuant to the authority granted under this
chapter if the director or the director's
designee determines that such license was erroneously granted
or the licensee is currently in
violation of this chapter;
(iv)
Order or direct such other affirmative action as the director or the
director's designee
deems necessary.
(2)(b)
The director or the director's designee may impose a civil penalty on a
mortgage
loan originator and any lender or loan broker licensed
under chapter 19-14 or 19-14.1 which
employs such mortgage loan originator, if the director or the
director's designee finds, on the
record after notice and opportunity for hearing, that such
mortgage loan originator has violated or
failed to comply with any requirement of this chapter or any
regulation prescribed by the director
or the director's designee under this chapter or order
issued under authority of this chapter. In
addition, the director or the director's designee may impose a
civil penalty on a lender or loan
broker licensed under chapter 19-14 or 19-14.1 which employs
any mortgage loan originator
licensed under this chapter, if the director or the director's
designee finds, on the record after
notice and opportunity for hearing, that such lender or loan
broker has violated or failed to
comply with any requirement of this chapter or any such
regulation or order.
(c)(3) The maximum amount of penalty for each act or
omission described in subsection (b)
of this section shall be twenty-five thousand five
hundred dollars ($25,000).
(d)(4)
Each violation or failure to comply with any directive or order of the director
or the
director's designee is a separate and distinct violation or
failure.
SECTION 2. Section 27-1-40.1 of the General Laws in Chapter
27-1 entitled "Domestic
Insurance Companies"
is hereby amended to read as follows:
27-1-40.1.
Mutual insurance holding companies. -- (a) Any mutual insurance company
created under the laws of this state (whether pursuant to
section 7-1-5 or by special act of the
general assembly) and any foreign mutual insurance company
which has been domesticated or
redomesticated pursuant to Chapter 2.2 of this title which meets or
exceeds all capital and surplus
funds required by law for the transaction of business in
permitted by subsection (b) of this section, reorganize into a
mutual insurance holding company
structure upon adoption of a plan of reorganization by
two-thirds (2/3) vote of the board of
directors or other governing body, approval of a plan of
reorganization by the director of the
department of business regulation, and the affirmative vote of
one half (1/2) of those members or
policyholders, constituting a quorum, present in person or by proxy
at a meeting called by the
board of directors or other governing body. Unless
otherwise provided in its charter, bylaws or in
the plan of reorganization, each member or policyholder
shall have one vote, and in the case of
any policy or contract of group life or other group
insurance, the employer or other person to
whom or in whose name the master policy or contract has
been issued shall be deemed to be the
member or policyholder and shall be entitled to one vote for
each policy or contract of group
insurance irrespective of the number of individuals insured.
(b) A plan of
reorganization of a mutual insurance company into a mutual insurance
holding company structure may provide for the reorganization
to be effected in one of the
following manners:
(1) A domestic mutual
insurance company may form a mutual insurance holding
company in accordance with the provisions of section 7-1-5
except that the approval of the plan
of reorganization by the director of the department of
business regulation shall be deemed to
constitute the approval of the director of the department of
business regulation required under
section 7-1-5. Upon this formation, the domestic mutual
insurance company shall be converted to
a stock insurance company and shall issue to the mutual
insurance holding company all of the
authorized shares of the voting stock of the stock insurance
company. The articles of
incorporation and bylaws of the mutual insurance holding company
formed in this manner shall
provide for all then current policyholders of the converted
mutual insurance company to become
members of the mutual insurance holding company and to retain
this membership interest so long
as the policyholder has a policy in force with the
converted mutual insurance company. The
articles of incorporation and bylaws of the mutual insurance
holding company also shall set forth
the terms and conditions under which future policyholders
of the stock insurance company shall
become members of the mutual insurance holding company. The
mutual insurance holding
company at all times shall retain a majority of the issued
and outstanding shares of each class of
voting stock of the stock insurance company.
(2) A domestic mutual
insurance company may merge its policyholders' membership
interests into a mutual insurance holding company previously
formed under the provisions of this
section. Upon the merger, the domestic mutual insurance
company shall be converted to a stock
insurance company and shall issue to the mutual insurance
holding company all of the authorized
shares of voting stock of the stock insurance company. In
connection with the merger and in
accordance with the articles of incorporation and bylaws of the
mutual insurance holding
company, the then current policyholders of the converted
mutual insurance company shall
become members of the mutual insurance holding company and
shall retain membership interest
so long as the policyholder has a policy in force with
the converted mutual insurance company.
The mutual insurance holding company at all times
shall retain a majority of the issued and
outstanding shares of each class of voting stock of the stock
insurance company.
(3) A domestic mutual
insurance company may establish a subsidiary stock insurance
company in accordance with the provisions of section 7-1-5
(approval of the plan of
reorganization by the director of the department of business
regulation constituting any approval
required under section 7-1-5) and then transfer to the
subsidiary stock insurance company
substantially all of its assets and liabilities. Upon this
transfer, all persons who prior to the
transfer held policy rights with respect to or other rights as
creditors of the mutual insurance
company shall have those rights solely with respect to the
subsidiary stock insurance company
created and the corresponding liability or obligation of the
mutual insurance company to those
persons shall be assumed by the subsidiary stock insurance
company. All policyholders of the
mutual insurance company at the time of the transfer of
assets and liabilities shall continue to
have a membership interest in the mutual insurance company
and the articles of incorporation and
bylaws of the mutual insurance company shall be amended to
provide this. The articles of
incorporation and bylaws of the mutual insurance company shall also
be amended to set forth the
terms and conditions under which future policyholders of
the subsidiary stock insurance company
shall become members of the mutual insurance company. The
mutual insurance company after
this shall be considered a mutual insurance holding
company for the purposes of this section and
at all times shall retain a majority of the issued and
outstanding shares of each class of voting
stock of the subsidiary stock insurance company.
(c) The plan of reorganization
shall specify in any detail as may be required by the
director of the department of business regulation the manner
under subsection (b) in which the
mutual holding company structure shall be created, the
capital structure of the stock insurance
company and the mutual insurance holding company, the
management of the stock insurance
company and the mutual insurance holding company, the
purposes for the reorganization, the
articles of incorporation and bylaws of both the mutual
insurance holding company and the stock
insurance company, and the terms of and use of proceeds from
any proposed sale of capital stock
by the stock insurance company.
(d) The corporate
existence of any mutual insurance company reorganizing into a mutual
insurance holding company structure under this section shall
not terminate, but the reorganized
institution shall be deemed to be a continuation of entity of
this reorganized mutual insurance
company.
(e) The director of the
department of business regulation may employ staff personnel as
well as professional consultants and other persons to
assist in the review of the plan of
reorganization and may hold public hearings as, in the director's
discretion, are desirable prior to
granting approval of the plan of reorganization. All
reasonable costs related to the review of the
plan of reorganization, including the costs attributable
to staff personnel and professional
consultants, shall be borne by the mutual insurance company
filing a plan of reorganization for
approval.
(f) The department of
business regulation shall issue rules and regulations implementing
this section, which shall be administered by the director
of the department of business regulation.
(g)
Subject to applicable provisions of this title, a mutual insurance holding
company
formed pursuant to this section may: (1) invest in the stock
of one or more domestic or foreign
insurance companies; (2) acquire a domestic or foreign
insurance company through consolidation
or merger of the institution with its subsidiary
insurance company; (3) merge with another mutual
insurance holding company; (4) invest in a corporation, the
purchase of the capital stock of which
is permitted for a mutual insurance company under the
laws of this state; (5) exercise any other
power or engage in any activity permitted to a mutual
insurance company organized under the
laws of this state; and (6) exercise the powers and engage
directly or indirectly in those activities
as are now or may after this be permitted for business
corporations under Chapter 1.1 of this title
7.
(h) A mutual insurance
holding company formed pursuant to this section, subsequent to
its formation, shall be subject to the provisions of Chapter
35 of this title.
SECTION 3. Section 27-10.1-2 of the General Laws in Chapter
27-10.1 entitled "Motor
Vehicle Damage
Appraisers" is hereby amended to read as follows:
27-10.1-2.
"Motor vehicle physical damage appraiser" defined. -- (a)
"Motor vehicle
physical damage appraiser" means any person, partnership,
association, or corporation that
practices as a business the appraising of damages to motor
vehicles insured under automobile
physical damage policies on or on behalf of third party claimants.
(b) A
appraiser may elect to obtain a motor vehicle physical damage
appraiser license surplus line
broker 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 motor vehicle physical damage
appraiser responsible for the business entity's compliance with
the insurance laws and rules of
this state.
SECTION 4. Section 42-14-2.1 of the General Laws in Chapter
42-14 entitled
"Department of
Business Regulation" is hereby amended to read as follows:
42-14-2.1. Reporting by certain insurers -- Settlements. -- (a)
Every insurer or entity
exempt pursuant to section 2.6 of chapter 16 of title 27 or
entity permissibly self insured pursuant
to subsection 2(c) of chapter 14.1 of title 42
providing professional liability insurance to licensed
healthcare professionals or licensed healthcare facilities shall
send a complete report to the board
of medical licensure and discipline established pursuant
to chapter 37 of title 5, or the board of
examiners in dentistry established pursuant to chapter 31.1 of
title 5 and the department of
business regulation as to any claim, notice, settlement,
judgment, or arbitration award of a claim
or action for damages for death or personal injury
caused by such person's negligence, error, or
omission in practice or his or her rendering of unauthorized
professional services. The report shall
be sent within thirty (30) days after service of such
arbitration award on the parties or notice of
the claim, settlement, judgment, or arbitration award.
(b) Notwithstanding any
other provision of law, an insurer or entity exempt pursuant to
section 2.6 of chapter 16 of title 27 or entity permissibly
self insured pursuant to subsection 2(c)
subsection (2) of
chapter 14.1 of title 42 providing professional liability coverage to licensed
healthcare professionals or licensed healthcare facilities shall
have the contractual right to settle
any claim up to the limits of the policy without the
insured's consent, unless the policy by its
express terms prohibits the insurer from settling any claim
without the consent of the insured.
(c) All insurers doing
business in the state of
section 2.6 of chapter 16 of title 27 or entity permissibly
self insured pursuant to subsection 2(c)
subsection (2) of
chapter 14.1 of title 42 providing professional liability insurance for health
care
professionals or licensed healthcare facilities shall file an
annual report with the commissioner of
insurance. This report must be filed for each year by March 1
of the next year. The information
required for each year shall include, for each rating class:
(1) The number of
insured;
(2) The total premiums
paid;
(3) The total number of
claims made, the years in which the incidents giving rise to the
claims occurred, and the total number of those claims
outstanding at the end of the year;
(4) The total amount of
claims paid, the years in which the incidents giving rise to the
claims occurred, and the amount of the costs which can be
identified with these claims for
investigation, processing, and defense of these claims; and
(5) The number of
lawsuits filed.
SECTION 5. This act shall take effect upon passage.
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LC01223/SUB A
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