Chapter 099

2013 -- S 0719 SUBSTITUTE A

Enacted 06/18/13

A N A C T

RELATING TO INSURANCE - UNFAIR DISCRIMINATION AGAINST SUBJECTS OF

ABUSE IN PROPERTY AND CASUALTY INSURANCE

Introduced By: Senators Gallo, and Lynch

Date Introduced: March 13, 2013

It is enacted by the General Assembly as follows:

SECTION 1. Title 27 of the General Laws entitled "INSURANCE" is hereby amended

by adding thereto the following chapter:

CHAPTER 60.1

UNFAIR DISCRIMINATION AGAINST SUBJECTS OF ABUSE IN PROPERTY AND

CASUALTY INSURANCE

27-60.1-1. Short title. -- This chapter shall be known and may be cited as the "Unfair

Discrimination Against Subjects of Abuse in Property and Casualty Insurance Act."

27-60.1-2. Purpose. -- The purpose of this chapter is to prohibit unfair discrimination by

property and casualty insurers and insurance professionals on the basis of abuse status. Nothing in

this chapter shall be construed to create or imply a private cause of action for a violation of this

chapter.

27-60.1-3. Scope. -- This chapter applies to all property and casualty insurers and

insurance professionals involved in issuing or renewing, in this state, a policy of property and

casualty insurance.

27-60.1-4. Definitions. -- For the purposes of this chapter:

(1) “Abuse” means the occurrence of one or more of the following acts by a current or

former family member, household member, intimate partner or caretaker :

(i) Attempting to cause or intentionally, knowingly or recklessly causing another person

bodily injury, physical harm, severe emotional distress, psychological trauma, rape, sexual assault

or involuntary sexual intercourse;

(ii) Knowingly engaging in a course of conduct or repeatedly committing acts toward

another person including following the person without proper authority, under circumstances that

place the person in reasonable fear of bodily injury or physical harm;

(iii) Subjecting another person to false imprisonment; or

(iv) Attempting to cause or intentionally, knowingly, or recklessly causing damage to

property so as to intimidate or attempt to control the behavior of another person.

(2) “Abuse-related claim” means a claim under a property and casualty policy for a loss

resulting from an act of abuse.

(3) “Abuse status” means the fact or perception that a natural person is, has been, or may

be a subject of abuse, irrespective of whether the natural person has incurred abuse-related

claims.

(4) “Commissioner” means the director of the department of business regulation or his or

her designee.

(5) “Confidential abuse information” means information about acts of abuse or abuse

status of a subject of abuse, the address and telephone number (home and work) of a subject of

abuse or the status of an applicant or insured as a family member, employer or associate of, or a

person in a relationship with, a subject of abuse.

(6) “Insurance professional” means a producer, broker, adjuster or third-party

administrator as defined in the insurance laws of this state.

(7) “Insured” means the party named on a policy or certificate as the individual with legal

rights to the benefits provided by such policy.

(8) “Insurer” means a person or other entity engaged in the business of property and

casualty insurance in this state including all residual market mechanisms.

(9) “Policy” means a contract of insurance, including endorsements, riders or binders

issued, proposed for issuance, or intended for issuance by an insurer or insurance professional.

(10) “Subject of abuse” means a natural person against whom an act of abuse has been

directed; who has current or prior injuries, illnesses or disorders that resulted from abuse; or who

seeks, may have sought or had reason to seek medical or psychological treatment for abuse; or

protection, court-ordered protection or shelter from abuse.

27-60.1-5. Unfairly discriminatory acts relating to property and casualty insurance.

-- (a) It is unfairly discriminatory to deny, refuse to issue, renew or reissue; to cancel or otherwise

terminate; restrict or exclude coverage on or to add a premium differential to a property and

casualty insurance policy on the basis of the applicant’s or insured’s abuse status.

(b) It is unfairly discriminatory to:

(1) Exclude or limit payment for a covered loss or deny a covered claim incurred as a

result of abuse by a person other than a co-insured; or

(2) Use exclusions or limitations on coverage which the commissioner has determined by

regulation promulgated pursuant to this chapter unreasonably restrict the ability of subjects of

abuse to be indemnified for losses.

(c) This section shall not require payment in excess of the loss or policy limits.

(d) Nothing in this chapter shall be construed to prohibit an insurer or insurance

professional from applying reasonable standards of proof to claims under this section.

(e) When the insurer or insurance professional has information in its possession that

clearly indicates that the insured, applicant or claimant is a subject of abuse, it is unfairly

discriminatory, by a person employed by or contracting with an insurer, to disclose or transfer

confidential abuse information, as defined in this chapter, for any purpose or to any person,

except:

(1) To the subject of abuse or an individual specifically designated in writing by the

subject of abuse;

(2) When ordered by the commissioner or a court of competent jurisdiction or otherwise

required by law;

(3) When necessary for a valid business purpose to transfer information that includes

confidential abuse information that cannot reasonably be segregated without undue hardship,

confidential abuse information may be disclosed only if the recipient has executed a written

agreement to be bound by the prohibitions of this chapter in all respects and to be subject to the

enforcement of this chapter by the courts of this state for the benefit of the applicant or the

insured, and only to the following persons:

(i) A reinsurer that seeks to indemnify or indemnifies all or any part of a policy covering

a subject of abuse and that cannot underwrite or satisfy its obligations under the reinsurance

agreement without that disclosure;

(ii) A party to a proposed or consummated sale, transfer, merger or consolidation of all or

part of the business of the insurer or insurance professional;

(iii) Medical or claims personnel contracting with the insurer or insurance professional,

only where necessary to process an application or perform the insurer’s or insurance

professional’s duties under the policy or to protect the safety or privacy of a subject of abuse (also

includes parent or affiliate companies of the insurer or insurance professional that have service

agreements with the insurer or insurance professional); or

(iv) With respect to address and telephone number, to entities with whom the insurer

transacts business when the business cannot be transacted without the address and telephone

number;

(4) To an attorney who needs the information to represent the insurer or insurance

professional effectively, provided the insurer or insurance professional notifies the attorney of its

obligations under this chapter and requests that the attorney exercise due diligence to protect the

confidential abuse information consistent with the attorney’s obligation to represent the insurer or

insurance professional; or

(5) To any other entities deemed appropriate by the commissioner.

(f) It is unfairly discriminatory to request information relating to acts of abuse or an

applicant’s or insured’s abuse status, or to make use of that information, however obtained,

except for the limited purposes of complying with legal obligations or verifying a person’s claim

to be a subject of abuse.

(g) Paragraph (e) does not preclude a subject of abuse from obtaining his or her

insurance records.

(h) Paragraph (f) above does not prohibit a property and casualty insurer from asking an

applicant or insured about a property and casualty claim, even if the claim is abuse-related, or

from using information thereby obtained in evaluating and carrying out its rights and duties under

the policy, to the extent otherwise permitted under this chapter and other applicable law.

27-60.1-6. Justification of Adverse Insurance Decisions. -- An insurer or insurance

professional that takes an action not prohibited by section 27-60.1-5 that adversely affects an

applicant or insured on the basis of claim or other underwriting information that the insurer or

insurance professional knows or has reason to know is abuse-related shall explain the reason for

its action to the applicant or insured in writing and shall be able to demonstrate that its action, and

any applicable policy provision:

(1) Does not have the purpose of treating abuse status as an underwriting criterion; and

(2) Is otherwise permissible by law and applies in the same manner and to the same

extent to all applicants and insureds with a similar claim or claims history without regard to

whether the claims are abuse-related.

27-60.1-7. Insurance Protocols for Subjects of Abuse. -- Insurers shall develop and

adhere to written policies specifying procedures to be followed by employees and by insurance

professionals they contract with, for the purpose of protecting the safety and privacy of a subject

of abuse and shall otherwise implement the provisions of this chapter when taking an application,

investigating a claim, pursuing subrogation or taking any other action relating to a policy or claim

involving a subject of abuse. Insurers shall distribute their written policies to employees and

insurance professionals.

27-60.1-8. Effective Date. -- This chapter applies to all actions taken on or after the

effective date, except where otherwise explicitly stated. Nothing in this chapter shall require an

insurer or insurance professional to conduct a comprehensive search of its contract files existing

on the effective date solely to determine which applicants or insureds are subjects of abuse.

SECTION 2. This act shall take effect upon passage.

=======

LC01649/SUB A

=======