Title 31
Motor and Other Vehicles

Chapter 47
Motor Vehicle Reparations Act

§ 31-47-1.1. Legislative findings and intent.

WHEREAS, the General Assembly has conducted extensive hearings on the issue of mandatory automobile insurance and finds that:

(1) Mandatory automobile liability insurance will not guarantee that all drivers will carry automobile liability insurance and in other states with mandatory automobile insurance nearly twenty percent (20%) to twenty-five percent (25%) of drivers do not comply with the state mandate and drive without insurance;

(2) Because of the evidence described in subdivision (1), Rhode Island drivers will need to carry additional insurance, to protect themselves from harm by uninsured motorists;

(3) All presently uninsured drivers who try to acquire automobile insurance will be placed in the assigned risk pool regardless of a good driving record, at an excessive rate;

(4) The state of Rhode Island ranks the eighth (8th) highest in the country for the cost of automobile insurance litigation per capita, this high cost of legal action adds to the already high cost of automobile insurance;

(5) No-fault insurance can reduce the cost of automobile insurance by reducing litigation and right-to-sue, but evidence also indicates that no-fault insurance can increase the cost of insurance if not properly enacted;

(6) A proposed rate increase in the Rhode Island Auto Insurance Plan of thirty-four percent (34%) has been granted without full disclosure by insurance companies of their investments, profits, losses, administrative costs and other pertinent information to justify the rate increase;

(7) Fraud, theft and inflated automobile repair costs are significant elements of the increased cost of automobile insurance which must be reduced;

(8)(i) The Governor of the state has agreed to immediately institute a blue ribbon task force to investigate the causes for the high cost of automobile insurance, recommend remedies to reduce the cost of automobile insurance and prepare legislation for introduction. The scope of the task force shall include, but not be limited to, the reviewing of:

(A) Procedures and processes concerning claims, appraisals, adjustments and auto repair charges,

(B) Costs of litigation, including the imposition of ceiling or caps on legal fees,

(C) Disclosure by insurance companies of all costs to do business, including those that affect premium rates,

(D) Enforcement and restitution procedures.

(ii) The task force shall make specific recommendations to the general assembly pertaining to the alternatives of no-fault insurance, traditional liability and so-called “choice” legislation which provides an option of no-fault or traditional liability insurance.