2013 -- S 0377

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LC01271

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO INSURANCE -- BINDERS

     Introduced By: Senators Bates, Picard, and Walaska

     Date Introduced: February 13, 2013

     Referred To: Senate Corporations

It is enacted by the General Assembly as follows:

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

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by adding thereto the following chapter:

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     CHAPTER 9.4

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INSURANCE BINDERS AS EVIDENCE OF COVERAGE

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     27-9.4-1. Short title. -- This chapter shall be known and may be cited as the "Model Act

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Regarding Use of Property and Casualty Insurance Binders as Evidence of Coverage."

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     27-9.4-2. Purpose. -- This chapter requires that property and casualty insurance binders

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obligate coverage until a policy is issued or cancelled.

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     27-9.4-3. Definitions. -- As used in this chapter:

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     (1) "Insurance binder" means a written temporary contract of insurance authorized by an

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insurer issued prior to the insurance policy that includes:

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     (i) The name and address of the insured and any additional named insureds, mortgagees,

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or lienholders;

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     (ii) A description of the property insured;

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     (iii) A description of the nature and amount of coverage that shall be deemed to include

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the terms of the insurance policy except as conspicuously noted on the binder;

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     (iv) The identity of the insurer and of the authorized representative executing the binder;

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     (v) The effective date of coverage; and

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     (vi) The binder number or the policy number where applicable to a policy extension.

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     (2) "Insurance policy" means a contract of insurance describing the term, coverage,

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premiums, and deductibles.

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     (3) "Insured" means the person, group, or property for which an insurance policy is

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issued.

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     (4) "Insurer" means any organization that issues property or casualty insurance.

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     (5) "Lender" means an individual, partnership, corporation, association, or other entity, or

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loan servicer acting on behalf of such party, who lends money and receives or otherwise acquires

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a mortgage, a lien, a deed of trust, or any other security interest in or on any real or personal

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property as security for the loan.

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     27-9.4-4. Insurer Obligations. -- (a) An insurer that provides an insurance binder is

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obligated to provide the coverage according to the terms of such binder until the insurer issues the

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insurance policy or cancels the binder.

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     (b) An insurer shall only cancel an insurance binder in accordance with the minimum

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cancellation provisions included in the insurance policy and in accordance with regulations

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promulgated by the insurance commissioner.

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     27-9.4-5. Penalties. -- Any person or entity who violates this chapter may be fined up to

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one thousand dollars ($1,000) per violation.

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     SECTION 2. This act shall take effect on October 1, 2013.

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LC01271

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO INSURANCE -- BINDERS

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     This act would authorize the use of property and casualty insurance binders as evidence

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of coverage.

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     This act would take effect on October 1, 2013.

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LC01271

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