Introduced By: Representatives Lima and Long
Date Introduced : February 3, 1998
Referred To: Committee on Corporations
It is enacted by the General Assembly as follows:
SECTION 1. Section 27-29-14 of the General Laws in Chapter 27-29 entitled "Unfair Competition and Practices" is hereby amended to read as follows:
27-29-14. Payment of premium -- Cancellation. -- Notwithstanding the provisions of chapter 40 of title 27 private passenger motor vehicle insurance policyholders on twelve (12) month policies shall have the option of paying any policy premiums in installment payments provided that the insurance may require a payment of fifteen percent (15%) of the annual premium at time of issuance with the balance to be paid in nine (9) subsequent and equal monthly installments thereafter. The insurer may levy a service charge of up to three dollars ($3.00) per installment period against those policyholders who choose this option. Policyholders shall be entitled to receive no less than thirty (30) days notice before a cancellation of an automobile insurance policy for any reason except nonpayment of premium, in which instance policyholders shall be entitled to receive no less than ten (10) days notice.
{ADD Provided further, that no insurer shall be able to cancel an automobile insurance policy for any reason without first giving notice of the proposed cancellation to the state registry, division of safety and responsibility, said notice to be given at least ten (10) days before the proposed date of cancellation. Failure to provide such notice shall render any proposed cancellation by the insurer invalid and void. ADD}
SECTION 2. Section 31-47-4 of the General Laws in Chapter 31-47 entitled "Motor Vehicle Reparations Act" is hereby amended to read as follows:
31-47-4. Notice of termination. -- No contract of insurance or renewal thereof shall be terminated by cancellation or failure to renew by the insurer until at least thirty (30) days after mailing to the named insured, at the address shown on the policy a notice of termination or cancellation by certificate of mailing, except that when cancellation is for nonpayment of premium such notice shall be mailed to the named insured at the address shown on the policy at least ten (10) days prior to the effective date of cancellation. Time of the effective date and hour of termination stated in the notice shall become the end of the policy period. Every notice of termination for any cause whatsoever sent to the insured shall include in type of which the face shall not be smaller than twelve (12) point, a statement that financial security is required to be maintained continuously throughout the registration period and that failure to maintain financial security shall subject the violator to a mandatory suspension of license and registration.
{ADD Provided further, that no insurer shall be able to terminate by cancellation an automobile insurance policy for any reason without first giving notice of the proposed cancellation to the state registry, division of safety and responsibility, said notice to be given at least ten (10) days before the proposed date of cancellation. Failure to provide such notice shall render any proposed cancellation by the insurer invalid and void. ADD}
SECTION 3. This act shall take effect upon passage.
This act would require insurance companies to provide at least ten days notice to the registry prior to the cancellation of a motor vehicle operator's insurance policy.
This act would take effect upon passage.
