2025 -- S 0015

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LC000431

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2025

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A N   A C T

RELATING TO INSURANCE-CASUALTY INSURANCE GENERALLY-LIMITATIONS ON

POLICY CANCELLATIONS AND RENEWALS

     Introduced By: Senators Gu, Britto, Sosnowski, Tikoian, Gallo, Kallman, Bell, DiMario,
and Mack

     Date Introduced: January 23, 2025

     Referred To: Senate Commerce

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 27-8-11 of the General Laws in Chapter 27-8 entitled "Casualty

Insurance Generally" is hereby amended to read as follows:

     27-8-11. Regulations on cancellation and renewal.

     (a) In addition to, and not in lieu of, any other power the commissioner has to issue rules

and regulations, the commissioner of insurance may promulgate, in accordance with the procedure

established in chapter 35 of title 42, reasonable rules and regulations concerning cancellation and

renewal of liability and property damage insurance for automobiles rated as private passenger

automobiles, homeowners insurance, residential fire insurance, or any components thereof. Those

regulations may require that the insurer shall furnish to the named insured the reason, or reasons,

for cancellation or nonrenewal. Those regulations shall also require that the insurer furnish, at least

thirty (30) days prior to renewal, written notice of any coverage reductions, elimination, or

increased deductibles not made at the request of the insured. The notice shall itemize and describe

the policy coverage reductions, elimination, or increased deductibles and shall be captioned

“NOTICE OF REDUCTION IN COVERAGE”. The policyholder shall be notified that the policy

renewal contains the “NOTICE OF REDUCTION IN COVERAGE” by one of the following

manners:

     (1) By mailing the “NOTICE OF REDUCTION IN COVERAGE” separate from the

renewal policy package mailing; or

     (2) By printing “NOTICE OF REDUCTION IN COVERAGE ENCLOSED” on the

renewal policy package envelope and including said reductions in the first few pages of the renewal

policy package; or

     (3) By printing “NOTICE OF REDUCTION IN COVERAGE ENCLOSED” on the first

page of the renewal policy package; or

     (4) If the renewal policy package is made available by email, the email notifying the

policyholder of the renewal shall contain a statement that the policy contains a “NOTICE OF

REDUCTION IN COVERAGE” and said reductions shall be in the first few pages of the renewal

policy package.

     These coverage changes must be approved by the insurance division with respect to those

types of insurance defined in § 27-8-1(1) — (8), issued to non-business insured and bodily injury

and property damage liability coverage issued to non-business insured. There shall be no liability

on the part of, and no cause of action of any nature shall arise against, the commissioner of

insurance or any insurer, their authorized representatives, agents, or employees, or any firm, person,

or corporation furnishing to the insurer or commissioner information as to the reasons for

cancellation or nonrenewal; for any statement made by any of them in any written notice of

cancellation or nonrenewal; or in any other communication, oral or written, specifying the reasons

for cancellation or nonrenewal; or for the providing of information pertaining to the cancellation

or nonrenewal; or for statements made, or evidence submitted, at any hearing conducted in

connection with the cancellation or nonrenewal.

     (b) The commissioner shall promulgate regulations with respect to personal motor vehicle

insurance, homeowners insurance, and residential fire insurance, or any components of that

insurance requiring notification to policyholders upon renewal of any coverage reductions,

elimination, or increased deductibles not at the request of the insured.

     (c) Notwithstanding any law to the contrary, on and after September 1, 2025, any increase

of more than twenty percent (20%) in the cost of renewal of homeowner’s insurance shall require

two (2) months’ advance notice be provided by the insurer to the policyholder. If an insurer is

failing to renew a homeowner’s policy, the notice of non-renewal shall be delivered to the

policyholder no less than two (2) months in advance of the policy expiration.

     (d) On and after September 1 2025, annual home owner policy renewal premium increases

shall be capped at a maximum of five (5%) percent for any policyholder who is sixty-five (65)

years of age or older and has household income equal to or less than the Rhode Island income limits

for low- and moderate-income households as published by RI Housing.

     (e) Any violation of the provisions of this section shall constitute a deceptive trade practice

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in violation of chapter 13.1 of title 6, and each violation shall be punishable by a fine not to exceed

one thousand dollars ($1,000).

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO INSURANCE-CASUALTY INSURANCE GENERALLY-LIMITATIONS ON

POLICY CANCELLATIONS AND RENEWALS

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     This act would require homeowner’s insurance providers to provide two months’ notice

before increasing any policy renewal premium more that 20%. The act would also cap rate increases

for policy holders that are 65 years of age or older and meet certain low- or moderate-income limits.

A violation would constitute a deceptive trade practice punishable by a fine not to exceed one

thousand dollars ($1,000).

     This act would take effect upon passage.

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