2026 -- S 2646

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LC004954

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2026

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A N   A C T

RELATING TO INSURANCE -- RHODE ISLAND INSURANCE MARKET PROTECTION

ACT

     Introduced By: Senators Euer, Kallman, Lauria, DiMario, Zurier, Ujifusa, Mack, Murray,
and Gu

     Date Introduced: February 27, 2026

     Referred To: Senate Commerce

     It is enacted by the General Assembly as follows:

     SECTION 1. Findings of fact.

     The general assembly finds and declares that:

     (1) This Act ensures that Rhode Island homeowners’ insurance premiums will not be

invested in activities which damage or put at risk their financial, physical, or property interests, or

the integrity of Rhode Island homes, businesses, municipalities, state agencies, or state lands.

     (2) Climate change, caused by the combustion of fossil fuels, is an immediate and grave

threat to the people, buildings, infrastructure, environment, natural resources, and economy of the

state.

     (3) Rising sea levels and temperatures, extreme weather events, flooding, heat waves,

droughts, and other climate change effects have and, for the foreseeable future, will continue to

damage and destroy homes, businesses, and public infrastructure nationally and within our state,

and, additionally, cause homeowners, businesses, municipalities, and states to continuously take on

additional expenses of remediation, preparation, and insurance against such effects.

     (4) In response to climate change impacts, many insurers have raised premiums and

deductibles, reduced coverage, denied more claims, or withdrawn from high-risk areas, shifting

climate risks onto homeowners, renters, and businesses. These changes particularly impact

communities that are already vulnerable to economic instability and natural disasters.

     (5) Insurers continue to underwrite and invest in fossil fuel expansion that contributes to

growing climate risks that are burdening consumers and threatening financial markets. Fossil fuel

companies depend on insurance coverage to operate, and insurers remain key financial backers of

new coal, oil, and gas infrastructure. Scientific research indicates that a significant portion of known

fossil fuel reserves must remain unused to limit global warming, and groups like the International

Energy Agency have warned that no new fossil fuel supply projects are compatible with limiting

global warming below 2°C.

     (6) This Act will support the State’s goals by limiting the insurance industry’s participation

in fossil fuel industries. The State has committed to reduce climate emissions to net-zero by 2050,

as described in chapter 6.2 of title 42 ("2021 act on climate"). Additionally, this act will further the

State’s goal to incentivize businesses, institutions, and industry to adapt to climate change, as

described in the act on climate.

     (7) To make sure households are able to maintain affordable property insurance, insurers

must align their investments and underwriting with science-based emissions targets—meaning they

are in line with what the latest climate science deems necessary to meet the goals of the Paris

Agreement and avoid the worst impacts of climate change.

     (8) Insurers should not profit from activities which put their insured at risk of substantial

loss, or which undermine the physical and financial wellbeing of their insured, or otherwise create

or transfer substantial risks or costs to residents, municipalities, state agencies, and state property.

     SECTION 2. Title 27 of the General Laws entitled "INSURANCE" is hereby amended by

adding thereto the following chapter:

CHAPTER 84

RHODE ISLAND INSURANCE MARKET PROTECTION ACT

     27-84-1. Short title.

     This chapter shall be known and may be cited as the “Rhode Island Insurance Market

Protection Act”.

     27-84-2. Definitions.

     As used in this chapter:

     (1) “Covered Insurer” means an insurance company authorized to conduct the business of

property and casualty insurance in the State of Rhode Island:

     (i) That reports over ten million dollars ($10,000,000) of direct property and casualty

premiums written in the State of Rhode Island on its annual schedule “T” filing with the National

Association of Insurance Commissioners;

     (ii) Whose activities or investments may expose such insurer to a heightened level of risk

from the physical or transition effects of climate change; or

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     (iii) The director otherwise determines that subjecting such an insurer to the requirements

of §§ 27-84-3 and 27-84-4 would be in the public interest.

     (2) “Department” means the department of business regulation.

     (3) “Director” means the director of the department of business regulation.

     (4) “Financed emissions” means greenhouse gas emissions associated with insurer

investments, as defined by the department in consultation with the department of environmental

management. Insurer investments under this definition shall include, at a minimum, investments in

fossil fuel companies and fossil fuel projects. The department may, by rule or guidance, designate

additional asset classes, sectors, or investment types to be included for the purpose of calculating

financed emissions including, but not limited to, high-emitting industries, emissions-intensive

supply chains, and emissions-intensive utilities. In establishing a definition under this subsection,

the department shall consider:

     (i) Internationally recognized standards for financed emissions accounting, including those

issued by the Partnership for Carbon Accounting Financials (PCAF);

     (ii) The availability and quality of emissions data from subsidiary, joint venture, or

portfolio companies and asset classes;

     (iii) The proportional contribution of investment activities to an insurer’s overall

greenhouse gas footprint;

     (iv) The need to provide consistent, comparable, verifiable, and transparent emissions

disclosures and disclosure standards across the insurance sector; and

     (v) Alignment with Rhode Island climate policy objectives, including emissions reduction

targets, climate risk mitigation strategies, and sector-specific decarbonization targets.

     (5) “Fossil fuel” means a carbon-based energy source formed in the earth’s crust from

decayed organic material including, but not limited to, petroleum, crude oil, natural gas, and coal.

     (6) “Fossil fuel company” means any entity including, but not limited to, corporations,

limited liability companies, partnerships, joint ventures, trusts, special purpose vehicles, private

equity funds, subsidiaries, associates, affiliates, or any other legal, financial, or organizational

structure that derives ten percent (10%) or more of its revenue from any new or existing fossil fuel

project.

     (7) “Fossil fuel project” means a project, undertaking, activity, or investment designed to

facilitate any significant action with respect to fossil fuels or any byproduct thereof for commercial

purposes including, but not limited to:

     (i) Upstream activities to include exploration, extraction, drilling, mining, production,

collection, gathering, development, redevelopment, expansion, or construction of mines, fields,

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wells, rigs, platforms, or any other related infrastructure;

     (ii) Midstream activities to include refining, processing, exportation, transportation,

storage, petrochemical manufacturing, or any other distribution infrastructure or logistics including

construction of pipelines, terminals, power plants, or compressors; and

     (iii) Downstream activities to include power, heat, or cooling generation facilities and fossil

fuel-powered manufacturing under North American Industry Classification System (NAICS)

codes: 221112 (Fossil Fuel Electric Power Generation), 325110 (Petrochemical Manufacturing),

and 324199 (All Other Petroleum and Coal Products Manufacturing).

     (8) “Insured emissions” means greenhouse gas emissions associated with insurer

underwriting, as defined by the department, in consultation with the department of environmental

management. Insurer underwriting under this definition shall include, at a minimum, underwriting

fossil fuel companies and fossil fuel projects. The department may, by rule or guidance, designate

additional asset classes, sectors, or investment types to be included for the purpose of calculating

insured emissions including, but not limited to, high-emitting industries, emissions-intensive

supply chains, and emissions-intensive utilities. In establishing a definition under this subsection,

the department shall consider:

     (i) Methodologies for attributing greenhouse gas emissions to insurance underwriting

activities, including the methodology issued by the Partnership for Carbon Accounting Financials

(PCAF) for insurance-associated emissions, and guidance from international initiatives such as the

Forum for Insurance Transition to Net Zero (FIT) and the Science Based Targets Initiative (SBTi);

     (ii) Distinctions among lines of business, including whether the underwriting pertains to

high-emitting sectors such as fossil fuel exploration, extraction, processing, exporting, transporting,

and any other significant action with respect to oil, natural gas, coal, or any byproduct thereof;

     (iii) The extent to which emissions attributable to underwriting can be reasonably

measured, estimated, or modeled using available data;

     (iv) The need to provide consistent, comparable, verifiable, assured, and transparent

emissions disclosures and disclosure standards across the insurance sector; and

     (v) Alignment with Rhode Island climate policy objectives, including emissions reduction

targets, climate risk mitigation strategies, and sector-specific decarbonization targets.

     (9) “New fossil fuel project” means a fossil fuel project in excess of what is in or approved

for development as of the effective date of this chapter, including projects designed to expand the

use of or generate new infrastructure for production from existing reserves. A “new fossil fuel

project” shall not include modifications made solely to increase safety or reduce carbon intensity

including, but not limited to, reduce fugitive or vented emissions; provided that, such modifications

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do not expand the fossil fuel supply base.

     (10) “Science-based climate mitigation targets” means absolute emissions reduction targets

that are in line with limiting global temperature rise to well below 2°C above pre-industrial levels,

as defined by the department, in consultation with the department of environmental management.

In establishing a definition under this subsection, the department shall:

     (i) Consider peer-reviewed, science-based methodologies and criteria developed by

recognized and reputable standard-setting bodies, including the Science Based Targets Initiative

(SBTi), the Intergovernmental Panel on Climate Change (IPCC), and relevant international

agreements such as the 2015 Paris Climate Accords;

     (ii) Cover Scopes 1 (direct), 2 (indirect energy), and 3 (value chain) greenhouse gas

emissions, as defined by the Greenhouse Gas Protocol and consistent with best available accounting

and disclosure practices, to include, the accounting methodologies issued by the Partnership for

Carbon Accounting Financials (PCAF) for financed emissions and insurance-associated emissions;

     (iii) Require that targets shall not rely on carbon offsets, avoided emissions claims, or

unproven greenhouse gas removal technologies;

     (iv) Align with Rhode Island climate policy objectives, including the mandatory targets for

emissions reduction laid out in chapter 6.2 of title 42 (“2021 act on climate”); and.

     (v) Provide for periodic review and updating of targets based on evolving climate science,

sector-specific developments, and real-world performance data.

     (11) “State” or “the State” or “this State” means the State of Rhode Island.

     27-84-3. Implementing climate leadership targets for Insurers.

     (a) The department shall:

     (1) On or before July 1, 2027, submit a report to the governor, the speaker of the house and

senate president on the budgetary impacts of this chapter.

     (2) On or before January 1, 2028, develop and implement a process for covered insurers to

file reports pursuant to the provisions of subsection (b) of this section;

     (3) Align covered insurer investment and underwriting activities with science-based

climate mitigation targets, including by:

     (i) Prohibiting covered insurers from underwriting any new fossil fuel projects on or after

July 1, 2026;

     (ii) Directing covered insurers to unwind and terminate any outstanding or pending

commitments or negotiations to underwrite new fossil fuel projects no later than July 1, 2028.

     (iii) Directing covered insurers to phase out all underwriting for any existing fossil fuel

projects and fossil fuel companies by January 1, 2035 and establish short, medium, and long term

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benchmarks;

     (iv) Prohibiting covered insurers from investing in any new fossil fuel projects on or after

July 1, 2026;

     (v) Directing covered insurers to unwind and terminate any outstanding or pending

commitments or negotiations to invest in new fossil fuel projects on or before July 1, 2028;

     (vi) Directing covered insurers to phase out all investments from any existing fossil fuel

projects and fossil fuel companies by January 1, 2035 and establish short, medium, and long term

benchmarks; and

     (vii) Any other requirements deemed necessary by the department to align covered

insurers’ investments and underwriting with science-based climate mitigation targets, including

developing and implementing enterprise-wide transition plans

     (4) On or before January 1, 2028, develop and implement a process for covered insurers to

certify pursuant to the provisions of subsection (c) of this section, as a condition of licensure in the

State of Rhode Island, that covered insurers meet the requirements of this section, which may

include mandatory transition plans and progress; and

     (5) Annually review the reports and certifications required under this section, and compile

and post the information in such reports and certifications on the department’s website within three

(3) months of receiving the same.

     (b) On or before July 1, 2028, and annually thereafter, covered insurers shall submit, within

six (6) months of the end of each fiscal year, a report to the director disclosing:

     (1) The covered insurer’s investments in any fossil fuel company, fossil fuel project, or

new fossil fuel project;

     (2) The financed emissions from all of the covered insurer’s investments in the previous

fiscal year;

     (3) The covered insurer’s underwriting for any fossil fuel company, fossil fuel project, or

new fossil fuel project, in terms of total gross premiums in dollars, disaggregated by company and

project in a format determined by the director;

     (4) The insured emissions from all of the covered insurer’s underwriting in the previous

reporting year;

     (5) The timelines, strategies, and methodologies the covered insurer has implemented to

comply with the requirements of this chapter;

     (6) The progress the covered insurer has made towards achieving these requirements,

including specific milestones; and

     (7) Any other information the department deems necessary to effectively implement and

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enforce any rule or regulation promulgated pursuant to this chapter, which the department shall

publish in advance.

     (c) As part of the annual report required under subsection (b) of this section, the chief

executive officer (CEO) or chief financial officer (CFO) of a covered insurer shall certify the

accuracy of the information contained in such reports and that the covered insurer has:

     (1) Ceased or made progress towards cessation of underwriting and investment in any fossil

fuel project;

     (2) Relinquished or made progress in relinquishing any direct or indirect stake in any fossil

fuel company or fossil fuel project; and

     (3) Not invested in or underwritten any new fossil fuel project.

     (d) The director may engage the services of third-party attorneys, actuaries, accountants,

and other experts not otherwise a part of the director’s staff, at the reporting covered insurer’s

expense, as shall be reasonably necessary to assist in the review of such covered insurer’s filings

under this section. All persons so engaged shall be under the direction and control of the director

and shall act in a purely advisory capacity.

     27-84-4. Statewide withdrawal restrictions.

     (a) A covered insurer may surrender to the director its certificate of authority and thereafter

cease to transact insurance in the State of Rhode Island, or discontinue the writing or renewal of

one or more individual lines of insurance specified in the certificate of authority in the State of

Rhode Island, only after the submission and approval of an informational filing submitted to the

director, which filing shall be subject to the following provisions:

     (1) The covered insurer shall send a notice to policyholders of the proposed withdrawal no

later than thirty (30) days following the submission of the informational filing to the director, which

shall state that the covered insurer intends to withdraw and has filed its intention to withdraw with

the director, the terms of the withdrawal, including the date of the proposed commencement of

nonrenewal of policies, and the proposed duration of the withdrawal plan for the covered insurer’s

book of business;

     (2) Nonrenewals shall not commence prior to one calendar year and ninety (90) days

following the submission of the informational filing;

     (3) The company shall send a notice of nonrenewal to every policyholder:

     (i) No later than one calendar year preceding the date of nonrenewal; and

     (ii) A subsequent notice of nonrenewal ninety (90) days preceding the date of nonrenewal;

and

     (4) Nonrenewals shall take place in a manner in order to be applicable to all insureds on an

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equitable basis with respect to risk classification and territorial or other form of rating factor, and

shall be effectuated at a uniform rate over a period of not less than three (3) calendar years

commencing with the date established in subsection (a)(2) of this section.

     (b) Upon receiving the informational filing provided for in subsection (a) of this section,

the director shall:

     (1) Within seven (7) days, publish the informational filing on the department’s website;

and

     (2) Within thirty (30) days, hold a public hearing, at which the covered insurer and any

members of the public may present testimony to determine if the withdrawal is justifiably required

to protect the solvency of the covered insurer and would not be contrary to the public interest by

disrupting the market or markets for said insurance.

     (c) Within sixty (60) days of receiving the informational filing provided for in subsection

(a) of this section, the director shall notify the covered insurer in writing whether the withdrawal

plan has been approved, any conditions of approval, and any requested modifications. If the director

concludes that the withdrawal is not justified to protect the solvency of the covered insurer or would

be contrary to the public interest by disrupting the market or markets for said insurance, the director

shall prohibit the withdrawal unless the covered insurer surrenders all certificates of authority held

by the covered insurer or other companies within the same holding company system as the covered

insurer.

     (d) Notwithstanding the provisions of subsections (a), (b), and (c) of this section, if the

covered insurer finds a replacement carrier for the business that will not be renewed as the result

of the withdrawal either prior to or after the date of the informational filing, the covered insurer

may apply to the director for approval to transfer the business to a replacement carrier or carriers.

If the director approves the replacement carrier or carriers, notwithstanding the provisions of

subsection (a) of this section, the notice of nonrenewal shall be in compliance with the time limits

provided by law for that line of insurance, and the covered insurer shall offer every insured

coverage with the replacement carrier prior to the effective date of the nonrenewal. The director

shall not withhold approval of a replacement carrier or carriers if that covered insurer is authorized

to do business in the same line of business in Rhode Island and has the financial and business

capability to write and service the business being transferred to it by the withdrawing covered

insurer. The director shall approve or disapprove the replacement carrier or carriers within sixty

(60) days of:

     (1) The date of the filing by the withdrawing covered insurer requesting approval of a

replacement carrier or carriers; or

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     (2) The filing by the replacement carrier or carriers requesting to be a replacement carrier,

whichever is later.

     (e) The director may waive the requirements of subsection (a)(2) of this section, and the

one-year nonrenewal notice of subsection (a)(3) of this section, as well as the three (3) year

minimum withdrawal period in subsection (a)(4) of this section if the director deems a waiver to

be necessary to protect the solvency of the covered insurer making the informational filing or if the

director deems the withdrawal to have a limited impact on the market.

     27-84-5. Compliance and penalties.

     (a) Any covered insurer that fails to comply with the reporting requirements, divestment

obligations or investment and underwriting prohibitions, or withdrawal restrictions under this

chapter shall be subject to, at the discretion of the director, one or more of the following:

     (1) Administrative penalties:

     (i) Pursuant to § 42-14-16(a); and

     (ii) Equivalent to the covered insurer’s fractional share of the property and casualty

insurance market in Rhode Island based on total premiums received multiplied by the insurer’s net

profits generated from the covered insurer’s enterprise-wide operations within Rhode Island in the

violation year, and

     (iii) Up to an additional one-tenth of one percent (0.01%) of the violation year’s net profits

generated from the covered insurer’s enterprise-wide operations within Rhode Island per day of a

continuing violation; and

     (2) Restriction, suspension, or revocation of the insurer’s certificate of authority to do

business in Rhode Island.

     (b) Any covered insurer that fails to comply with the reporting requirements, divestment

obligations or investment and underwriting prohibitions under this chapter shall be required to

report semiannually to the director and submit a compliance plan until the director determines the

covered insurer is in compliance with this chapter.

     (c) Any covered insurer that fails to comply with the provisions of this chapter three (3)

times within five (5) years may be subject to additional penalties available to and at the discretion

of the director under Rhode Island insurance laws.

     (d) The director may transfer fees collected under this section to other departments or state-

administered funds for the purpose of financing projects and initiatives designed to avoid, limit, or

adapt to negative impacts caused by climate change, including for the benefit of households

residing in and businesses located in low- and moderate- income communities or disadvantaged

communities.

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     27-84-6. Reporting.

     (a) On or before July 1, 2028, and once every two (2) years thereafter, the director shall

submit a report to the governor, speaker of the house and senate president. The report shall also be

made available to the public and posted on the department’s website. The report shall disclose, for

the preceding two (2) calendar years, the department’s:

     (1) Efforts to implement the provisions of § 27-84-3, including anonymized and aggregated

data on insurer investments in and underwriting of fossil fuel companies and fossil fuel projects,

financed emissions, and insured emissions;

     (2) Regulatory and supervisory actions taken, if any, to bolster the resilience of insurers to

the physical impacts of climate change;

     (3) Regulatory and supervisory actions planned, if any, to bolster the resilience of insurers

to the physical impacts of climate change;

     (4) Violations of § 27-84-3, and any penalties assessed as a result, anonymized and

aggregated;

     (5) Violations of §27-84-4, and any penalties assessed as a result, anonymized and

aggregated; and

     (6) The effects, if any, that insurers’ efforts to address climate risk have had on the

affordability and availability of insurance for low income communities, communities of color and

other traditionally underserved communities in the state.

     (b) Such report shall also summarize available information regarding:

     (1) Insurer and insurance market readiness for climate change and the energy transition;

     (2) Major sources of climate risk faced by the insurers;

     (3) Any gaps related to climate risk that the department intends to address; and

     (4) Any legislative action that must be taken in order to allow the department to address

climate risk.

     27-84-7. Rules and regulations.

     The department shall adopt such regulations as the director deems necessary to implement

and carry out the purposes of this chapter.

     27-84-8. Severability.

     If any provision of this chapter, or the application of it to any person or circumstance, is

held invalid, that determination shall not affect the provisions or applications of this chapter which

can be given effect without the invalid provision or application, and to that end the provisions of

this chapter are severable.

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     SECTION 3. 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 -- RHODE ISLAND INSURANCE MARKET PROTECTION

ACT

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     With limited exception, this act would create and impose penalties for covered insurers that

fail to comply with its reporting requirements, divestment obligations, and withdrawal restrictions,

such as administrative penalties proportional to their statewide market share and profit, restrictions

on the insurer's ability to do business within the state, and escalating penalties for repeated

noncompliance. This act would also create a structured withdrawal process by which covered

insurers would cease doing business within the state upon proper notice to their insureds, public

comment, and approval by the director of the department of business regulation (DBR).

     This act would take effect upon passage.

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