2026 -- S 2721

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LC005849

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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 -- CHILD-SERVING PROVIDER LIABILITY JOINT

UNDERWRITING ASSOCIATION

     Introduced By: Senators DiMario, Lauria, Gallo, Vargas, Valverde, Britto, Acosta,
Murray, and Kallman

     Date Introduced: February 27, 2026

     Referred To: Senate Judiciary

     It is enacted by the General Assembly as follows:

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

adding thereto the following chapter:

CHAPTER 84

CHILD-SERVING PROVIDER LIABILITY JOINT UNDERWRITING ASSOCIATION

     27-84-1. Declaration of purpose.

     (a) The general assembly finds that:

     (1) Child-serving providers throughout the state are experiencing significant difficulty in

obtaining affordable and adequate liability insurance coverage;

     (2) These organizations provide essential services to children and families, including

childcare, education, behavioral health services, youth development, mentoring, foster care, and

recreational programming;

     (3) The lack of available or affordable liability insurance threatens the continued operation

of these providers and the health, safety, and welfare of Rhode Island children;

     (4) It is in the public interest to ensure the availability of liability insurance coverage for

child-serving providers unable to procure such coverage in the voluntary insurance market.

     (b) The purpose of this chapter is to establish a joint underwriting association to provide

liability insurance coverage to eligible child-serving providers as a market of last resort. This

chapter is enacted to provide a mechanism for the equitable apportionment among insurers of the

responsibility for insuring eligible child-serving providers who are in good faith entitled to, but are

unable to procure, liability insurance coverage through ordinary methods.

     27-84-2. Definitions.

     As used in this chapter:

     (1) “Association” means the child-serving organization liability joint underwriting

association established pursuant to this chapter.

     (2) “Child care provider” or “child-serving provider” means any person, corporation,

partnership, nonprofit organization, governmental entity, or other legal entity that is licensed,

certified, registered, or otherwise authorized under the laws of the State of Rhode Island to provide

care, supervision, treatment, education, behavioral health services, residential services, or other

essential services to children under eighteen (18) years of age. Such term shall include, but not be

limited to:

     (i) Licensed child care centers and family child care homes;

     (ii) Group family child care homes and school-age child care programs;

     (iii) Early learning, preschool, and pre-kindergarten programs not otherwise operated by a

public school district;

     (iv) Community-based children’s behavioral health providers including, but not limited to,

entities providing outpatient counseling, home-based services, mobile response and stabilization

services, intensive in-home treatment, therapeutic mentoring, case management, or similar

services;

     (v) Residential treatment facilities, group homes, therapeutic foster care agencies, shelter

care programs, and other congregate care programs serving minors;

     (vi) Providers of early intervention services, developmental disability services, and child

welfare services;

     (vii) Nonprofit or for-profit organizations that provide after-school programs, enrichment

programs, mentoring services, recreational supervision, or structured youth programming; and

     (viii) Any other licensed or state-contracted provider whose primary purpose includes the

supervision, care, custody, treatment, or support of minors.

     For purposes of clarity, this definition shall apply regardless of whether services are

delivered in a center-based setting, in a residential facility, in a private home, in a community

setting, or through mobile or in-home service delivery.

     (3) “Department” means the Rhode Island department of business regulation.

     (4) “Director” means the director of the department of business regulation, or designee.

     (5) “Member insurer” means every insurer authorized to write commercial general liability

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insurance in this state.

     (6) “Net direct premiums” means gross direct premiums written on commercial general

liability insurance in this state, less return premiums thereon and dividends paid or credited to

policyholders.

     27-84-3. Establishment of association -- Mandatory membership.

     (a) There is created a nonprofit, unincorporated legal entity to be known as the child-

serving provider liability joint underwriting association.

     (b) Every insurer authorized to write commercial general liability insurance in this state

shall be and remain a member of the association as a condition of its authority to transact such

insurance within this state.

     (c) The association shall operate pursuant to a plan of operation approved by the director

and shall exercise its powers through a board of directors established under the plan.

     (d) The association shall operate under the supervision of the department and shall be

subject to the applicable provisions of this title.

     27-84-4. Governance.

     (a) The association shall be governed by a board of directors consisting of:

     (1) Four (4) representatives of member insurers, appointed by the director;

     (2) Three (3) representatives of child-serving organizations, appointed by the governor;

     (3) One public member with experience in child advocacy or risk management, appointed

by the governor; and

     (4) The director, or designee, who shall serve as an ex officio, nonvoting member.

     (b) Board members shall serve terms of three (3) years and may be reappointed.

     (c) The board shall adopt bylaws and administer the association in accordance with the

approved plan of operation.

     27-84-5. Plan of operation.

     (a) Within one hundred twenty (120) days after the effective date of this chapter, the

association shall submit to the director a proposed plan of operation for approval.

     (b) The plan of operation shall provide for:

     (1) The establishment of necessary facilities for underwriting, policy issuance, claims

handling, and other functions of the association;

     (2) Reasonable underwriting standards for determining eligibility;

     (3) Procedures for applicants to demonstrate inability to obtain coverage in the voluntary

market;

     (4) The establishment of rates, rating plans, and policy forms;

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     (5) The assessment of member insurers to defray losses and expenses;

     (6) The investment and management of funds;

     (7) The appointment of servicing carriers or third-party administrators; and

     (8) Such other provisions as are necessary or proper for the efficient operation of the

association.

     (c) If the association fails to submit a suitable plan of operation, the director shall

promulgate and adopt a plan.

     (d) The plan of operation and any amendments thereto shall be subject to approval by the

director.

     27-84-6. Coverage.

     (a) The association shall make available commercial general liability insurance coverage,

including coverage for bodily injury, property damage, personal injury, and sexual abuse and

molestation liability, to any eligible child-serving provider that:

     (1) Is in compliance with applicable state licensing and regulatory requirements; and

     (2) Has been unable, after diligent effort, to obtain substantially equivalent coverage in the

voluntary market.

     (b) The association may establish reasonable limits of liability, deductibles, exclusions,

and underwriting requirements, subject to approval by the director.

     (c) Coverage shall be provided only so long as the insured remains unable to obtain

coverage in the voluntary market.

     27-84-7. Rates.

     (a) Rates shall not be excessive, inadequate, or unfairly discriminatory and shall be

actuarially sound.

     (b) All rates, rating plans, and policy forms shall be filed with and approved by the director

prior to use.

     (c) The director may disapprove any rate or form inconsistent with this title.

     27-84-8. Assessments.

     (a) If the association’s premiums, investment income, and other revenues are insufficient

to pay its losses and expenses, the association shall assess member insurers in proportion to each

member’s share of net direct premiums written in this state for commercial general liability

insurance during the preceding calendar year.

     (b) Assessments shall be subject to approval by the director.

     (c) A member insurer may offset any assessment paid against its premium tax liability in

this state in a manner and over a period determined by the general assembly.

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     27-84-9. Powers of the association.

     The association shall have the power to:

     (1) Sue and be sued;

     (2) Enter into contracts;

     (3) Borrow funds and issue evidence of indebtedness;

     (4) Purchase reinsurance;

     (5) Invest funds in accordance with § 27-4-27;

     (6) Appoint servicing carriers or administrators; and

     (7) Perform all acts necessary or proper to effectuate the purposes of this chapter.

     27-84-10. Board of directors -- Immunity.

     (a) The association shall be governed by a board of directors established pursuant to the

plan of operation and approved by the director.

     (b) No member of the board of directors, officer of the association, or employee or agent

of the association shall be liable in a civil action for any act or omission arising out of the

performance of duties pursuant to this chapter; provided that, such person acted in good faith and

without willful misconduct or gross negligence.

     (c) The association shall indemnify and hold harmless each board member, officer,

employee, and agent of the association against all costs, expenses, judgments, and liabilities

incurred in connection with any action, suit, or proceeding arising out of the performance of duties

under this chapter; provided that, the person acted in good faith and without willful misconduct or

gross negligence.

     (d) For purposes of chapter 31 of title 9, the association shall be deemed a public

instrumentality of the state solely for purposes of the immunity protections set forth in this section.

     27-84-11. Examination and oversight.

     The association shall be subject to examination by the department in the same manner as

insurers authorized to transact business in this state. The reasonable costs of examination shall be

borne by the association.

     27-84-12. Tax status.

     The association shall be exempt from all state and local taxes except taxes on real and

personal property.

     27-84-13. Annual report.

     The association shall submit annually to the director and to the speaker of the house of

representatives and the president of the senate a report on its financial condition, underwriting

experience, claims activity, and market conditions.

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     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 -- CHILD-SERVING PROVIDER LIABILITY JOINT

UNDERWRITING ASSOCIATION

***

     This act would create the child-serving provider liability joint underwriting association to

provide a joint underwriting association to provide liability insurance coverage for eligible child

serving providers.

     This act would take effect upon passage.

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