Introduced By: Senators Irons, Bates and Blais
Date Introduced : February 4, 1999
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:
{ADD 27-65-1. Commercial Special Risks. -- ADD} {ADD (a) Commercial Special Risks: ADD}
{ADD Notwithstanding any other provisions of this Title to the contrary and except as below limited, insurers shall not be required to file with, nor to receive approval from, the Insurance Division of the Department of Business Regulation for policy forms or rates used in the insurance of commercial special risks located in this state. Commercial Special Risks are defined as: ADD}
{ADD (1) Risks written as Commercial Lines Insurance, as defined in section 27-34-5 (5), and which are written on an excess or umbrella basis; ADD}
{ADD (2) Those risks, or portions thereof, written as Commercial Lines Insurance, as defined in section 27-34-5 (5), and which are not rated according to manuals, rating plans, or schedules including "a" rates; ADD}
{ADD (3) Risks written as commercial lines insurance which employ or retain the services of a "risk manager" and which also meet any one of the following criteria: ADD}
{ADD (i) Net Worth over fifty million dollars ($50,000,000); ADD}
{ADD (ii) Net Revenue/Sales of over one hundred million dollars ($100,000,000); ADD}
{ADD (iii) More than five hundred (500) employees per individual company or one thousand (1000) employees per holding company in the aggregate; ADD}
{ADD (iv) Aggregates premiums of over one hundred fifty thousand dollars ($150,000) excluding group life, group health, workers' compensation and professional liability (including but not limited to errors and omissions and directors and officers liability); ADD}
{ADD (v) Is a not for profit, or public entity with an annual budget or assets of at least forty-five million dollars ($45,000,000); or ADD}
{ADD (vi) Is a municipality with a population of over fifty thousand (50,000); ADD}
{ADD (4) Specifically Designated Commercial Special Risks including: ADD}
{ADD (i) All risks classified as Highly Protected Risks as defined in section 27-5-2.1 (4); ADD}
{ADD (ii) All commercial insurance aviation risks; ADD}
{ADD (iii) All credit property insurance risks which are defined as: "insurance of personal property of a commercial debtor against loss, with the creditor as sole beneficiary" or "insurance of personal property of a commercial debtor, with the creditor as primary beneficiary and the debtor as beneficiary of proceeds not paid to the creditor". For the purposes of this definition, "personal property" means furniture, fixtures, furnishings, appliances and equipment designed for use in a business trade or profession and not used by a debtor for personal or household use; ADD}
{ADD (iv) All boiler and machinery risks; ADD}
{ADD (vi) All inland marine risks written as Commercial Lines Insurance as defined in section 27-34-5 {ADD (5) ADD} ; and ADD}
{ADD (vii) All fidelity and surety risks. ADD}
{ADD (b) Nevertheless, the following lines of business shall remain subject to all filing and approval requirements contained in this Title even if written for risks which otherwise qualify as Commercial Special Risks: ADD}
{ADD (1) Life insurance; ADD}
{ADD (2) Annuities; ADD}
{ADD (3) Accident and health insurance; ADD}
{ADD (4) Automobile Insurance which is mandated by statute; ADD}
{ADD (5) Workers' Compensation and Employers' Liability Insurance; and ADD}
{ADD (6) Issuance through residual market mechanisms. ADD}
{ADD (c) Any insurer which provides coverage to a commercial special risk shall disclose to the insured that forms used and rates charges are exempt from filing and approval requirements by this subsection. Records of all such disclosures shall be maintained by the insurer. ADD}
{ADD (d) Brokers for exempt commercial policyholders as defined in section 27-65-1(a)(3) herein shall be exempt from the due diligence requirements of section 27-3-38(b) of the general laws. ADD}
{ADD 27-65-2. Definitions. -- ADD} {ADD (a) As used in this chapter, "risk manager" means a full-time employee {ADDof ADD} /or a person certified and licensed and retained by, an exempt commercial policyholder who is qualified through: ADD}
{ADD (1) education and experience; or ADD}
{ADD (2) training and experience; ADD}
{ADD to assess an exempt commercial policyholder's insurance needs and analyze and negotiate a policy of insurance and having primary responsibility or oversight of the risk management activities/function of an exempt commercial policyholder. A risk manager shall not receive commission, fees, or other consideration from the insurer in connection with the purchase of a commercial policy of insurance by the exempt commercial policyholder. ADD}
SECTION 2. This act shall take effect upon passage.
