Introduced By: Senator Blais
Date Introduced : February 9, 1999
It is enacted by the General Assembly as follows:
SECTION 1. Section 7-1-5 of the General Laws in Chapter 7-1 entitled "Corporations -- General Provisions" is hereby amended to read as follows:
7-1-5. Corporations organized for the business of insurance. -- Notwithstanding any general law to the contrary, any corporation, whether organized with capital stock or as a mutual association, that is organized for the purpose of carrying on within this state the business of insurance, surety, or indemnity, shall be organized pursuant to chapter 1.1 of this title and shall have all the rights and privileges and be subject to provisions of chapter 1 of title 27, relating to domestic insurance companies; provided, however, the articles of incorporation shall comply with such requirements as established by rule or regulation promulgated by the director of the department of business regulation, and provided, further, that no such corporation may commence business until it has satisfied the requirements enumerated in section 27-1-37. {ADD Any ADD} {ADD corporation as above defined and, notwithstanding the provisions of section 27-41-22, any corporation organized, created or established in any manner pursuant to chapters 19, 20, 20.1, 20.2, 20.3 and 41 of Title 27, shall obtain prior approval from the director of the department of business regulation for all charter amendments made pursuant to this Title 7. ADD} Any corporation as above defined heretofore created by special act of the general assembly may amend its charter pursuant to section 7-1.1-53.1, subject to prior approval of the amendment by the director of the department of business regulation.
SECTION 2. Section 7-1-5.1 of the General Laws in Chapter 7-1 entitled "Corporations -- General Provisions" is hereby repealed in its entirety.
{DEL 7-1-5.1. Foreign insurance companies. --
Any foreign corporation organized for the purpose of carrying
on the business of insurance, surety, or indemnity may become
a domestic insurance company by organizing a domestic insurance
company pursuant to the terms and conditions of this chapter with
the declared intention of merging the foreign corporation into
the domestic insurance company with the domestic insurance company
being the surviving entity, subject to the approval of the director
of the department of business regulation in each case. With respect
to a merger, each insurance company shall comply with the applicable
provisions, if any, of the laws of the state in which it is organized.
Upon the completion of a merger, the foreign corporation shall
for all purposes be deemed to be a domestic insurance company
subject to the provisions of this chapter and the laws of the
state of Rhode Island relating thereto. DEL}
SECTION 3. Section 27-4.1-2 of the General Laws in Chapter 27-4.1 entitled "Legal Services Insurance" is hereby amended to read as follows:
27-4.1-2. Legal services insurance as a form of accident and health insurance -- Effect of other laws. -- Legal services insurance provides for the mental and emotional welfare of human beings by defraying the costs of legal services; it shall be deemed to be accident and health insurance and shall be so classified for the purposes of chapter {ADD s ADD} 34.1 {ADD and 34.3 ADD} of this title. Legal services insurance may only be written pursuant to the provision of this chapter. Except to the extent expressly provided in this chapter, nothing in any other chapter of this title regulating the form, content, or provisions of accident and health insurance policies or the filing and approval of these policies including premium rates shall apply to legal services insurance policies written under and subject to the provisions of this chapter.
SECTION 4. Chapter 27-11.1 of the General Laws entitled "Investments by Domestic Insurance Companies" is hereby amended by adding thereto the following section:
{ADD 27-11.1-8. Investment standards. -- ADD} {ADD (a) All domestic insurance companies and United States branches of alien insurers entered through this state, shall protect the interests of insureds by promoting insurer solvency and financial strength through the application of investment standards that facilitate a reasonable balance of the following objectives: ADD}
{ADD (1) To preserve principal; ADD}
{ADD (2) To assure reasonable diversification as to type of investment, issuer and credit quality; and ADD}
{ADD (3) To allow insurers to allocate investments in a manner consistent with principles of prudent investment management to achieve an adequate return so that obligations to insureds are adequately met and financial strength is sufficient to cover reasonably foreseeable contingencies. ADD}
{ADD (b) All investments, including but not limited to those referred to in this chapter, shall be made and held in accordance with the objectives in subsection (a) subject to the limitations set forth in this chapter and in regulations promuglated pursuant to this chapter. Investments not conforming to this chapter and any regulations promulgated pursuant to this chapter shall not be considered admitted assets. ADD}
SECTION 5. This act shall take effect upon passage.
