It is enacted by the General Assembly as follows:

SECTION 1. Sections 27-7.2-1 and 27-7.2-9.1 of the General Laws in Chapter 27-7.2 entitled "Workers' Compensation Insurance Fund" are hereby amended to read as follows:

{ADD 27-7.2-1. Definitions. -- ADD} When used in this chapter, the following words shall have the following meanings:

(1) "Manager" means the manager of the state compensation insurance fund.

(2) "Fund" means the state compensation insurance fund.

(3) "Board" means the board of directors of the state compensation insurance fund.

(4) "Personal injury" or "injury" has the meaning given to it in chapter 28-29 of the general laws.

(5) "Residual risk" means an employer who in good faith attempts to procure or retain workers' compensation insurance but is unable to do so {ADD at competitive rates ADD} through ordinary methods in the voluntary market with a qualified insurer and who is not self-insured. The term also includes any legal entities that may be combined for experience rating purposes.

(6) "Voluntary risk" means an employer for which the fund voluntarily elects to provide workers' compensation or incidental coverage under this chapter.

(7) "Transition period" means the period from [May 18, 1992] through December 31, 1994.

{ADD 27-7.2-9.1. Residual risk program. -- ADD} (a) Provision of residual risk coverage.

(i) Subject to the transitional implementation provisions of section 27-7.2-20(b) and other limitations set forth in this chapter, the fund shall consider coverage applications for workers' compensation insurance against liabilities arising under title 28 of the general laws from any residual risk that tenders the necessary premium.

(ii) If the fund determines that (a) the applicant satisfies the conditions and standards of residual risk coverage established pursuant to this chapter, and (b) the writing of the residual risk coverage is consistent with the applicable reserve and surplus requirements and the solvency of the fund, then the residual risk shall be provided with workers' compensation insurance against liabilities arising under title 28 at the appropriate residual risk premium as provided by the fund's rates and rules. The residual risk may be required to meet other conditions considered by the fund to be necessary to protect the fund's interests.

(iii) The fund shall develop statistical and other information as necessary to allow the fund to establish appropriate criteria for its voluntary risk market and its residual risk market.

(iv) Notwithstanding the foregoing, the fund shall decline to insure any residual risk if insuring that risk would cause the fund to exceed the premium-to-surplus ratios established by section 27-7.2-20.2 and then in effect.

(b) Residual risk applications; denial of coverage.

(i) Policy applications. -- After the commencement of the fund's residual risk program and upon expiration of the applicant's then current workers' compensation insurance policy, a residual risk applicant may apply for coverage by the fund in good faith, either directly or through an agent licensed by the state of Rhode Island to procure worker's compensation insurance according to rules adopted by the board under section 27-7.2-17. Such application shall establish the applicant's status as a residual risk. No applicant shall be eligible to secure worker's compensation coverage from the fund by canceling its then current workers' compensation insurance coverage.

(ii) Denial, cancellation, and termination. -- The nonpayment of premium for current or prior policies issued by the fund to the applicant (or to another entity for which the fund deems the applicant to be a successor in interest) may be a basis for the fund to deny residual risk coverage. The failure or refusal by a residual risk applicant or insured to fully and accurately disclose to the fund information concerning the applicant's ownership, change of ownership, operations, or payroll, including allocation of payroll among state and federal compensation programs, classification of payroll, and any other information determined by the fund to be important in determining proper rates shall be sufficient grounds for the fund to deny an application or to non-renew or terminate an existing policy or to assess a premium surcharge against the insured pursuant to section 27-7.2-9.1(d). The failure or refusal by any residual risk policyholder or applicant to comply with the fund's safety requirements or to permit premises inspections to the sole satisfaction of the fund shall be sufficient grounds for having its workers' compensation insurance coverage surcharged, non-renewed, or cancelled, or an application for such coverage denied.

(iii) Appeal to director. -- Any determination of the fund with respect to the denial, cancellation or non-renewal of any residual risk workers' compensation insurance policy against liabilities arising under title 28, with the exception of cancellation for nonpayment of premium, may be appealed to the director of the department of business regulation in writing, within thirty (30) days of notice of such action. If the director thereupon determines that the fund has unreasonably denied, cancelled or failed to renew any such residual risk workers' compensation insurance policy, the fund shall in good faith reconsider issuing, reinstating or renewing the residual risk workers' compensation insurance policy. If the fund has not issued, reinstated or renewed the residual risk workers' compensation insurance policy within thirty (30) days of such a determination of the director, the residual risk may appeal the denial, cancellation or failure to renew by the fund to the superior court for Providence County.

(c) Residual risk exemptions. -- (i) Except as provided for in section 27-7.2-9.1(d), the residual risk program of the fund shall be exempt from rate regulation under Rhode Island law.

Notwithstanding the foregoing, if, at any time, the commissioner finds that a rate or filing of the fund is unjust, unreasonable, inadequate, excessive or unfairly discriminatory, he or she shall, after a hearing held upon not less than ten (10) days written notice, specifying the matters to be considered at that hearing, issue an order specifying on what respects he or she finds that the rate or filing is unjust, unreasonable, inadequate, excessive or unfairly discriminatory and stating when within a reasonable period thereafter, the rate shall no longer be used or the filing shall be deemed no longer effective. That order shall not affect any contract or policy made or issued prior to the expiration of the period set forth in the order. If, however, the commissioner finds that an unfair discrimination exists in the application of a rate or filing to an individual risk, the commissioner may, after a hearing held on like notice to the fund, issue an order that the discrimination be removed.

(ii) Except as provided in sections 27-7.2-19 and 27-7.2-20.2, the residual risk program of the fund shall not be required to comply with any surplus requirements for a domestic mutual insurance company.

(iii) Except as provided in sections 27-7.2-19 and 27-7.20.2, the residual risk program of the fund shall not be required to comply with any reserve requirements for a domestic mutual insurance company.

(d) Residual risk rate regulation.

(i) Notwithstanding any law to the contrary, the fund may file rates for residual risk workers' compensation insurance coverage with the director of the department of business regulation and use the rates ninety (90) days after the filing. When a filing is not accompanied by the information upon which the fund supports that filing, and the commissioner does not have sufficient information to determine whether the filing meets the requirements of applicable law, the commissioner may require the fund to furnish the information upon which it supports the filing. The information furnished in support of a filing may include (1) the experience or judgment of the fund, (2) its interpretation of any statistical data it relies upon, (3) the experience of other insurers or rating organizations, or (4) any other relevant factors. However, the fund shall not file and use any rates which would increase residual risk workers' compensation insurance rates in excess of an average of twenty five percent (25%) annually of its then effective residual risk workers' compensation insurance rates without prior approval of the director of the department of business regulation. Notwithstanding the foregoing, during such ninety (90) day period the fund may use such rates as filed, subject to refund if and to the extent any rate increase requested in such filing is disapproved or modified by the director.

(ii) Notwithstanding any law to the contrary, the fund and any residual risk workers' compensation insurance policyholder may mutually consent to modify the rates for that policyholder's workers' compensation insurance policy, provided the fund files notice of same with the director of the department of business regulation.

(iii) If upon review by the director of the department of business regulation within the ninety (90) day period of subsection (i) a residual risk workers' compensation insurance rate filed by the fund under this subsection is determined to be unjust, unreasonable, inadequate, excessive, or unfairly discriminatory by the director, the director may disapprove or modify in whole or in part such rate. Any such review and decision by the director of the department of business regulation shall be subject to the provisions of the administrative procedures act, chapter 35 of title 42.

(iv) Notwithstanding any law to the contrary, the fund may establish and apply multi-tiered premium and surcharge systems for its residual risk program. Such multi-tiered premium and surcharge systems shall be subject to the file and use procedures set forth in subsection (d)(i) above. Such systems shall provide for higher premium and surcharge payments by residual risk insureds who present higher than normal risks within a class, including the ability of the fund to assess from time to time a premium surcharge of up to three (3) times its otherwise applicable premium rate, as it deems appropriate to further the public purposes set forth herein, with such surcharge to be payable, at the option of the fund, upon assessment, over the policy year, or upon renewal. Any premium surcharge assessed by the fund may be appealed to the director of the department of business regulation within twenty (20) days of notice thereof, and the director may modify or rescind such surcharge if the director determines that the surcharge is unjust, unreasonable, inadequate, excessive or unfairly discriminatory.

(v) Notwithstanding any other provisions of law, immediately upon [May 18, 1992] the fund may commence to issue residual risk workers' compensation insurance policies at an initial rate not in excess of the rates then in effect for residual market workers' compensation insurance coverage offered by any other insurers within the state of Rhode Island, subject to the discretion of the fund to apply discounts and surcharge multipliers of up to three (3) times the premiums that would otherwise be applicable under such rates, with such premium surcharge to be payable as provided in the preceding paragraph (iv). The fund may continue to issue residual risk workers' compensation insurance coverage at such initial rates until the effectiveness of any revised rates filed pursuant to section 27-7.2-9.1(d)(i).

{DEL (vi) Notwithstanding any other provisions of law, as a further condition to becoming insured under the residual risk program of the fund, any residual risk which has been self-insured against workers' compensation liabilities arising under title 28 at any time after [May 18, 1992] shall pay to the fund an additional one-time and nonrefundable premium surcharge equal to thirty three percent (33%) of the premium which would otherwise be applicable for the first policy year under the residual program, as determined by the fund. DEL}

SECTION 2. Sections 28-29-2, 28-29-6, 28-29-26 and 28-29-30 of the General Laws in Chapter 28-29 entitled "Workers' Compensation -- General Provisions" are hereby amended to read as follows:

{ADD 28-29-2. Definitions. -- ADD} In chapters 29-38, inclusive, of this title, unless the context otherwise requires:

(1) "Employer" shall include any person, co-partnership, corporation or voluntary association, and the legal representative of a deceased employer; it shall include the state, and the City of Providence. It shall include also each city, town, and regional school district therein that shall vote or accept the provisions of chapters 29-38, inclusive, of this title in the manner herein provided.

(2) "Employee" means any person who has entered into the employment of or works under contract of service or apprenticeship with any employer, except that in the case of a city or town other than the City of Providence it shall only mean those class or classes of employees as may be designated by a city, town, or regional school district in the manner herein provided to receive compensation under chapters 29-38 inclusive, of this title. It shall not include any partner or sole proprietor, or a person whose employment is of a casual nature and who is employed otherwise than for the purpose of the employer's trade or business, {ADD or a person whose services are voluntary or who performs charitable acts, ADD} nor shall it include the members of the regularly organized fire and police departments of any town or city; and whenever a contractor has contracted with the state, a city, town, or regional school district any person employed by that contractor in work under contract shall not be deemed an employee of the state, city, town or regional school district as the case may be. {ADD In the case of a person whose services are voluntary or who performs charitable acts, any benefit received, in the form of monetary remuneration or otherwise, shall be reportable to the appropriate taxation authority but shall not be deemed to be wages earned under contract or hire for purposes of qualifying for benefits under chapters 29-38, inclusive, of this title. ADD} Any reference to an employee who had been injured shall, where the employee is dead, include a reference to his or her dependents as hereinafter defined, or to his or her legal representatives, or, where he or she is a minor or incompetent, to his or her conservator or guardian. A "seasonal occupation" means those occupations in which work is performed on a seasonal basis of not more than sixteen (16) weeks.

(3) "General or special employer":

(A) A general employer shall {ADD include but shall not be limited to temporary help companies and employee leasing companies and shall ADD} mean a person who for consideration and as the regular course of its business supplies an employee with or without vehicle to another person.

(B) A special employer shall mean a person who contracts for services with a general employer for the use of an employee, a vehicle or both.

(C) Whenever there be a general employer and special employer wherein the general employer supplies to the special employer an employee and the general employer pays or is obligated to pay the wages or salaries of such supplied employee, then and in that event notwithstanding the fact that direction and control shall be in the special employer and not the general employer, the general employer if it be subject to the provisions of the workers' compensation act or has accepted the same, shall be deemed to be the employer as set forth in subdivision (1) of this section {ADD and both the general and special employer shall be the employer for purposes of section 28-29-17 and 18 ADD}.

(4)(A) "Injury" means and refers to personal injury to an employee arising out of and in the course of his or her employment connected therewith and referable thereto.

(B) An injury to an employee while voluntarily participating in a private, group or employer sponsored carpool, vanpool, commuter bus service or other rideshare program, having as its sole purpose the mass transportation of employees to and from work shall not be deemed to have arisen out of and in the course of employment. Nothing in the foregoing shall be held to deny benefits under chapters 29-38, inclusive, and 47 of this title, to employees such as drivers, mechanics and others who receive remuneration for their participation in the rideshare program. Provided, however, that the foregoing shall not bar the right of an employee to recover against an employer and/or driver for tortious misconduct.

(5) "Physician" shall mean medical doctor, surgeon, dentist, chiropractor, osteopath, podiatrist and optometrist, as the case may be.

(6)(A) "Earnings capacity" means the weekly straight time earnings which an employee could receive if the employee accepted an actual offer of suitable alternative employment. Earnings capacity can also be established by the court based on evidence of ability to earn, including, but not limited to, a determination of the degree of functional impairment and/or disability, that an employee is capable of employment The court may, in its discretion, take into consideration the performance of the employee's duty to actively seek employment in scheduling the implementation of the reduction. The employer need not identify particular employment before the court can direct an earnings capacity adjustment.

(B) As used under the provisions of this title, the term "functional impairment" means an anatomical or functional abnormality existing after the date of maximum medical improvement as determined by a medically or scientifically demonstrable finding and based upon the most recent edition of the American Medical Association's Guide to the Evaluation of Permanent Impairment or comparable publications of the American Medical Association.

(7) "Suitable alternative employment" means employment, or an actual offer of employment which the employee is physically able to perform and will not exacerbate the employee's health condition and which bears a reasonable relationship to the employee's qualifications, background, education and training. The employee's age alone shall not be considered in determining the suitableness of the alternative employment.

(8) "Director" means the director of labor or his or her designee unless specifically stated otherwise.

(9) "Department" means the department of labor.

(10) "Maximum medical improvement" means a point in time when any medically determinable physical or mental impairment as a result of injury has become stable and when no further treatment is reasonably expected to materially improve the condition. Neither the need for future medical maintenance nor the possibility of improvement or deterioration resulting from the passage of time and not from the ordinary course of the disabling condition, nor the continuation of a pre-existing condition shall preclude a finding of maximum medical improvement. A finding of maximum medical improvement by the workers' compensation court may be reviewed only where it is established that an employee's condition has substantially deteriorated or improved.

{ADD 28-29-6. Employers subject to law. -- ADD} The following shall constitute employers subject to the provisions of chapters 29 -- 38, inclusive, of this title:

Every person, firm, and private corporation, including any public service corporation, including the state, that employs four (4) or more workers or operatives (which for purposes of determining jurisdiction under this act shall include partners and sole proprietors) regularly in the same business or in or about the same establishment under any contract of hire, express or implied, and a city or town in this state that shall vote to accept the provisions of those chapters in the manner provided shall constitute an employer.

{ADD 28-29-26. Supervision of enforcement. -- ADD} (a) Department of Labor -- The director as provided for in chapters 29-38, inclusive, of this title, and chapter 16 of title 42, shall have supervision over the enforcement of the provisions of those chapters, and the director shall have the power and authority to adopt and enforce all reasonable rules, regulations and orders necessary and suitable to the administration of the department's responsibilities as described in those chapters.

(b) Workers' Compensation Court -- (i) The workers' compensation court, as provided for in chapters 29-38, inclusive, of this title, shall have supervision over the enforcement of the provisions of said chapters, and shall have the power and authority to adopt and enforce all reasonable rules, regulations, and orders necessary and suitable to the administration of its responsibilities described in said chapters. The court shall remain judicially and administratively independent. The Workers' Compensation Court shall have original jurisdiction over all civil actions filed pursuant to sections 28-36-15 and 28-37-28.

(ii) All disputes pending before the department of workers' compensation on September 1, 1990 which have been scheduled for an informal hearing to be held on or after September 1, 1990 pursuant to section 28-33-1.1 or 28-33-9 shall be heard by the department no later than December 31, 1990. All disputes pending before the department on January 2, 1991 which have not been heard and concluded shall forthwith be transferred to the workers' compensation court which shall schedule a pre-trial conference in accordance with section 28-35-20 and the rules and regulations of the workers' compensation court. Thereafter, the matters shall follow the procedure set forth in chapter 35 of this title.

(iii) As of September 1, 1990, any petition, arising from any dispute, regardless of date of injury, unless specifically excepted, shall be filed with the administrator of the workers' compensation court in accordance with chapter 35 of title 28 as amended and any rules and regulations promulgated by the workers' compensation court.

(iv) The enactment of this section shall not affect the rights of the parties established by any existing memorandum of agreement, suspension agreement and receipt, preliminary determination of the department of workers' compensation, order or decree, or any existing right to the payment of compensation acquired pursuant to {ADD 28-29-6, or ADD} section 28-35-9.

{ADD 28-29-30. Advisory council. -- ADD} There is hereby created a workers' compensation advisory council consisting of eleven (11) members as follows:

(1) The chief judge of the workers' compensation court;

(2) The director of business regulation;

(3) The director of administration;

(4) One representative from labor appointed by the governor;

(5) One representative from industry appointed by the governor;

(6) Two (2) representatives from the general public appointed by the governor;

(7) The chairperson of the senate labor committee or his or her designee; and

(8) The chairperson of the house labor committee or his or her designee;

(9) The director of labor;

(10) The manager of the workers' compensation insurance fund.

It shall be the duty of the council to advise the governor and the general assembly, on a quarterly basis, on the administration of the workers' compensation system.

SECTION 3. Title 28 of the General Laws entitled "Labor and Labor Relations" is hereby amended by adding thereto the following chapter:

{ADD CHAPTER 31.1 ADD}

{ADD STATE EMPLOYEES COMPENSATION FUND ADD}

{ADD 28-31.1-1. Fund established. -- ADD} {ADD (a) There is hereby established in the department of administration of the state of Rhode Island a special account to be known as the State Employees' Compensation Fund, an account within the general fund. Such account, hereinafter referred to as the "state employees' compensation fund", shall consist of payments made to it as hereinafter provided, or penalties paid pursuant to this chapter, and of all other moneys paid into and received by the fund, or property and securities acquired by and through the use of moneys belonging to the fund, and of interest earned upon the moneys belonging to the fund. All moneys in the fund shall be mingled and undivided. The fund shall be administered by the director of administration or said director's designee.

(b) The purpose for which this fund shall be used is as follows: the settlement of claims pursuant to section 4 of chapter 31 of title 28. ADD}

{ADD 28-31.1-2. Parties to appeals involving fund. -- ADD} {ADD (a) In any appeal taken under chapters 29-38, inclusive, of this title which involves the state employees' compensation fund the director shall be a necessary party.

(b) In every case where payments are ordered made from the state employees' compensation fund, the director shall receive a notice of the same and he or she shall have the right to claim an appeal from the order, if, in his or her opinion, the director believes that the decision is not proper or that the fund is in danger of unwarranted depletion. ADD}

{ADD 28-31.1-3. Payments into fund by agencies. -- ADD} {ADD For the purposes of administering section 28-31-4 and 28-31.1-1(b) each state agency shall annually make payment to the state employees' compensation fund as determined by the department of administration. ADD}

SECTION 4. Sections 28-33-4, 28-33-17.3 and 28-33-41 of the General Laws in Chapter 28-33 entitled "Workers' Compensation -- Benefits" are hereby amended to read as follows:

{ADD 28-33-4. Commencement of compensation. -- ADD} No indemnity compensation shall be paid under chapters 29 -- 38, inclusive, of this title, for any injury which does not incapacitate the employee for a period of at least three (3) days from earning full wages, but, if such incapacity extends beyond the period of three (3) days, compensation shall begin on the fourth day from the date of injury The first two hundred fifty dollars ($250) of indemnity compensation following the three (3) day period mentioned herein, and the first two hundred fifty dollars ($250) of medical expense, for any compensable injury, shall {ADD , at the discretion of the carrier ADD} be a {DEL mandatory DEL} deductible {ADD charged ADD} to any employer insured in the residual market, which deductible the insurance carrier shall promptly charge back to the employer. Non-payment by the employer may be grounds for cancellation of the employer's workers' compensation insurance policy.

{ADD 28-33-17.3. Fraud and abuse. -- ADD} (a) The workers' compensation court is authorized and directed to impose sanctions and penalties necessary to maintain the integrity of and to maintain the high standards of professional conduct in the workers' compensation system. All pleadings related to proceedings under this act shall be considered an attestation by counsel that valid grounds exist for the position taken and that the pleading is not interposed for delay.

(1) If any judge determines that any proceedings have been brought, prosecuted, or defended by an employer, insurer, or their counsel without reasonable grounds, then:

(A) The whole cost of the proceedings shall be assessed upon the employer, insurer, or counsel whoever is responsible; and

(B) If a subsequent order requires that additional compensation be paid, a penalty of double the amount of retroactive benefits ordered shall be paid to the employee and such penalty shall not be included in any formula utilized to establish premium rates for workers' compensation insurance.

(2) If any judge determines that any proceedings have been brought or defended by an employee or his or her counsel without reasonable grounds, the whole cost of the proceedings shall be assessed against the employee or counsel, whoever is responsible.

(3) The court shall determine whether an action or defense is frivolous or conduct giving rise to the action or defense was unreasonable. Where the amount at issue is less than the actual attorneys' fees of the parties combined, the court shall exercise particular vigilance. Nothing in this subsection, however, is intended to discourage prompt payment in full of all amounts required to be paid.

(4) The appropriate body with professional disciplinary authority over the attorney shall be notified of any such action.

(b) (1) It is unlawful to do any of the following:

(A) Make or cause to be made any knowingly false or fraudulent material statement or material representation for the purpose of obtaining or denying any compensation;

(B) Present or cause to be presented any knowingly false or fraudulent written or oral material statement in support of, or in opposition to, any claim for compensation or petition regarding the continuation, termination or modification of benefits;

(C) Knowingly assist, aid and abet, solicit, or conspire with any person who engages in an unlawful act under this section;

(D) Make or cause to be made any knowingly false or fraudulent statements with regard to entitlement to benefits with the intent to discourage an injured worker from claiming benefits or pursuing a claim;

(E) Wilfully misrepresent or fail to disclose any material fact in order to obtain workers' compensation insurance at less than the proper rate for the insurance including, but not limited to intentionally misleading or failing to disclose information to an insurer regarding the appropriate rate classification of an employee; or

{ADD (F) Willfully fail to provide a lower rate adjustment favorable to an employer as required by an approved experience rating plan or regulations promulgated by the insurance commissioner; or ADD}

(2) For the purposes of this section, "statement" includes, but is not limited to, any endorsement of a benefit check, application for insurance coverage, oral or written statement, proof of injury, bill for services, diagnosis, prescription, hospital or provider records, x-rays, test results, or other documentation offered as proof of, or in the absence of, a loss, injury, or expense.

(3) If it is determined that any person concealed or knowingly failed to disclose that which is required by law to be revealed, knowingly gave or used perjured testimony or false evidence, knowingly made a false statement of fact, participated in the creation or presentation of evidence which he or she knows to be false, or otherwise engaged in conduct in violation of subsection (b)(1) of this section, that person shall be subject in criminal proceedings to a fine and/or penalty not exceeding fifty thousand dollars ($50,000), or double the value of the fraud, whichever is greater, or by imprisonment up to five (5) years in state prison or both.

(4) There shall be a general amnesty until July 1, 1992 for any person receiving compensation under chapters 29-38, inclusive, of this title, to the extent compensation has been voluntarily reduced or relinquished by the employee prior to that date.

(c) The director of labor shall establish a form, in consultation with the attorney general, to be sent to all workers who are presently receiving benefits and those for whom first reports of injury are filed in the future which shall give the employee notice that the endorsement of a benefit check sent pursuant to section 28-35-39 is the employee's affirmation that he or she is qualified to receive benefits under the workers' compensation act. The insurers and self-insured employers are directed to send the form to all workers receiving benefits as of May 18, 1992.

{ADD 28-33-41. Rehabilitation of injured persons -- Panel of rehabilitation advisors -- Reports required. -- ADD} (a)(1) The department and the workers' compensation court shall expedite the rehabilitation of and the return to remunerative employment of all disabled employees injured subject to chapters 29-38 inclusive of this title.

Rehabilitation means the prompt provision of appropriate services necessary to restore an occupationally injured or diseased employee to his or her optimum physical, mental, vocational and economic usefulness. This may require medical, vocational, and/or reemployment services to restore an occupationally disabled employee as nearly as possible to his or her pre-injury status. As a procedure, rehabilitation may include three (3) overlapping and interrelated components:

(A) Medical restorative services -- medical treatment and related services needed to restore the occupationally disabled employee to a state of health as near as possible to that which existed prior to the occupational injury or disease. Such services may include, but are not limited to, the following: medical, surgical, hospital, nursing services, attendant care, chiropractic care, physical therapy, occupational therapy, medicines, prostheses, orthoses, other physical rehabilitation services, including psychosocial services, and reasonable travel expenses incurred in procuring such services.

(i) Treatment by spiritual means. -- Nothing in this chapter shall be construed to require an employee who in good faith relies on or is treated by prayer or spiritual means by a duly accredited practitioner of a well recognized church to undergo any medical or surgical treatment, and weekly compensation benefits may not be suspended or terminated on the grounds that such employee refuses to accept recommended medical or surgical benefits. Such employee shall submit to all physical examinations as required by this title, chapters 29-38, inclusive. {ADD However, the private employer, insurer, self-insurer, group self-insurer, may pay for treatment by prayer or spiritual means. ADD}

(B) Vocational restorative services -- vocational services needed to return the disabled employee to his or her pre-injury employment or, if that is not possible, to a state of employability in suitable alternative employment. Such services may include, but are not limited to, the following: psychological and vocational evaluations, counseling and training.

(C) Reemployment services -- services used to return the occupationally disabled employee to suitable, remunerative employment as adjudged by his or her functional and vocational ability at that time.

(2) To this end, there is hereby created a panel of workers' compensation medical advisors consisting of physicians, psychologists, ergonomists, and physical and vocational rehabilitation specialists who shall be appointed by the director as provided herein. Upon request, members of the panel shall advise the director in matters pertaining to rehabilitation of injured workers whose condition is reported to the director as provided herein.

Any employer or any injured employee with total disability or permanent partial disability to whom the insurance carrier or certificated employer has paid compensation for a period of three (3) months or more, and to whom compensation is still being paid, or his or her employer or insurer, may submit a proposal for a rehabilitation program to the director for approval.

(2) Action shall be taken as in the judgment of the director shall seem practicable and likely to speed the recovery and rehabilitation of injured workers; provided, however, that rehabilitative services shall be appropriate to the needs and capabilities of injured workers.

(3) Prior to the approval of any rehabilitation program by the director, the insurance carrier or self-insured employer and the injured worker must be notified of the contents of the proposed program and provided an opportunity to respond to it.

(c) Compensation payments shall not be diminished or terminated while the employee is participating in a rehabilitation program approved by the director {ADD , or while a proposal for approval of a rehabilitation plan has been filed with the department of labor prior to the date on which an employer's petition to reduce or terminate benefits has been filed, while such plan is pending approval by the director ADD} . Provided, however, That compensation payments shall be suspended while an injured employee wilfully refuses to participate in a rehabilitation program approved by the director. When the employee has completed an approved rehabilitation program, the rehabilitation provider shall recommend, in the instance of vocational rehabilitation, an earnings capacity, or in the instance of physical rehabilitation provided or prescribed by a physician, a degree of functional impairment, and the employee shall be referred to the court for an earnings capacity adjustment to benefits, unless the employee has returned to gainful employment.

(d) Entry by an employee to the Donley Rehabilitation Center or any other rehabilitative program approved by the director after an employer's petition or notice of intention to discontinue, suspend or reduce payments has been filed and is pending shall only be by order of the workers' compensation court after notice and opportunity to be heard.

(e) The employer shall bear the expense of rehabilitative services agreed to or ordered pursuant to this section. If those rehabilitative services require residence at or near or travel to a rehabilitative facility, the employer shall pay the employee's reasonable expense for board, lodging and/or travel.

(f) The director shall appoint as many members of the panel of advisors as shall be necessary.

(g) Except for the provisions of this section, the provisions of section 28-33-8 shall remain in full force and effect.

(h) For the purposes of this section, the director shall promulgate rules and regulations pursuant to chapter 35 of title 42 for certifying rehabilitation providers, evaluators and counselors, and the director shall maintain a registry of those persons so certified. No plan of rehabilitation submitted to the director requiring the services of a rehabilitation counselor shall be approved unless the counselor is certified by the director.

SECTION 5. Sections 28-36-10, 28-36-13, 28-36-15 and 28-36-16 of the General Laws in Chapter 28-36 entitled "Workers' Compensation -- Insurance" are hereby amended to read as follows:

{ADD 28-36-10. Liability of noncomplying employers. -- ADD} Any employer subject to chapters 29 -- 38, inclusive, of this title who shall fail to comply with this chapter, and any employer who has elected to become subject to the provisions of chapters 29 -- 38, inclusive, of this title in accordance with {ADD section 28-29-6 and ADD} section 28-29-8, who shall fail to comply with this chapter within ten (10) days after that election, shall be liable for compensation to any injured employee or his dependents according to the provisions of chapters 29 -- 38, inclusive, of this title, or for damages in the same manner as if the employer had not elected to become subject to, or was not subject to, the provisions of those chapters, at the option of the employee or his dependents; Provided, That the option is exercised and notice thereof in writing given to the employer within ninety (90) days after the injury to the employee, otherwise the employer shall be liable only for the compensation payable under those chapters by employers subject to or who have elected to become subject to the provisions of those chapters.

{ADD 28-36-13. Information furnished by insurers or self-insurers on request of director. -- ADD} {ADD (a) ADD} Any employer insurance company or self-insurers insuring employers against liability for personal injuries to employees shall fill out all blanks and answer all questions submitted to it by the director, relating to classifications, premium rates, amount of compensation paid and such other information which the director may deem important either for the proper administration of chapters 29 -- 38, inclusive, of this title or for statistical purposes. Any employer insurance company or self-insurer who refuses to notify the director as required in this section shall be subject to prosecution for a misdemeanor and upon conviction thereof may be punished by a fine of not more than two hundred fifty dollars ($250.00) for each offense. All criminal actions for any violation of this section shall be prosecuted by the attorney general. The attorney general shall prosecute such actions to enforce the payment of penalties and fines at the request of the director.

{ADD (b) Any insurance company that willfully refuses to lower rates based on the employer's good faith report of information required by this section shall be subject to prosecution for a misdemeanor and upon conviction thereof may be punished by a fine of not more than two hundred fifty dollars ($250) for each offense. All criminal actions for any violation of this section shall be prosecuted by the attorney general at the request of the director. In addition to the foregoing, the director shall have discretion to assess an administrative penalty and/or to bring a civil action in any court of competent jurisdiction for collection of such penalties and sanctions. ADD}

{ADD 28-36-15. Penalty for failure to secure compensation -- Personal liability of corporate officers. -- ADD} {ADD (a) ADD} Any employer required to secure the payment of compensation under the provisions of chapters 29 -- 38, inclusive, of this title who fails to secure that compensation shall be guilty of a misdemeanor, and, upon conviction thereof, shall be punished by a fine of not {ADD less than one hundred dollars ($100) and not ADD} more than {DEL one thousand dollars ($1,000) DEL} {ADD five hundred dollars ($500) for each day of noncompliance with the requirements of this title. The director may in his/her discretion assess an administrative penalty and/or to bring a civil action in any court of competent jurisdiction, or to refer the matter to the attorney general for prosecution of criminal charges. Each day shall constitute a separate and distinct offense for calculation of the fine. Provided, however, that in no case shall such fine exceed an amount determined to be three (3) times the payment of premium as determined by the payroll audit for the time period in which such employer was required to secure said payment of compensation ADD} or by imprisonment for not more than one (1) year, or by both fine and imprisonment; and in any case where that employer is a corporation, the president, vice president, secretary, and treasurer thereof shall be also severally liable to the fine or imprisonment as herein provided for the failure of that corporation to secure the payment of compensation; and the president, vice president, secretary, and treasurer shall be severally personally liable, jointly with such corporation, for any compensation or other benefit which may accrue under those chapters in respect to any injury which may occur to any employee of that corporation while it shall so fail to secure the payment of compensation as required by those chapters. All criminal actions for any violation of this section shall be prosecuted by the attorney general. The attorney general shall prosecute such actions to enforce the payment of penalties and fines at the request of the director. The Workers' Compensation Court shall have jurisdiction over all civil actions filed pursuant to this section.

{ADD (b) As soon as practicable after complaint under this section is filed, the director shall examine the complaint to determine whether cause exists for further inquiry. Should the director find cause, the director shall thereupon give the parties to the complaint not less than ten (10) days' notice by mail of the time and place of hearing. After the hearing, parties to the complaint shall be given notice by mail by the director of his or her determination of the controversy, including the amount of the payment the director recommends as a bond or penalty. Any party shall have the right to appeal from any determination or order made under the provisions of this chapter. Any appeal authorized under this chapter shall be amend to the workers' compensation court in the first instance, and from the workers' compensation court to the supreme court in accordance with the provisions of section 28-35-30. The director in his discretion, may bring a civil action in any court of competent jurisdiction to collect all payments and penalties ordered. All civil actions for any violations of this chapter or of any of the rules or regulations promulgated by the director, or for the collection of payments in accordance with section 28-37-13 or penalties hereunder shall be prosecuted by any qualified member of the Rhode Island bar whom the director may designate, in the name of the director, and the director shall be exempt from giving surety for costs in any such proceedings.

(c) Collection and transmission of payments. The director shall collect all payments under this chapter under such rules and regulations as may be set forth by the director. All fines collected pursuant to this section shall be deposited to a restricted receipt account to be administered by the director of the department of labor in his sole discretion to carry out the provisions of title 28, chapters 29-38, inclusive. ADD}

{ADD 28-36-16. Fraudulent conveyances by uninsured employer. -- ADD} {ADD (a) ADD} Any uninsured employer, who knowingly transfers, sells, encumbers, assigns, or in any manner disposes of, conceals, secretes or destroys any property belonging to that employer, after one of his employees has been injured, within the purview of chapters 29 -- 38, inclusive of this title, and with intent to avoid the payment of compensation under those chapters to that employee or his dependents, shall be guilty of a misdemeanor and, upon conviction thereof, shall be punished by a fine of not {ADD less than one hundred dollars ($100) and not ADD} more than {DEL one thousand dollars ($1,000) DEL} {ADD five hundred dollars ($500) for each day of willful noncompliance with the requirements of this title. Each day shall constitute a separate and distinct offense for calculation of the fine. Provided, however, that in no case shall such fine exceed an amount determined to be three (3) times the premium required as determined by the payroll audit required, for the time period in which such employer was required to secure said payment of compensation, ADD} or by imprisonment for not more than one (1) year, or by both fine and imprisonment, and in any case where that employer is a corporation, the president, secretary, and treasurer thereof shall be also severally liable to the penalty of imprisonment as well as jointly and severally liable with the corporation for the fine. {ADD The director has discretion to assess an administrative penalty and/or to bring a civil action in any court of competent jurisdiction, or to refer the matter to the attorney general for prosecution of criminal charges.

(b) As soon as practicable after a complaint under this section is filed, the director shall examine the complaint to determine whether cause exists for further inquiry. Should the director find cause, the director shall thereupon give the parties to the complaint not less than ten (10) days' notice by mail of the time and place of hearing. After the hearing, parties to the complaint shall be given notice by mail by the director of his or her determination of the controversy, including the amount of the payment the director recommends as a bond or penalty. Any party shall have the right to appeal from any determination or order made under the provisions of this chapter. Any appeal authorized under this chapter shall be made to the workers' compensation commission in the first instance, and from the workers' compensation commission to the supreme court in accordance with the provisions of section 28-35-30. The director, in his discretion, may bring a civil action in any court of competent jurisdiction. All civil actions for any violations of this chapter or of any of the rules or regulations promulgated by the director, or for the collection of payments in accordance with section 28-37-13 or penalties hereunder shall be prosecuted by any qualified member of the Rhode Island bar whom the director may designate, in the name of the director, and the director shall be exempt from giving surety for costs in any such proceedings.

(c) Collection and transmission of payments. The director shall collect all payments under this chapter under such rules and regulations as may be set forth by the director. All fines collected pursuant to this section shall be deposited to a restricted receipt account to be administered by the director of the department of labor in his sole discretion to carry out the provisions of title 28, chapters 29-38, inclusive. ADD}

SECTION 6. Section 12-6-5 of the General Laws in Chapter 12-6 entitled "Warrants for Arrest" is hereby amended to read as follows:

{ADD 12-6-5. Recognizance not required on official complaints. -- ADD} Whenever any agent of the Children's Friend and Service shall make complaint against any person for any of the offenses mentioned in sections 11-9-1 to 11-9-8, inclusive; or whenever any agent of the Rhode Island Society for the Prevention of Cruelty to Animals shall make any complaint against any person for any of the offenses mentioned in chapter 1 of title 4; or whenever the director of public welfare of any town shall make complaint against any person for the violation of any of the provisions contained in chapter 8 of title 15; or whenever the director or an agent of the department of labor, specifically designated for such purpose shall make a complaint against any person for any of the offenses mentioned in chapters 3, 12 {ADD , ADD} {DEL and DEL} 14 {ADD and chapters 29-38, inclusive ADD} of title 28; or whenever the director or an agent of the department of human services, duly appointed for that purpose; or the director of any state institution appointed by the director of social and rehabilitative services; or the superintendent of the Rhode Island training school for youth;or the warden of the adult correctional institutions shall make complaint against any person under any law governing the state department of social and rehabilitative services, such director, agent or officer shall not be required to enter into recognizance for costs.

SECTION 7. Sections 28-37-1, 28-37-11 and 28-37-13 of the General Laws in Chapter 28-37 entitled "Workers' Compensation Administrative Fund" are hereby amended to read as follows:

{ADD 28-37-1. Fund established -- Sources -- Administration. -- ADD} (a) There is hereby established in the department of labor of the state of Rhode Island a special account to be known as the workers' compensation administrative account, an account within the general fund. Such account, hereinafter referred to as the "workers' compensation administrative account", shall consist of payments made to it, as hereinafter provided, or penalties paid pursuant to this chapter, and of all other moneys paid into and received by the fund, of property and securities acquired by and through the use of moneys belonging to the fund, and of interest earned upon the moneys belonging to the fund. All moneys in the fund shall be mingled and undivided. The fund shall be administered by the director of labor or his or her designee.

(b) The purposes for which this fund shall be used are as follows:

(1) To provide funds to the Dr. John E. Donley Rehabilitation Center for suitable structures, personnel and equipment necessary for the rendering of rehabilitative services including, but not limited to, physical therapy, psychotherapy and occupational therapy to injured workers coming within the purview of chapters 29 -- 38, inclusive, of this title.

(2) To provide funds for all expenditures of the education unit created pursuant to section 42-16-4 and all expenditures of the workers' compensation fraud prevention unit created pursuant to section 42-11-15.

(3) To provide funds for all expenditures of the workers' compensation court after July 1, 1989. The administrator of the fund shall on July 1st of each fiscal year transfer such funds as are reasonable and necessary to fund all expenditures of the workers' compensation court for the fiscal year from the administrative account, to a restricted receipt account to be established in the judicial department. The administrator of the workers' compensation court is hereby authorized to draw funds from the restricted receipt account for all court expenditures.

(4) To provide funds to the department of labor for all expenditures incurred in administering its responsibilities under chapters 29 -- 38, inclusive, of this title.

(5) To provide funds to the department of labor for all expenditures incurred in investigating and processing or otherwise administering its responsibilities regarding claims for benefits or payments under sections 28-35-20, 28-37-4 and 28-37-8.

(6) To provide funds to the department of labor for the maintenance and operation of a system of data collection as provided for in section 28-37-31. The director shall be authorized to purchase and/or lease equipment necessary to effectuate the purposes of section 28-37-31.

(7) To provide funds for loans to the state compensation insurance fund as provided in sections 28-7.2-19, and 27-7.2-20.1.

{ADD (8) To provide funds for the payment or reimbursement of actual incremental costs of COLA increases mandated by section 28-33-17 respecting injuries occurring prior to September 1, 1990, in such amounts as the director, in his sole discretion, deems appropriate. Such amounts may be paid out of the fund by order of the director and shall be made by order drawn on the general treasury to be charged against the fund. ADD}

{ADD 28-37-11. Parties to appeals involving fund. -- ADD} (a) In any appeal taken under chapters 29-38, inclusive, of this title which involves the workers' compensation administrative fund the director shall be a necessary party.

(b) In every case where payments are ordered made from the workers' compensation administrative fund, the director shall receive a notice of the same and he or she shall have the right to claim an appeal from the order, if, in his or her opinion, the director believes that the decision is not proper or that the fund is in danger of unwarranted depletion.

{ADD (c) In every case, where reimbursement from the workers' compensation administrative fund is ordered pursuant to the provisions of sections 1.1 of chapter 33, repealed, or 20(f) of chapter 35 of this title, in which the employee's incapacity has been determined to have been misrepresented pursuant to the provisions of sections 17.1, 17.2, 17.3, or 18.1 of chapter 33 of this title, the director may, in his discretion, bring suit or charges against the appropriate party in any court having a jurisdiction over the matter. ADD}

{ADD 28-37-13. Payments into fund by insurers and employers. -- ADD} (a) For the privilege of writing or renewing workers' compensation insurance or employer's liability insurance in this state, every mutual association or stock company so authorized, to be hereinafter referred to as "insurers," and for the privilege of being authorized to make payments of workers' compensation directly to its employees every employer so authorized, to be hereinafter referred to as " certified employers," shall annually make the following payments to the workers' compensation administrative fund:

(1) In the case of an insurer an amount measured by four and one-quarter percent (4 1/4%) or such other percentage of return certified by the director pursuant to subsection (c) below, of the gross premiums received for workers' compensation insurance or employer's liability insurance written or renewed by it during the preceding calendar year on risks within this state, but not less than twenty-five dollars ($25.00).

(2) In the case of a certified employer an amount measured by four and one quarter percent (4 1/4%) or such other percentage of return certified by the director pursuant to subsection (c) below, of the premium which such employer would have had to pay to obtain workers' compensation insurance or employer's liability insurance for the preceding calendar year, but not less than twenty-five dollars ($25.00) which amount shall be determined by the director.

(b) Every certified employer and every insurer shall also pay into the workers' compensation administrative fund the sum of one thousand five hundred dollars ($1,500) for every case of injury causing death in which there is no person entitled to compensation.

(c) The director is hereby authorized to determine on or before March 15 of each year by experience or by other means, after taking into account projected expenditures for the current fiscal year and for the next fiscal year, what percentage of return, to be hereinafter referred to as the "assessment", if needed to provide sufficient funds, in conjunction with appropriations from the general fund, if any, to fulfill the purposes enumerated in section 28-37-1(b) and shall certify same to the governor and the general assembly. The payments due and are due within sixty (60) days of notice each year pursuant to sections 28-37-15 and 28-37-16 shall be made based upon the assessment so certified. If the assessment certified in any given year is less than the assessment certified for the prior year, the percentage of reduction, shall be applied to reduce pro rata employer payments and in accordance herewith, the director shall require the insurance carriers as described in subdivision (a)(1) above to reduce to their premiums a like percentage of premiums paid. If an insured thereafter cancels his or her policy or otherwise allows his or her policy to terminate, or the insured's policy is terminated, the insurance company shall make such pro rata cash refund not later than sixty (60) days after the reduction has been determined. The insurance company shall forthwith certify to the director that the premium reductions have been made.

(d) In recognition of the continued utilization of the workers' compensation system by insurers who have discontinued writing workers' compensation policies in the state, if any insurance company deemed by the director of the Department of Business Regulation to have been licensed on January 1, 1991, to write compensation policies discontinues the issuance of workers' compensation policies, such company shall be and remain obligated to pay the workers' compensation administrative fund assessment for a period of six (6) years thereafter.

In calculating the amount due by such insurance companies on the due date as defined in subsection (c) of the year after which it discontinues writing policies in this state (the base year) the director of labor will calculate an amount equal to the assessment in effect on the last date the insurer issued workers' compensation policies multiplied by the gross premiums received for workers' compensation insurance or employers liability insurance written or renewed by it during the base year on risks within this state, but not less than twenty-five dollars ($25.00) each year.

The basis for the calculation of the assessment in each succeeding year shall be a reduction of the base year assessment by increments of sixteen and two-thirds percent (16 2/3%) per each succeeding year.

(e) All penalties collected for any violation under chapters 29 -- 38, inclusive, of this title, shall be paid into this fund.

{ADD (f) Any employer, insurer, self-insurer, or group self-insurer who has not paid assessments or who is not current with payment of assessments into this fund shall not be permitted to place a claim against the fund. Reimbursements to any employer, insurer, self-insurer, or group self-insurer who is not current with payment of assessments into this fund shall be suspended forthwith as of the first date of arrearage.

(g) To be eligible to use any of the services funded by the workers' compensation administrative fund an employer, insurer, self-insurer, or group self-insurer shall pay a fee of one thousand dollars ($1,000) per claim, per month into the fund until the arrearage is paid in full in addition to any other interests or penalties. ADD}

SECTION 8. Section 28-47-12 of the General Laws in Chapter 28-47 entitled " Workers' Compensation -- Group Self-Insurance" is hereby amended to read as follows:

{ADD 28-47-12. Premium taxes and assessments. -- ADD} Each group self-insurer, except any group self-insurer composed of the state, municipal governments, governmental authorities of the state or municipalities, or quasi-municipal subdivisions of the state or municipalities, shall pay premium taxes, as close as practicable, on the same basis as insurers as provided in chapter 17 of title 44. Each group self-insurer shall pay assessments for the {DEL second injury fund, as provided in section 28-37-17 and for the Donley Center, as provided, in section 28-38-5, DEL} {ADD workers' compensation administrative fund pursuant to chapter 37 of title 28 ADD} on the same basis as is practicable, as an insurer.

SECTION 9. Section 42-11-15 of the General Laws in Chapter 42-11 entitled " Department of Administration" is hereby amended to read as follows:

{ADD 42-11-15. Fraud prevention unit -- Appointment -- Duties -- Qualifications -- Annual report. -- ADD} (a) The director of administration shall establish within the state employees' workers' compensation unit of the department of administration, a workers' compensation fraud prevention unit whose members shall be in the unclassified service and whose responsibility it shall be to formulate an integrated state plan to reduce and prevent fraud arising out of claims made pursuant to the workers' compensation laws of this state. The plan shall include a fraud prevention telephone hotline. The workers' compensation fraud prevention unit shall submit an annual report to the director, the attorney general, the chief judge of the workers' compensation court and the general assembly fiscal advisory staff, on or before November 15 of each year, describing its activities and setting forth its findings, conclusions and recommendations.

(b) To carry out the purposes of this title, the director, with the appropriation provided for this unit, is authorized to employ such persons as may be required, including the funding of an assistant attorney general position within the department of attorney general to assist the unit in any hearing, investigation, action or proceeding taken or done in carrying out the purposes of this section. The director is further authorized and directed to employ such investigative or other services as he or she deems reasonable and prudent to accomplish these purposes.

(c) The unit shall be funded by the workers' compensation administrative fund established in section 28-37-1 of the Rhode Island general laws, and such other funds or balances as the director may deem appropriate. {ADD Expenditures for any increase in service level shall be by agreement of the director, department of labor and the director, department of administration. ADD}

SECTION 10. Chapter 42-11 of the General Laws entitled "Department of Administration" is hereby amended by adding thereto the following sections:

{ADD 42-11-16. Investigative powers of the fraud prevention unit. -- ADD} {ADD The unit is authorized to investigate allegations of workers' compensation fraud and abuse. In furtherance of any investigation, the unit shall have the power to:

(a) Administrative subpoena. -- The unit may request, through an administrative subpoena, the attendance and testimony of witnesses and the production of books, records, and other evidence relevant to an investigation. The subpoena shall specify the time, date, and place where the witness is to respond. Within twenty (20) days after the service of the subpoena or at anytime before the return date specified therein, whichever period is shorter, the person served may file in a state superior court and serve upon the unit and the attorney general a civil petition for an order of the court modifying or setting aside the subpoena. The petition shall specify each ground upon which the petitioner is seeking relief. If a person neglects or refuses to comply with any request to provide testimony or produce books, records, and other evidence relevant to an investigation, the attorney general may petition the superior court for an order compelling such person to answer the request. Books, records, and other evidence obtained through an administrative subpoena that are not used in a court proceeding shall be destroyed as soon as practicable.

(b) Service of process. -- Unit investigators shall have the authority to serve criminal and civil process. ADD}

{ADD 42-11-17. Disclosure of information to the fraud prevention unit. -- Any insurer, or agent authorized by the insurer to act on its behalf, having reason to believe that an insurance transaction may be fraudulent, shall send to the fraud prevention unit a report of the transaction and any additional information requested by the unit. The unit shall review the reports submitted and undertake further investigation in appropriate cases, as determined by the unit. ADD}

{ADD 42-11-18. Fraud prevention unit -- evidence/confidentiality. -- ADD} {ADD The unit's documents, reports, or evidence relative to a workers' compensation investigation shall be privileged and not open to public inspection. Such documents, reports, and evidence shall not be subject to a subpoena duces tecum unless the unit consents, or a court determines the unit would not be jeopardized by compliance with the subpoena. ADD}

{ADD 42-11-19. Immunity. -- ADD} {ADD In the absence of fraud, malice or bad faith, no insurer or agent authorized by the insurer to act on its behalf, employee of the unit, or person providing information to the unit, shall be subject to civil liability for damages as a result of any statement, report, or investigation made pursuant to chapter 42-11. Nothing herein shall interfere with any common law or statutory privilege or immunity. ADD}

{ADD 42-11-20. Severability. -- ADD} {ADD If any clause, sentence, paragraph, section or part of this chapter or the application thereof to any person or circumstances, shall, for any reason, be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair or invalidate the remainder of this chapter and the application thereof to other persons or circumstances, but shall be confined in its operation to the clause, sentence, paragraph, section or part thereof directly involved in the controversy in which such judgment shall have been rendered and to the person or circumstances involved. ADD}

SECTION 11. This act shall take effect upon passage.