2012 -- S 2728

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LC01219

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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A N A C T

RELATING TO INSURANCE

     Introduced By: Senators Bates, and Miller

     Date Introduced: March 06, 2012

     Referred To: Senate Judiciary

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 27-2.4-16 of the General Laws in Chapter 27-2.4 entitled "Producer

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Licensing Act" is hereby amended to read as follows:

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     27-2.4-16. Notification to insurance commission of termination. Notification to

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insurance commissioner of termination. -- (a) Termination for cause. - An insurer or authorized

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representative of the insurer that terminates the employment contract or other insurance business

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relationship with an insurance producer shall notify the insurance commissioner within thirty (30)

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days following the effective date of the termination, using a format prescribed by the insurance

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commissioner, if the reason for termination is one of the reasons set forth in section 27-2.4-14 or

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the insurer has knowledge the insurance producer was found by a court, government body, or

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self-regulatory organization authorized by law to have engaged in any of the activities in section

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27-2.4-14. Upon the written request of the insurance commissioner, the insurer shall provide

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additional information, documents, records or other data pertaining to the termination or activity

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of the insurance producer.

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      (b) Termination without cause. - An insurer or authorized representative of the insurer

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that terminates the employment or contract with an insurance producer for any reason not set

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forth in section 27-2.4-14 shall notify the insurance commissioner within thirty (30) days

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following the effective date of the termination, using a format prescribed by the insurance

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commissioner. Upon written request of the insurance commissioner, the insurer shall provide

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additional information, documents, records or other data pertaining to the termination.

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      (c) (b) Ongoing notification requirement. - The insurer or the authorized representative

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of the insurer shall promptly notify the insurance commissioner in a format acceptable to the

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insurance commissioner if, upon further review or investigation, the insurer discovers additional

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information that would have been reportable to the insurance commissioner in accordance with

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subsection (a) of this section had the insurer then known of its existence.

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      (d) (c) Copy of notification to be provided to the insurance producer.

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      (1) Within fifteen (15) days

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      (2) Within thirty (30) days after the insurance producer has received the original or

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additional notification, the insurance producer may file written comments concerning the

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substance of the notification with the insurance commissioner. The insurance producer shall, by

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the same means, simultaneously send a copy of the comments to the reporting insurer, and the

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comments shall become a part of the insurance commissioner's file and accompany every copy of

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a report distributed or disclosed for any reason about the insurance producer as permitted under

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subsection (f) (e) of this section.

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      (e)(d) Immunities. - (1) In the absence of actual malice, an insurer, the authorized

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representative of the insurer, an insurance producer, the insurance commissioner, or an

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organization of which the insurance commissioner is a member and that compiles the information

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and makes it available to other insurance commissioners or regulatory or law enforcement

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agencies shall not be subject to civil liability, except as provided in this section, and a civil cause

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of action of any nature shall not arise against these entities or their respective agents or

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employees, except as provided in this section, as a result of any statement or information required

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by or provided pursuant to this section or any information relating to any statement that may be

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requested in writing by the insurance commissioner, from an insurer or insurance producer; or a

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statement by a terminating insurer or insurance producer to an insurer or insurance producer

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limited solely and exclusively to whether a termination for cause under subsection (a) of this

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section was reported to the insurance commissioner, provided that the propriety of any

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termination for cause under subsection (a) of this section is certified in writing by an officer or

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authorized representative of the insurer or insurance producer terminating the relationship.

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      (2) In any action brought against a person that may have immunity under this chapter for

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making any statement required by this section or providing any information relating to any

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statement that may be requested by the insurance commissioner, the party bringing the action

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shall plead specifically in any allegation that subdivision (e)(1) (d)(1) of this section does not

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apply because the person making the statement or providing the information did so with actual

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malice.

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      (3) This chapter shall not abrogate or modify any existing statutory or common law

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privileges or immunities.

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      (f) (e) Confidentiality. - (1) Any documents, materials or other information in the control

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or possession of the department that is furnished by an insurer, insurance producer or an

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employee or agent of the insurer or insurance producer acting on behalf of the insurer or

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insurance producer, or obtained by the insurance commissioner in an investigation pursuant to

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this section, shall be confidential by law and privileged, shall not be subject to chapter 2 of title

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38, shall not be subject to subpoena, and shall not be subject to discovery or admissible in

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evidence in any private civil action. The insurance commissioner is authorized to use the

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documents, materials or other information in the furtherance of any regulatory or legal action

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brought as a part of the insurance commissioner's duties.

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      (2) Neither the insurance commissioner nor any person who received documents,

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materials or other information while acting under the authority of the insurance commissioner

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shall be permitted or required to testify in any private civil action concerning any confidential

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documents, materials, or information subject to this chapter.

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      (3) In order to assist in the performance of the insurance commissioner's duties under

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this chapter, the insurance commissioner:

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      (i) May share documents, materials or other information, including the confidential and

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privileged documents, materials or information subject to this chapter, with other state, federal,

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and international regulatory agencies, with the NAIC, its affiliates or subsidiaries, and with state,

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federal, and international law enforcement authorities, provided that the recipient agrees to

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maintain the confidentiality and privileged status of the document, material or other information;

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      (ii) May receive documents, materials or information, including confidential and

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privileged documents, materials or information, from the NAIC, its affiliates or subsidiaries and

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from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall

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maintain as confidential or privileged any document, material or information received with notice

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or the understanding that it is confidential or privileged under the laws of the jurisdiction that is

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the source of the document, material or information;

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      (iii) May enter into agreements governing sharing and use of information consistent with

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this subsection;

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      (iv) No waiver of any applicable privilege or claim of confidentiality in the documents,

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materials, or information shall occur as a result of disclosure to the commissioner under this

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section or as a result of sharing as authorized in this chapter;

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      (v) Nothing in this chapter shall prohibit the insurance commissioner from releasing

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final, adjudicated actions including for cause terminations that are open to public inspection

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pursuant to chapter 2 of title 38 to a database or other clearinghouse service maintained by the

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NAIC, its affiliates or subsidiaries; and

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      (vi) If the department releases to an unauthorized third party any documents, materials or

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other information provided to the department pursuant to this section, then the department shall

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be subject to a fine not to exceed one thousand dollars ($1,000) after a hearing on this violation

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brought in the Superior Court.

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      (g) (f) Penalties for Failing to Report. - An insurer, the authorized representative of the

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insurer, or insurance producer that fails to report as required under the provisions of this section

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or that is found to have reported with actual malice by a court of competent jurisdiction may, after

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notice and hearing, have its license or certificate of authority suspended or revoked and may be

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fined in accordance with section 42-14-16.

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     SECTION 2. Section 27-9-4.1 of the General Laws in Chapter 27-9 entitled "Casualty

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Insurance Rating" is hereby repealed.

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     27-9-4.1. Automobile insurance territories. -- The director of the department of

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business regulation shall formulate a plan of automobile insurance territories based upon the most

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recent available actuarial data.

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     SECTION 3. Section 42-14-18 of the General Laws in Chapter 42-14 entitled

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"Department of Business Regulation" is hereby amended to read as follows:

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     42-14-18. Form and rate filing fees. -- The following fees shall be charged for the

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services of the division of insurance in reviewing policy or certificate forms, as those terms are

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defined in section 27-29-2(f)(7), and related forms and rates that are required by law to be

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submitted by insurers, as that term is defined in section 27-29-2(e)(4), for review and approval by

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the director prior to use:

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      (1) For each policy or certificate form included in a single package, including any related

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forms, rates, and other documents submitted in the same package -- forty dollars ($40.00) forty-

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five dollars ($45.00); and

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      (2) For related forms or revised rates in connection with a policy that has been

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previously approved, submitted in a single package, charged based upon the number of policies

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involved -- twenty-five dollars ($25.00) thirty dollars ($30.00).

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      (3) Fees shall be submitted with each filing and shall be deposited as general revenue.

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These fees shall be in addition to any taxes and fees otherwise payable to the state.

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      (4) Before any form approved pursuant to chapter 27-2.5 may be used in the state of

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Rhode Island, the fees specified in this section in the amount of twenty-five dollars ($25.00) for

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each policy or certificate form included in a single package, including any related forms, rates,

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and other documents submitted in the same package and in the amount of fifteen dollars ($15.00)

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for related forms or revised rates in connection with a policy that has been previously approved,

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submitted in a single package, charged based upon the number of policies involved must be paid.

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     SECTION 4. Sections 1, 2 and 4 of this act shall take effect upon passage. Section 3 of

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this act shall take effect on January 1, 2013.

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LC01219

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO INSURANCE

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     This act would make changes to the state insurance laws which: (1) Repeal the reporting

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of producer terminations without cause; (2) Repeal the unnecessary requirement that the director

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establish automobile insurance territories; (3) Remove extraneous language in the motor vehicle

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appraiser statute and (4) Raise the fees paid by insurance companies for review of policy forms

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and rates from the amount established in 1993 when the statute was first enacted and lower fees

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for life insurance forms reviewed pursuant to the Interstate Insurance Regulation Compact.

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     Sections 1, 2, and 4 would take effect upon passage. Section 3 would take effect on

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January 1, 2013.

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LC01219

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