2013 -- S 0719

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LC01649

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO INSURANCE - UNFAIR DISCRIMINATION AGAINST SUBJECTS OF

ABUSE IN PROPERTY AND CASUALTY INSURANCE

     Introduced By: Senators Gallo, and Lynch

     Date Introduced: March 13, 2013

     Referred To: Senate Commerce

It is enacted by the General Assembly as follows:

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

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by adding thereto the following chapter:

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     CHAPTER 60.1

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UNFAIR DISCRIMINATION AGAINST SUBJECTS OF ABUSE IN PROPERTY AND

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CASUALTY INSURANCE

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     27-60.1-1. Short title. -- This chapter shall be known and may be cited as the "Unfair

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Discrimination Against Subjects of Abuse in Property and Casualty Insurance Act."

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     27-60.1-2. Purpose. -- The purpose of this chapter is to prohibit unfair discrimination by

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property and casualty insurers and insurance professionals on the basis of abuse status. Nothing in

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this chapter shall be construed to create or imply a private cause of action for a violation of this

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chapter.

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     27-60.1-3. Scope. -- This chapter applies to all property and casualty insurers and

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insurance professionals involved in issuing or renewing, in this state, a policy of property and

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casualty insurance.

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     27-60.1-4. Definitions. -- For the purposes of this chapter:

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      (1) “Abuse” means the occurrence of one or more of the following acts by a current or

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former family member, household member, intimate partner or caretaker :

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     (i) Attempting to cause or intentionally, knowingly or recklessly causing another person

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bodily injury, physical harm, severe emotional distress, psychological trauma, rape, sexual assault

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or involuntary sexual intercourse;

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     (ii) Knowingly engaging in a course of conduct or repeatedly committing acts toward

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another person including following the person without proper authority, under circumstances that

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place the person in reasonable fear of bodily injury or physical harm;

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     (iii) Subjecting another person to false imprisonment; or

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     (iv) Attempting to cause or intentionally, knowingly, or recklessly causing damage to

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property so as to intimidate or attempt to control the behavior of another person.

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     (2) “Abuse-related claim” means a claim under a property and casualty policy for a loss

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resulting from an act of abuse.

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     (3) “Abuse status” means the fact or perception that a natural person is, has been, or may

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be a subject of abuse, irrespective of whether the natural person has incurred abuse-related

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claims.

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     (4) “Commissioner” means the director of the department of business regulation or his or

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her designee.

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     (5) “Confidential abuse information” means information about acts of abuse or abuse

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status of a subject of abuse, the address and telephone number (home and work) of a subject of

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abuse or the status of an applicant or insured as a family member, employer or associate of, or a

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person in a relationship with, a subject of abuse.

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     (6) “Insurance professional” means a producer, broker, adjuster or third-party

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administrator as defined in the insurance laws of this state.

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     (7) “Insured” means the party named on a policy or certificate as the individual with legal

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rights to the benefits provided by such policy.

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     (8) “Insurer” means a person or other entity engaged in the business of property and

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casualty insurance in this state including all residual market mechanisms.

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     (9) “Policy” means a contract of insurance, including endorsements, riders or binders

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issued, proposed for issuance, or intended for issuance by an insurer or insurance professional.

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     (10) “Subject of abuse” means a natural person against whom an act of abuse has been

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directed; who has current or prior injuries, illnesses or disorders that resulted from abuse; or who

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seeks, may have sought or had reason to seek medical or psychological treatment for abuse; or

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protection, court-ordered protection or shelter from abuse.

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     27-60.1-5. Unfairly discriminatory acts relating to property and casualty insurance.

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-- (a) It is unfairly discriminatory to deny, refuse to issue, renew or reissue; to cancel or otherwise

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terminate; restrict or exclude coverage on or to add a premium differential to a property and

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casualty insurance policy on the basis of the applicant’s or insured’s abuse status.

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     (b) It is unfairly discriminatory to:

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     (1) Exclude or limit payment for a covered loss or deny a covered claim incurred as a

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result of abuse by a person other than a co-insured; or

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     (2) Fail to pay losses arising out of abuse to an innocent first party claimant to the extent

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of such claimant’s legal interest in the covered property if the loss is caused by the intentional act

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of an insured, or using other exclusions or limitations on coverage which the commissioner has

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determined unreasonably restrict the ability of subjects of abuse to be indemnified for such losses.

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     (c) This section shall not require payment in excess of the loss or policy limits.

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     (d) Nothing in this chapter shall be construed to prohibit an insurer or insurance

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professional from applying reasonable standards of proof to claims under this section.

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     (e) When the insurer or insurance professional has information in its possession that

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clearly indicates that the insured, applicant or claimant is a subject of abuse, it is unfairly

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discriminatory, by a person employed by or contracting with an insurer, to disclose or transfer

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confidential abuse information, as defined in this chapter, for any purpose or to any person,

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except:

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     (1) To the subject of abuse or an individual specifically designated in writing by the

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subject of abuse;

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     (2) When ordered by the commissioner or a court of competent jurisdiction or otherwise

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required by law;

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     (3) When necessary for a valid business purpose to transfer information that includes

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confidential abuse information that cannot reasonably be segregated without undue hardship,

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confidential abuse information may be disclosed only if the recipient has executed a written

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agreement to be bound by the prohibitions of this chapter in all respects and to be subject to the

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enforcement of this chapter by the courts of this state for the benefit of the applicant or the

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insured, and only to the following persons:

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     (i) A reinsurer that seeks to indemnify or indemnifies all or any part of a policy covering

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a subject of abuse and that cannot underwrite or satisfy its obligations under the reinsurance

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agreement without that disclosure;

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     (ii) A party to a proposed or consummated sale, transfer, merger or consolidation of all or

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part of the business of the insurer or insurance professional;

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     (iii) Medical or claims personnel contracting with the insurer or insurance professional,

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only where necessary to process an application or perform the insurer’s or insurance

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professional’s duties under the policy or to protect the safety or privacy of a subject of abuse (also

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includes parent or affiliate companies of the insurer or insurance professional that have service

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agreements with the insurer or insurance professional); or

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     (iv) With respect to address and telephone number, to entities with whom the insurer

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transacts business when the business cannot be transacted without the address and telephone

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number;

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     (4) To an attorney who needs the information to represent the insurer or insurance

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professional effectively, provided the insurer or insurance professional notifies the attorney of its

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obligations under this chapter and requests that the attorney exercise due diligence to protect the

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confidential abuse information consistent with the attorney’s obligation to represent the insurer or

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insurance professional; or

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     (5) To any other entities deemed appropriate by the commissioner.

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     (f) It is unfairly discriminatory to request information relating to acts of abuse or an

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applicant’s or insured’s abuse status, or to make use of that information, however obtained,

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except for the limited purposes of complying with legal obligations or verifying a person’s claim

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to be a subject of abuse.

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     (g) Paragraph (e)(3)(iii) does not preclude a subject of abuse from obtaining his or her

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insurance records.

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     (h) Paragraph (e)(3)(iv) does not prohibit a property and casualty insurer from asking an

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applicant or insured about a property and casualty claim, even if the claim is abuse-related, or

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from using information thereby obtained in evaluating and carrying out its rights and duties under

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the policy, to the extent otherwise permitted under this chapter and other applicable law.

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     27-60.1-6. Justification of Adverse Insurance Decisions. -- An insurer or insurance

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professional that takes an action not prohibited by section 27-60.1-5 that adversely affects an

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applicant or insured on the basis of claim or other underwriting information that the insurer or

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insurance professional knows or has reason to know is abuse-related shall explain the reason for

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its action to the applicant or insured in writing and shall be able to demonstrate that its action, and

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any applicable policy provision:

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     (1) Does not have the purpose of treating abuse status as an underwriting criterion; and

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     (2) Is otherwise permissible by law and applies in the same manner and to the same

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extent to all applicants and insureds with a similar claim or claims history without regard to

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whether the claims are abuse-related.

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     27-60.1-7. Insurance Protocols for Subjects of Abuse. -- Insurers shall develop and

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adhere to written policies specifying procedures to be followed by employees and by insurance

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professionals they contract with, for the purpose of protecting the safety and privacy of a subject

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of abuse and shall otherwise implement the provisions of this chapter when taking an application,

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investigating a claim, pursuing subrogation or taking any other action relating to a policy or claim

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involving a subject of abuse. Insurers shall distribute their written policies to employees and

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insurance professionals.

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     27-60.1-8. Effective Date. -- This chapter applies to all actions taken on or after the

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effective date, except where otherwise explicitly stated. Nothing in this chapter shall require an

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insurer or insurance professional to conduct a comprehensive search of its contract files existing

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on the effective date solely to determine which applicants or insureds are subjects of abuse.

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     SECTION 2. This act shall take effect upon passage.

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LC01649

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO INSURANCE - UNFAIR DISCRIMINATION AGAINST SUBJECTS OF

ABUSE IN PROPERTY AND CASUALTY INSURANCE

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     This act would prohibit discrimination against victims of domestic abuse in property and

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casualty insurance.

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     This act would take effect upon passage.

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LC01649

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