2014 -- H 7535 SUBSTITUTE A

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LC004767/SUB A/3

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

RELATING TO INSURANCE - CASUALTY INSURANCE GENERALLY

     Introduced By: Representatives Keable, and Carnevale

     Date Introduced: February 26, 2014

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 27-8-11 of the General Laws in Chapter 27-8 entitled "Casualty

Insurance Generally" is hereby amended to read as follows:

     27-8-11. Regulations on cancellation and renewal. -- (a) In addition to, and not in lieu

of, any other power the commissioner has to issue rules and regulations, the commissioner of

insurance may promulgate, in accordance with the procedure established in chapter 35 of title 42,

reasonable rules and regulations concerning cancellation and renewal of liability and property

damage insurance for automobiles rated as private passenger automobiles, homeowners

insurance, residential fire insurance, or any components thereof. Those regulations may require

that the insurer shall furnish to the named insured the reason, or reasons, for cancellation or

nonrenewal. Those regulations shall also require that the insurer furnish, at least thirty (30) days

prior to renewal, written notice of material coverage modifications any coverage reductions,

elimination, or increased deductibles not made at the request of the insured. The notice shall

itemize and describe the policy coverage reductions, elimination, or increased deductibles and

shall be captioned "NOTICE OF REDUCTION IN COVERAGE". The policyholder shall be

notified that the policy renewal contains the "NOTICE OF REDUCTION IN COVERAGE" by

one of the following manners:

     (1) By mailing the "NOTICE OF REDUCTION IN COVERAGE" separate from the

renewal policy package mailing; or

     (2) By printing "NOTICE OF REDUCTION IN COVERAGE ENCLOSED" on the

renewal policy package envelope and including said reductions in the first few pages of the

renewal policy package; or

     (3) By printing "NOTICE OF REDUCTION IN COVERAGE ENCLOSED" on the first

page of the renewal policy package; or

     (4) If the renewal policy package is made available by email, the email notifying the

policyholder of the renewal shall contain a statement that the policy contains a "NOTICE OF

REDUCTION IN COVERAGE" and said reductions shall be in the first few pages of the

renewal policy package.

     These coverage changes must be approved by the insurance division with respect to those

types of insurance defined in section §27-8-1(1) -- (8), issued to non-business insured and bodily

injury and property damage liability coverage issued to non-business insured. There shall be no

liability on the part of, and no cause of action of any nature shall arise against, the commissioner

of insurance or any insurer, their authorized representatives, agents, or employees, or any firm,

person, or corporation furnishing to the insurer or commissioner information as to the reasons for

cancellation or nonrenewal,; for any statement made by any of them in any written notice of

cancellation or nonrenewal,; or in any other communication, oral or written, specifying the

reasons for cancellation or nonrenewal,; or for the providing of information pertaining to the

cancellation or nonrenewal,; or for statements made, or evidence submitted, at any hearing

conducted in connection with the cancellation or nonrenewal.

      (b) The commissioner shall promulgate regulations with respect to personal motor

vehicle insurance, homeowners insurance, and residential fire insurance, or any components of

that insurance requiring notification to policyholders upon renewal of any material changes in

policy deductibles, limits, coverage, conditions or definitions, unless the change was requested by

the policyholder coverage reductions, elimination, or increased deductibles not at the request of

the insured.

     SECTION 2. This act shall take effect on July 1, 2015.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO INSURANCE - CASUALTY INSURANCE GENERALLY

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     This act would require an insurer to send to an insured a notice captioned "NOTICE OF

REDUCTION IN COVERAGE" containing any coverage reductions, elimination, or increased

deductibles not made at the request of the insured.

     This act would take effect on July 1, 2015.

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