2014 -- S 2446

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LC004254

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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 MOTOR AND OTHER VEHICLES - SELF INSURANCE

     

     Introduced By: Senator David E.Bates

     Date Introduced: February 27, 2014

     Referred To: Senate Commerce

     (Revenue)

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 31-33-9 of the General Laws in Chapter 31-33 entitled "Safety

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Responsibility Violations - General Provisions" is hereby amended to read as follows:

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     31-33-9. Self-insurers. -- (a) Any person in whose name more than twenty-five (25)

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vehicles are registered in this state may qualify as a self-insurer by obtaining a certificate of self-

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insurance issued by the division of motor vehicles department of business regulation as provided

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in subsection (b) of this section.

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      (b) The division of motor vehicles department of business regulation may, in its

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discretion, upon the application of such a person, issue a certificate of self-insurance when it is

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satisfied that the person is possessed, and will continue to be possessed, of the ability to pay

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judgment obtained against the person. The certificate may be issued authorizing a person to act as

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a self-insurer for either property damage or bodily injury, or both.

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      (c) Upon not less than five (5) days' notice and a hearing pursuant to notice, the division

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of motor vehicles department of business regulation may upon reasonable grounds cancel a

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certificate of self-insurance. Failure to pay any judgment within thirty (30) days after the

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judgment shall have become final shall constitute a reasonable ground for the cancellation of a

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certificate of self-insurance.

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     (d) Entities applying to, or previously authorized to, permissibly self-insure are subject

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to the jurisdiction of the department of business regulation. The department of business regulation

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is authorized to promulgate and enforce rules and regulations that may be necessary to carry out

 

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the provisions of this section including, but not limited to:

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     (1) Obtaining and reviewing financial statements and related information necessary to

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ascertain the applicant’s ability to self-insure.

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     (2) Apportioning the cost of review to the applicant in a manner similar to that utilized to

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charge insurance companies for review and analysis of their financial statements.

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     (3) Imposing and enforcing upon entities authorized to permissibly self-insure any and all

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claims handling and settlement practices required of insurers in the settlement of claims.

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     SECTION 2. Section 31-34-2.1 of the General Laws in Chapter 31-34 entitled

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"Responsibility of Owners of Rental Vehicles" is hereby amended to read as follows:

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     31-34-2.1. Self-insurers. -- (a) Any person or company in whose name more than four

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hundred (400) vehicles are registered in this state may qualify as a self-insurer by obtaining a

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certificate of self-insurance issued by the division of motor vehicles department of business

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regulation as provided in subsection (b).

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      (b) Upon the application of the person or company, the division department of business

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regulation may issue a certificate of self-insurance at its discretion if it is satisfied that the person

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or company has and will have the ability to pay any judgment obtained against the person or

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company. The certificate may be issued authorizing a person or company to act as a self-insurer

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for either property damage or bodily injury, or both.

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      (c) Upon not less than five (5) days' notice and a hearing pursuant to notice, the division

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department of business regulation upon reasonable grounds may cancel a certificate of self-

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insurance. Failure to pay any judgment within thirty (30) days after the judgment has become

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final constitutes a reasonable ground for the cancellation of a certificate of self-insurance.

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     (d) Entities applying to or previously authorized to permissibly self-insure are subject to

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the jurisdiction of the department of business regulation. The department of business regulation is

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authorized to promulgate and enforce rules and regulations that may be necessary to carry out the

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provisions of § 31-34-2.1 including, but not limited to:

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     (1) Obtaining and reviewing financial statements and related information necessary to

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ascertain the applicant’s ability to self-insure.

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     (2) Apportioning the cost of review to the applicant in a manner similar to that utilized to

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charge insurance companies for review and analysis of their financial statements.

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     (3) Imposing and enforcing upon entities authorized to permissibly self-insure any and all

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claims handling and settlement practices required of insurers in the settlement of claims.

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     SECTION 3. Sections 31-47-2 and 31-47-7 of the General Laws in Chapter 31-47

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entitled "Motor Vehicle Reparations Act" are hereby amended to read as follows:

 

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     31-47-2. Definitions. -- As used in this chapter the term:

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      (1) "Accident" or "motor vehicle accident" means any accident involving a motor vehicle

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which that results in bodily injury to, or death of, any person, or damage to the property of any

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person in excess of five hundred dollars ($500).

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      (2) "Administrator " means the administrator of the division of motor vehicles in the

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department of revenue.

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      (3) "Commissioner" means the insurance commissioner of this state.

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      (4) "Dealer engaged in the business of leasing motor vehicles" means any person

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engaged in the business of regularly making available, offering to make available, or arranging

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for another person to use a motor vehicle pursuant to a bailment, lease, or other contractual

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arrangement.

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      (5) "Driver" means every person who drives or is in actual physical control of a motor

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vehicle.

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      (6) "Financial security bond" means for each motor vehicle a bond executed by the

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owner and by a surety company duly authorized to transact business in this state.

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      (7) "Financial security deposit" means for each motor vehicle the deposit with the

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assistant director of seventy-five thousand dollars ($75,000) in cash, or securities, such as may

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legally be purchased by savings banks or trust funds, of a market value of seventy-five thousand

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dollars ($75,000).

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      (8) "License" includes any license, permit, or privilege to operate a motor vehicle issued

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under the laws of this state including:

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      (i) Any temporary instruction permit or examiner's driving permit;

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      (ii) The privilege of any person to drive a motor vehicle whether or not the person holds

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a valid license; or

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      (iii) Any nonresident's operating privilege.

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      (9) "Motor vehicle" means every vehicle required to display registration plates for

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operation upon public highways of this state.

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      (10) "Nonresident" means every person who is not a resident of this state.

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      (11) "Nonresident's operating privilege" means the privilege conferred upon a

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nonresident by the laws of this state pertaining to the operation by that person of a motor vehicle,

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or the use of a motor vehicle owned by that person, in this state.

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      (12) "Owner" means a person who holds the legal title of a motor vehicle. If a motor

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vehicle is the subject of an agreement for conditional sale or lease with the right of purchase upon

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performance of the conditions stated in the agreement and with an immediate right of possession

 

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vested in the conditional vendee or lessee, the vendee or lessee is the owner. If a mortgagor of a

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motor vehicle is entitled to possession, the mortgagor is the owner.

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      (13) (i) "Owner's policy of liability insurance" means a policy:

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      (A) Affording coverage as defined in the minimum provisions prescribed in a regulation

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which that shall be promulgated by the commissioner. The commissioner, before promulgating

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the regulations or any amendments to them, shall consult with all insurers licensed to write

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automobile liability insurance in this state and shall not prescribe minimum provisions which that

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fail to reflect the provisions of automobile liability insurance policies issued within this state at

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the date of the regulation or amendment of it. Nothing contained in regulation or in this chapter

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shall prohibit any insurer from affording coverage under an owner's policy of liability insurance

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more liberal than that required by the minimum provisions. Every owner's policy of liability

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insurance shall provide insurance subject to the regulation against loss from the liability imposed

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by law for damages, including damages for care and loss of services, because of bodily injury to,

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or death of, any person and injury to or destruction of property arising out of the ownership,

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maintenance, use, or operation of a specific motor vehicle or motor vehicles within the state of

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Rhode Island or elsewhere in the United States, in North America, or the Dominion of Canada,

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subject to a limit, exclusive of interest and costs, with respect to each motor vehicle of twenty-

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five thousand dollars ($25,000) because of bodily injury to, or death of, one person in any one

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accident,; and subject to the limit for one person, to a limit of fifty thousand dollars ($50,000),

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because of bodily injury to, or death of, two (2) or more persons in any one accident,; and a limit

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of twenty-five thousand dollars ($25,000) because of injury to, or destruction of, property of

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others in any one accident,; or seventy-five thousand dollars ($75,000) combined single limit.

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Any insurer authorized to issue an owner's policy of liability insurance as provided for in this

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chapter may, pending the issue of the policy, make an agreement to be known as a binder, or may,

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in lieu of the policy, issue a renewal endorsement or evidence of renewal of an existing policy,

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each of which shall be construed to provide indemnity or protection in like manner and to the

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same extent as the policy. The provisions of this chapter shall apply to such binders, renewal

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endorsements, or evidences of renewal; and

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      (B) In the case of a vehicle registered in this state, a policy issued by an insurer duly

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authorized to transact business in this state; or

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      (C) In the case of a vehicle registered in another state in the name of a nonresident, either

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a policy issued by an authorized insurer, or a policy issued by an unauthorized insurer authorized

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to transact business in the state of the nonresident's residence if the unauthorized insurer files with

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the commissioner, in a form to be approved by him or her, a statement consenting to service of

 

LC004254 - Page 4 of 6

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process and declaring its policies shall be deemed to be varied to comply with the requirements of

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this chapter; and

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      (D) The form of which has been approved by the commissioner.

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      (ii) No such policy shall be issued or delivered in this state until a copy of the form of the

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policy shall have been on file with the commissioner for at least thirty (30) days, unless sooner

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approved in writing by the commissioner, nor, if within that period of thirty (30) days, the

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commissioner shall have notified the carrier in writing that in the commissioner's opinion

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specifying the reasons for it, the form of the policy does not comply with the laws of the state.

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      (14) "Person" includes every natural person, firm, partnership, association, or

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corporation.

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      (15) "Proof of financial security" means proof of ability to respond in damages for

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liability arising out of the ownership, maintenance, or use of a motor vehicle as evidenced by an

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owner's policy of liability insurance, a financial security bond, a financial security deposit, or

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qualification as a self insurer under this title, or in the case of a nonresident, under self-insurance

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provisions of the laws of the jurisdiction of that nonresident.

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      (16) "Registration" means registration certificates and registration plates issued under the

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laws of this state pertaining to the registration of motor vehicles.

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      (17) "Self insurer" means a person who shall have been determined by the assistant

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director department of business regulation, in accordance with this title, to be financially

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responsible.

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      (18) "State" when used in this chapter, unless the context clearly indicates otherwise,

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means any state, territory, or possession of the United States, the District of Columbia, or any

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province of the Dominion of Canada.

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     31-47-7. Self-insurers. -- The administrator of the division of motor vehicles director of

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the department of business regulation, in his or her discretion, may upon the application of a

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person having registered in his or her name in this state more than twenty-five (25) motor

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vehicles, issue a certificate of self insurance when he or she is reasonably satisfied that the person

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is possessed, and will continue to be possessed, of financial ability to respond to judgments

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obtained against the person, arising out of the ownership, maintenance, use, or operation of the

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person's motor vehicles. Entities applying to, or previously authorized to, permissibly self-insure

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are subject to the jurisdiction of the department of business regulation. Upon due notice and

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hearing, the assistant director of the department of business regulation may, in his or her

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discretion and upon reasonable grounds, cancel a certificate of self insurance. The department of

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business regulation is authorized to promulgate and enforce rules and regulations that may be

 

LC004254 - Page 5 of 6

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necessary to carry out the provisions of this section, including, but not limited to:

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     (1) Obtaining and reviewing financial statements and related information necessary to

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ascertain the applicant’s ability to self-insure.

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     (2) Apportioning the cost of review to the applicant in a manner similar to that utilized to

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charge insurance companies for review and analysis of their financial statements; and

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     (3) Imposing and enforcing upon entities authorized to permissibly self-insure any and all

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claims handling and settlement practices required of insurers in the settlement of claims.

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     SECTION 4. This act shall take effect upon passage.

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LC004254

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LC004254 - Page 6 of 6

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO MOTOR AND OTHER VEHICLES - SELF INSURANCE

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     This act would transfer the responsibility of determining whether an entity qualifies as a

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self-insurer from the division of motor vehicles to the department of business regulation.

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     This act would take effect upon passage.

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LC004254

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LC004254 - Page 7 of 6