2017 -- H 5937

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LC001763

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2017

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A N   A C T

RELATING TO INSURANCE - FOREIGN INSURANCE COMPANIES

     

     Introduced By: Representative Raymond H. Johnston

     Date Introduced: March 16, 2017

     Referred To: House Corporations

     (Dept. of Business Regulation)

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 27-2-14 of the General Laws in Chapter 27-2 entitled "Foreign

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Insurance Companies" is hereby amended to read as follows:

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     27-2-14. Forwarding of process by commissioner.

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     (a) Whenever lawful process against a foreign insurance company shall be served upon

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the insurance commissioner, the commissioner shall forward a copy of the process served on him

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or her, by mail, postpaid, and directed to the person appointed by the insurance company to

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accept service of process on behalf of the company. The manner of forwarding shall be at the

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discretion of the insurance commissioner.

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     (b) Service upon the insurance commissioner shall be accomplished by regular mail or by

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whatever alternative method is designated by the commissioner.

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     (c) For each copy of process the insurance commissioner shall collect, for the use of the

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state, the sum of twenty-five dollars ($25.00), which shall be paid by the plaintiff at the time of

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the service; the fee is to be recovered by the plaintiff as part of the taxable costs, if he or she

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prevails in the suit.

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     SECTION 2. Section 27-9-4 of the General Laws in Chapter 27-9 entitled "Casualty

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Insurance Rating" is hereby amended to read as follows:

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     27-9-4. Considerations in making of rates -- Cancellation of policy.

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     (a) All rates shall be made in accordance with the following provisions:

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     (1) (i) Due consideration shall be given to past and prospective loss experience within

 

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and outside this state, to catastrophe hazards, if any, to a reasonable margin for underwriting

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profit and contingencies, to dividends, savings, or unabsorbed premium deposits allowed or

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returned by insurers to their policyholders, members, or subscribers, to past and prospective

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expenses both country wide and those specially applicable to this state, and to all other relevant

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factors within and outside this state; provided, that no consideration shall be given to:

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     (A) Any loss or incident involving a bus driver, while in the course of his or her

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employment for the Rhode Island public transit authority or private or municipal school bus

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companies, in establishing or maintaining that driver's rate respecting the operation of a personal

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motor vehicle or vehicles;

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     (B) Any loss or incident involving a law enforcement officer, while in the course of his or

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her employment for the state, city, town police departments, or federal law enforcement agency,

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in establishing or maintaining that driver's rate respecting the operation of a personal motor

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vehicle or vehicles; and

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     (C) Any loss or incident involving a commercial vehicle driver, while in the course of his

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or her employment, in establishing or maintaining that driver's rate respecting the operation of a

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personal motor vehicle(s);

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     (ii) It shall be the responsibility of a commercial vehicle driver to provide his or her

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insurance company with proof that the loss or incident took place in the course of employment

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while operating a commercial vehicle. For the purposes of this section, a "commercial vehicle"

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shall be a motor vehicle with a gross weight in excess of ten thousand (10,000) pounds or a motor

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vehicle used for public livery;

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     (2) The systems of expense provisions included in the rates for use by any insurer or

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group insurers may differ from those of other insurers or groups of insurers to reflect the

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requirements of the operating methods of any insurer or group with respect to any kind of

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insurance, or with respect to any subdivision or combination of insurance for which subdivision

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or combination separate expense provisions are applicable;

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     (3) Risks may be grouped by classifications for the establishment of rates and minimum

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premiums;

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     (4) Rates shall not be excessive, inadequate, or unfairly discriminatory; and

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     (5) In establishing or maintaining an insured's rate or classification respecting the

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operation of a personal motor vehicle, any insured sixty-five (65) years of age or older, who

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meets the criteria set forth in this section and has not had any chargeable accidents or moving

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violations within three (3) years preceding the establishment of the rate of insurance or

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classification, shall not be penalized solely by reason of their age.

 

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     (b) No insurance company shall fail to renew a private passenger automobile policy

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because of a loss of occurrence only, unless a chargeable loss occurrence of one thousand five

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hundred dollars ($1,500) or more than two (2) nonchargeable loss occurrences, involving the

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insured, have taken place within the annual policy year.

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     (c) (1) No insurance company shall fail to renew a private passenger automobile policy

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solely because the insured has attained the age of sixty-five (65) years or older;

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     (2) Whenever the commissioner of insurance shall have reason to believe that any

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insurance company has refused to renew a private passenger automobile policy solely because the

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applicant has reached the age of sixty-five (65) years or older, the commissioner shall notify the

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company that it may be in violation of this section and in his or her discretion he or she may

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require a hearing to determine whether or not the company has actually been engaged in the

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practice stated in this subsection. Any hearing held under this section shall in all respects comply

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with the hearing procedure provided in the Administrative Procedures Act, chapter 35 of title 42;

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     (3) If after the hearing the commissioner shall determine that the company has engaged in

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the practice of systematically failing to renew private passenger automobile policies because of

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the advanced age of the insured, he or she shall reduce his or her findings to writing and shall

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issue and cause to be served upon the company an order to cease and desist from engaging in

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those practices. After the issuance of the cease and desist order, if the commissioner finds that the

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company has continued to engage in those practices, he or she shall impose upon the company a

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fine not to exceed the amount of one thousand dollars ($1,000) for each separate violation.

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     (4) Any company aggrieved by any order or decision of the commissioner of insurance

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may appeal the order and decision to the superior court of Providence in accordance with the

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Administrative Procedures Act, chapter 35 of title 42.

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     (d) No insurance group, carrier or company in establishing any premium surcharge or

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penalty relative to a specific motor vehicle policy, shall consider any accident or any claim where

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any insured covered by that policy is fifty percent (50%) or less at fault.

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     (e) No insurance group, carrier or company shall assess any premium surcharge against

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any insured covered by a motor vehicle policy where a property damage claim payment is less

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than one thousand five hundred dollars ($1,500).

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     (f) No insurance group, carrier or company shall refuse to issue motor vehicle liability

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insurance, impose a surcharge or otherwise increase the rate for a motor vehicle policy solely

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because the applicant is a volunteer driver. Volunteer driver is defined as a person who provides

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services without compensation to a nonprofit agency or charitable organization.

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     SECTION 3. Section 27-9.1-4 of the General Laws in Chapter 27-9.1 entitled "Unfair

 

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Claims Settlement Practices Act" is hereby amended to read as follows:

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     27-9.1-4. "Unfair claims practices" defined.

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     (a) Any of the following acts by an insurer, if committed in violation of § 27-9.1-3,

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constitutes an unfair claims practice:

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     (1) Misrepresenting to claimants and insured relevant facts or policy provisions relating

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to coverage at issue;

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     (2) Failing to acknowledge and act with reasonable promptness upon pertinent

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communications with respect to claims arising under its policies;

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     (3) Failing to adopt and implement reasonable standards for the prompt investigation and

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settlement of claims arising under its policies;

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     (4) Not attempting in good faith to effectuate prompt, fair, and equitable settlement of

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claims submitted in which liability has become reasonably clear;

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     (5) Compelling insured, beneficiaries, or claimants to institute suits to recover amounts

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due under its policies by offering substantially less than the amounts ultimately recovered in suits

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brought by them;

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     (6) Refusing to pay claims without conducting a reasonable investigation;

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     (7) Failing to affirm or deny coverage of claims within a reasonable time after having

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completed its investigation related to the claim or claims;

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     (8) Attempting to settle or settling claims for less than the amount that a reasonable

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person would believe the insured or beneficiary was entitled by reference to written or printed

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advertising material accompanying or made part of an application;

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     (9) Attempting to settle or settling claims on the basis of an application that was

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materially altered without notice to, or knowledge or consent of, the insured;

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     (10) Making claims payments to an insured or beneficiary without indicating the

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coverage under which each payment is being made;

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     (11) Unreasonably delaying the investigation or payment of claims by requiring both a

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formal proof of loss form and subsequent verification that would result in duplication of

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information and verification appearing in the formal proof of loss form;

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     (12) Failing in the case of claims denials or offers of compromise settlement to promptly

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provide a reasonable and accurate explanation of the basis of those actions;

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     (13) Failing to provide forms necessary to present claims within ten (10) calendar days of

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a request with reasonable explanations regarding their use;

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     (14) Failing to adopt and implement reasonable standards to assure that the repairs of a

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repairer owned by or required to be used by the insurer are performed in a workmanlike manner;

 

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     (15) Misleading a claimant as to the applicable statute of limitations;

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     (16) Failing to respond to a claim within thirty (30) days, unless the insured shall agree to

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a longer period;

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     (17) Engaging in any act or practice of intimidation, coercion, threat or misrepresentation

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of consumers rights, for or against any insured person, claimant, or entity to use a particular rental

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car company for motor vehicle replacement services or products; provided, however, nothing

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shall prohibit any insurance company, agent or adjuster from providing to such insured person,

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claimant or entity the names of a rental car company with which arrangements have been made

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with respect to motor vehicle replacement services; provided, that the rental car company is

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licensed pursuant to Rhode Island general laws § 31-5-33; or

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     (18) Refusing to honor a "direction to pay" executed by an insured, claimant, indicating

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that the insured or claimant, wishes to have the insurance company directly pay his or her motor

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vehicle replacement vehicle rental benefit to the rental car company of the consumer's choice;

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provided, that the rental car company is licensed pursuant to Rhode Island general laws § 31-5-

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33. Nothing in this section shall be construed to prevent the insurance company's ability to

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question or challenge the amount charged, in accordance with its policy provisions, and the

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requirements of the department of business regulation;

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     (19) Modifying any published manual (i.e. motors, mitchells, or any automated appraisal

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system) relating to auto body repair without prior agreement between the parties;

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     (20) Failing to use a manual or system in its entirety in the appraisal of a motor vehicle;

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     (21) Refusing to compensate an auto body shop for documented charges as identified

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through industry recognized software programs or systems for paint and refinishing materials in

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auto body repair claims; and/or

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     (22) Failing to comply with the requirements of Rhode Island General Laws § 31-47-

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12.1.

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     (23) Failure to have an appraisal performed by a licensed appraiser where the motor

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vehicle has sustained damage estimated to exceed two thousand five hundred dollars ($2,500).

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Said licensed appraiser referred to herein must be unaffiliated with the repair facility repairing the

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subject motor vehicle.

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     (24) Failure to perform a supplemental appraisal inspection of a vehicle within four (4)

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business days after a request is received from an auto body repair shop.

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     (25) Designating a motor vehicle a total loss if the cost to rebuild or reconstruct the motor

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vehicle to its pre-accident condition is less than seventy-five percent (75%) of the "fair market

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value" of the motor vehicle immediately preceding the time it was damaged:

 

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     (i) For the purposes of this subdivision, "fair market value" means the retail value of a

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motor vehicle as set forth in a current edition of a nationally recognized compilation of retail

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values commonly used by the automotive industry to establish values of motor vehicles;

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     (ii) Nothing herein shall be construed to require a vehicle be deemed a total loss if the

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total cost to rebuild or reconstruct the motor vehicle to its pre-accident condition is greater than

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seventy- five percent (75%) of the fair market value of the motor vehicle immediately preceding

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the time it was damaged; and

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     (iii) Nothing herein shall prohibit an insurance company from agreeing to deem a vehicle

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a total loss at the vehicle owner's request and with the vehicle owner's express written

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authorization, if the cost to rebuild or reconstruct the motor vehicle to its pre-accident condition is

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less than seventy-five percent (75%) of the "fair market value" of the motor vehicle immediately

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preceding the time it was damaged.

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     (b) (1) Nothing contained in subsections 27-9.1-4(a)(19), (20), & (21) of this chapter

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shall be construed to interfere with an auto body repair facility's contract with an insurance

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company.

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     (2) If an insurance company and auto body repair facility have contracted under a direct

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repair program or any similar program thereto the provisions of subsections 27-9.1-4(a)(19), (20)

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& (21) shall not apply.

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     (3) If the insured or claimant elects to have the vehicle repaired at a shop of his or her

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choice, the insurer shall not limit or discount the reasonable repair costs based upon the charges

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that would have been incurred had the vehicle been repaired by the insurer's chosen shop(s).

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     (26) Negotiating, or effecting the settlement of, a claim for loss or damage covered by an

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insurance contract with an unlicensed public adjuster acting on behalf of an insured. Nothing

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contained in this section shall be construed to preclude an insurer from dealing with any

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individual or entity that is not required to be licensed under chapter 10 of title 27.

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     SECTION 4. Sections 27-18-19 and 27-18-67 of the General Laws in Chapter 27-18

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entitled "Accident and Sickness Insurance Policies" are hereby amended to read as follows:

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     27-18-19. Insurance exempt from chapter.

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     Nothing in the chapter shall apply to or affect:

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     (1) Any policy of workers' compensation insurance or any policy of liability insurance

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with or without supplementary expense coverage in the policy;

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     (2) Any policy or contract of reinsurance; or

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     (3) Any blanket or group policy of insurance; or

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     (4) Life insurance, endowment, or annuity contracts, or contracts supplemental to those

 

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contracts, which contain only those provisions relating to accident and sickness insurance as: (i)

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provide additional benefits in case of death or dismemberment or loss of sight by accident, or (ii)

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operate to safeguard those contracts against lapse, or to give a special surrender value or special

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benefit or an annuity in the event that the insured or annuitant shall become totally and

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permanently disabled, as defined by the contract or supplemental contract.

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     27-18-67. Reimbursement for orthotic and prosthetic services.

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     (a) As used in this section:

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     (1) "Federal reimbursement rates" means the current listed fee schedule from the Centers

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for Medicare and Medicaid Services, listing the current Healthcare Common Procedure Coding

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system (HCPCS) and the corresponding reimbursement rates.

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     (2) "Orthosis" means a custom fabricated brace or support that is designed based on

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medical necessity. Orthosis does not include prefabricated or direct-formed orthotic devices, as

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defined in this section, or any of the following assistive technology devices: commercially

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available knee orthoses used following injury or surgery; spastic muscle-tone inhibiting orthoses;

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upper extremity adaptive equipment; finger splints; hand splints; wrist gauntlets; face masks used

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following burns; wheelchair seating that is an integral part of the wheelchair and not worn by the

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patient independent of the wheelchair; fabric or elastic supports; corsets; low-temperature formed

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plastic splints; trusses; elastic hose; canes; crutches; cervical collars; dental appliances; and other

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similar devices as determined by the director of the department of health, such as those

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commonly carried in stock by a pharmacy, department store, corset shop, or surgical supply

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facility.

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     (3) "Orthotics" means the science and practice of evaluating measuring, designing,

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fabricating, assembling, fitting, adjusting or servicing, as well as providing the initial training

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necessary to accomplish the fitting of, an orthosis for the support, correction, or alleviation of

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neuromuscular or musculoskeletal dysfunction, disease, injury or deformity. The practice of

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orthotics encompasses evaluation, treatment, and consultation; with basic observational gait and

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postural analysis, orthotists assess and design orthoses to maximize function and provide not only

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the support but the alignment necessary to either prevent or correct a deformity or to improve the

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safety and efficiency of mobility or locomotion or both. Orthotic practice includes providing

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continuing patient care in order to assess its effect on the patient's tissues and to assure proper fit

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and function of the orthotic device by periodic evaluation.

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     (4) "Prosthesis" means an artificial limb that is alignable or, in lower-extremity

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applications capable of weight bearing. Prosthesis means an artificial medical device that is not

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surgically implanted and that is used to replace a missing limb, appendage, or other external

 

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human body part including an artificial limb, hand, or foot. The term does not include artificial

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eyes, ears, noses, dental appliances, osotmy products, or devices such as eyelashes or wigs.

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     (5) "Prosthetics" means the science and practice of evaluation, measuring, designing,

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fabricating, assembling, fitting, aligning, adjusting or servicing, as well as providing the initial

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training necessary to accomplish the fitting of, a prosthesis through the replacement of external

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parts of a human body lost due to amputation or congenital deformities or absences. The practice

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of prosthetics also includes the generation of an image, form, or mold that replicates the patient's

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body or body segment and that requires rectification of dimensions, contours and volumes for use

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in the design and fabrication of a socket to accept a residual anatomic limb to, in turn, create an

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artificial appendage that is designed either to support body weight or to improve or restore

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function or cosmesis, or both. Involved in the practice of prosthetics is observational gait analysis

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and clinical assessment of the requirements necessary to refine and mechanically fix the relative

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position of various parts of the prosthesis to maximize function, stability, and safety of the

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patient. The practice of prosthetics includes providing and continuing patient care in order to

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assess the prosthetic device's effect on the patient's tissues and to assure proper fit and function of

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the prosthetic device by periodic evaluation.

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     (6) "Private insurance company" means any insurance company, or management

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company hired by an insurance company, who is any of the following:

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     (i) based in the state of Rhode Island; or

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     (ii) provides coverage for citizens for the state of Rhode Island; or

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     (iii) allows subscribing patients to seek prosthetic or orthotic services in the state of

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Rhode Island.

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     (b) Every individual or group health insurance contract, plan or policy delivered, issued

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for delivery or renewed in this state on or after January 1, 2006, which provides medical coverage

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that includes coverage for physician services in a physician's office and every policy, which

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provides major medical or similar comprehensive type coverage shall provide coverage for

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benefits for orthotic and prosthetic devices that equal those benefits provided for under federal

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laws for health insurance for the aged and disabled pursuant to 42 U.S.C. sections 1395K, 13951

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and 1395M and 42 CFR 414.202, 414.210, 414.228, and 410.100 as applicable to this section.

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     (c) A health insurance contract, plan or policy may require prior authorization for orthotic

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and prosthetic devices in the same manner that prior authorization is required for any other

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covered benefit.

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     (d) Covered benefits for orthotic or prosthetic devices shall be limited to the most

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appropriate model that adequately meets the medical needs of the patient as determined by the

 

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insured's treating physician.

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     (e) The repair and replacement of orthotic or prosthetic devices also shall be covered

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subject to co-payments and deductibles, unless necessitated by misuse or loss.

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     (f) An insurer may require, if coverage is provided through a managed care plan, that

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benefits mandated pursuant to this section be covered benefits only if the orthotic or prosthetic

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devices are provided by a vendor and orthotic or prosthetic services are rendered by a provider

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who is licensed by the state of Rhode Island to provide orthotics and prosthetics.

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     (g) This chapter section shall not apply to insurance coverage providing benefits for: (1)

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Hospital confinement indemnity; (2) Disability income; (3) Accident only; (4) Long-term care;

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(5) Medicare supplement; (6) Limited benefit health; (7) Specified disease indemnity; (8)

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Sickness or bodily injury or death by accident or both; and (9) Other limited benefit policies.

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     SECTION 5. Section 27-3.2-5 of the General Laws in Chapter 27-3.2 entitled

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"Continuing Education Requirements" is hereby repealed.

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     27-3.2-5. Continuing education advisory board.

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     There is established the continuing education advisory board. This board shall consist of

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two (2) representatives of the Rhode Island Life Underwriters Association, three (3)

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representatives of the Independent Insurance Agents of Rhode Island, two (2) representatives of

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the Chartered Life Underwriters, and two (2) representatives of the Chartered Property and

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Casualty Underwriters. The board members shall be appointed by the commissioner and shall

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serve two (2) year terms. The board shall meet at least once a year and additionally as required.

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This board shall advise the insurance commissioner on the plans and operations of the continuing

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education program for any person licensed pursuant to this title and not exempt under § 27-3.2-3.

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     SECTION 6. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO INSURANCE - FOREIGN INSURANCE COMPANIES

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     This act would: (1) eliminate the continuing education board (CEB) for insurance

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providers; (2) eliminate the requirement that service of process be forwarded to insurance

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companies by certified mail; (3) prohibit the negotiation of insurance claims with unlicensed

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public adjusters; (4) prohibit insurer from excluding coverage to volunteer drivers and (5) remove

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an exemption for blanket and group policies from the accident and sickness laws.

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     This act would take effect upon passage.

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