2023 -- H 5659

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LC001024

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2023

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A N   A C T

RELATING TO INSURANCE - CASUALTY INSURANCE RATING

     

     Introduced By: Representatives Morales, Henries, Giraldo, Biah, Sanchez, DeSimone,
Cruz, Felix, Alzate, and Stewart

     Date Introduced: February 17, 2023

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

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     SECTION 1. 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 and

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

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contingencies, to dividends, savings, or unabsorbed premium deposits allowed or returned by

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insurers to their policyholders, members, or subscribers, to past and prospective expenses both

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countrywide and those specially applicable to this state, and to all other relevant factors within and

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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, in

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establishing or maintaining that driver’s rate respecting the operation of a personal motor vehicle

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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 pounds (10,000 lbs.) or a

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motor 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 group

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

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

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

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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 operation

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

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set forth in this section and has not had any chargeable accidents or moving violations within three

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(3) years preceding the establishment of the rate of insurance or classification, shall not be penalized

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solely by reason of his or her age.

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     (b)(1) No insurance company organized to do business within this state shall make any

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distinction or discrimination as to the premiums or rates charged for automobile insurance policies,

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and determination of the rate class of the individual, on the basis of education level, race, ethnicity,

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disability, occupation, income, gender, zip code or adjacent zip code, census tract, nor insert in the

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policy any condition nor make any stipulation where the person insured shall bind himself or

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herself, his or her heirs, executors, administrators and assigners, to accept any less sum than the

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full value or amount of the policy in case of a claim accruing on the policy by reason of the claim

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of the person insured, other than those stipulations or conditions as are imposed upon all persons

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in similar cases, and any stipulation or condition made in this manner shall be void.

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     (2) The insurance company shall solely rely on the driving record of the individual with

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regard to the premiums or rates charged for automobile insurance policies and the acceptance or

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rejection of the application of the individual for insurance coverage.

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     (b)(c) 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 three thousand dollars

 

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($3,000) or more than two (2) nonchargeable loss occurrences, involving the insured, have taken

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place within the annual policy year.

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     (c)(d)(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 require

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

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in this subsection. Any hearing held under this section shall in all respects comply with the hearing

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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 the

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

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cause to be served upon the company an order to cease and desist from engaging in those practices.

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After the issuance of the cease and desist order, if the commissioner finds that the company has

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continued to engage in those practices, he or she shall impose upon the company a fine not to

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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)(e) 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)(f) 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 than

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three thousand dollars ($3,000).

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     (f)(g) 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 2. This act shall take effect on January 1, 2024 and apply prospectively to any

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policy for automobile insurance coverage issued or renewed on or after January 1, 2024.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO INSURANCE - CASUALTY INSURANCE RATING

***

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     This act would prohibit automobile insurance companies from utilizing education level,

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race, ethnicity, disability, occupation, income, gender, zip code or adjacent zip code, or census tract

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to determine automobile insurance rates, premiums, and/or eligibility for coverage. This act would

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also restrict the insurance companies to rely solely on the driving record of the individual with

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regard to premiums or rates changed for insurance policies or rejection of the individual's

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application for coverage. The department of business regulation would enforce the provisions of

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this act.

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     This act would take effect on January 1, 2024 and apply prospectively to any policy for

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automobile insurance coverage issued or renewed on or after January 1, 2024.

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