2023 -- H 6371

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LC002603

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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 STATUTES AND STATUTORY CONSTRUCTION

     Introduced By: Representatives Blazejewski, and Chippendale

     Date Introduced: May 05, 2023

     Referred To: House Judiciary

     It is enacted by the General Assembly as follows:

ARTICLE 1 -- STATUTORY REENACTMENT

     SECTION 1. It is the express intention of the General Assembly to reenact the entirety of

Title 7 and chapters 19 through the end of title 27 of the General Laws of R.I., including all

chapters and sections therein and any chapters and sections thereof not included in this act may be,

and are hereby, reenacted as if fully set forth herein.

     SECTION 2. Sections 7-12.1-110, 7-12.1-903.1, 7-12.1-904, 7-12.1-912, 7-12.1-913, 7-

12.1-1006, 7-12.1-1009, 7-12.1-1011, 7-12.1-1012, 7-12.1-1101 and 7-12.1-1125 of the General

Laws in Chapter 7-12.1 entitled "Uniform Partnership Act [Effective January 1, 2023.]" are hereby

amended to read as follows:

     7-12.1-110. Application to existing relationships. [Effective January 1, 2023.]

     (a) This chapter governs only:

     (1) A partnership formed on or after January 1, 2023; and

     (2) Except as otherwise provided in subsection (c) of this section, a partnership formed

before January 1, 2023, which elects, in the manner provided in its partnership agreement or by law

for amending the partnership agreement, to be subject to this chapter.

     (b) Except as otherwise provided in subsection (c) of this section, on and after January 1,

2023 2024, this chapter governs all partnerships.

     (c) With respect to a partnership that elects pursuant to subsection (a)(2) of this section to

be subject to this chapter, after the election takes effect the provisions of this chapter relating to the

liability of the partnership’s partners to third parties apply to:

     (1) A third party that had not done business with the partnership in the year before the

election took effect; and

     (2) A third party that had done business with the partnership in the year before the election

took effect only if the third party knows or has been notified of the election.

     7-12.1-903.1. Issuance of certificates of revocation. [Effective January 1, 2023.]

     (a) Upon revoking any such certificate of a limited liability partnership, the secretary of

state shall:

     (1) Issue a certificate of revocation in duplicate;

     (2) File one of the certificates in the secretary of state’s office;

     (3) Send to the limited liability partnership by regular mail a certificate of revocation,

addressed to the registered agent of the limited liability partnership in this state on file with the

secretary of state’s office; provided, however, that if a prior mailing addressed to the address of the

registered agent of the limited liability partnership in this state currently on file with the secretary

of state’s office has been returned to the secretary of state as undeliverable by the United States

Postal Service for any reason, or if the revocation certificate is returned as undeliverable to the

secretary of state’s office by the United States Postal Service for any reason, the secretary of state

shall give notice as follows:

     (i) To the limited liability partnership at its principal office of record as shown in its most

recent annual report, and no further notice shall be required; or

     (ii) In the case of a limited liability partnership that has not yet filed an annual report, then

to the domestic limited liability company limited liability partnership at the principal office in

the articles of organization statement of qualification of limited liability partnership or to the

authorized person listed on the articles of organization, and no further notice shall be required.

     (b) An administrative revocation under this section affects only the partnership’s status as

a limited liability partnership and is not an event causing dissolution of the partnership.

     (c) The revocation of a limited liability partnership does not terminate the authority of its

registered agent.

     7-12.1-904. Reinstatement. [Effective January 1, 2023.]

     (a) A partnership whose statement of qualification has been revoked administratively under

§ 7-12.1-903 may apply to the secretary of state for reinstatement of the statement of qualification

not later than two (2) years after the effective date of the revocation. The application must be

accompanied by a certificate of good standing from the Rhode Island division of taxation and state:

     (1) The name of the partnership at the time of the administrative revocation of its statement

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of qualification and, if needed, a different name that satisfies § 7-12.1-902;

     (2) The address of the principal office of the partnership and the name and street and

mailing addresses of its registered agent;

     (3) The effective date of administrative revocation of the partnership’s statement of

qualification;

     (4) On the payment by the limited liability partnership of a penalty in the amount of fifty

dollars ($50.00) for each year or part of year that has elapsed since the issuance of the certificate

of revocation; and

     (5) That the grounds for revocation did not exist or have been cured.

     (b) To have its statement of qualification reinstated, a partnership must pay all fees, taxes,

interest, and penalties that were due to the secretary of state or tax administrator at the time of the

administrative revocation and all fees, taxes, interest, and penalties that would have been due to the

secretary of state or tax administrator while the partnership’s statement of qualification was revoked

administratively.

     (c) If the secretary of state determines that an application under subsection (a) of this

section contains the required information, is satisfied that the information is correct, and determines

that all payments required to be made to the secretary of state or tax administrator by subsection

(b) of this section have been made, the secretary of state shall:

     (1) Cancel the statement of revocation and prepare a statement of reinstatement that states

the secretary of state’s determination and the effective date of reinstatement; and

     (2) File the statement of reinstatement and serve a copy on the partnership.

     (d) When reinstatement under this section has become effective, the following rules apply:

     (1) The reinstatement relates back to and takes effect as of the effective date of the

administrative revocation.

     (2) The partnership’s status as a limited liability partnership continues as if the revocation

had not occurred.

     (3) The rights of a person arising out of an act or omission in reliance on the revocation

before the person knew or had notice of the reinstatement are not affected.

     7-12.1-912. Service of process, notice, or demand. [Effective January 1, 2023.]

     (a) A limited liability partnership or registered foreign limited liability partnership may be

served with any process, notice, or demand required or permitted by law by serving its registered

agent.

     (b) If a limited liability partnership or registered foreign limited liability partnership fails

to appoint or maintain a registered agent in this state, or whenever its registered agent cannot with

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reasonable diligence be found at the registered office, then the secretary of state is an agent of the

corporation limited liability partnership upon whom any process, notice, or demand may be

served. Service on the secretary of state of any process, notice, or demand is made by delivering to

and leaving with him or her the secretary of state or with any clerk having charge of the

corporation department of his or her office, duplicate copies of the process, notice, or demand. In

the event any process, notice, or demand is served on the secretary of state, the secretary of state

shall immediately forward one of the copies by certified mail, addressed to the corporation limited

liability partnership at its registered office. Any service upon the secretary of state is returnable

in not less than thirty (30) days.

     (c) The secretary of state shall maintain a record of any such service setting forth the name

of the plaintiff and defendant, the title, docket number and nature of the proceeding in which

process has been served upon the secretary of state, the fact that service has been effected pursuant

to this subsection, the return date thereof, and the day and hour when the service was made. The

secretary of state shall not be required to retain such information for a period longer than five (5)

years from receipt of the service of process.

     (d) Service of process, notice, or demand on a registered agent must be in a written record.

     (e) Service of process, notice, or demand may be made by other means under law other

than this chapter.

     7-12.1-913. Annual report for secretary of state. [Effective January 1, 2023.]

     (a) A limited liability partnership or registered foreign limited liability partnership shall

deliver to the secretary of state for filing an annual report that states:

     (1) The name of the partnership or registered foreign partnership;

     (2) The street and mailing addresses of its principal office;

     (3) The name of at least one partner;

     (4) In the case of a foreign partnership, its jurisdiction of formation and any alternate name

adopted under § 7-12.1-1006;

     (5) A brief statement of the character of the business in which the limited liability

partnership is actually engaged in this state; and

     (6) Any additional information that is required by the secretary of state.

     (b) The annual report must be made on forms prescribed and furnished by the secretary of

state, and the information in the annual report must be current as of the date the report is signed by

the limited liability partnership or registered foreign limited liability partnership.

     (c) The first annual report must be filed with the secretary of state after February 1, and

before May 1, of the year following the calendar year in which the limited liability partnership’s

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statement of qualification became effective or the registered foreign limited liability partnership

registered to do business in this state. Subsequent annual reports must be filed with the secretary of

state after February 1, and before May 1, of each calendar year thereafter. Proof to the satisfaction

of the secretary of state that prior to May 1 the report was deposited in the United States mail in a

sealed envelope, properly addressed, with postage prepaid, is deemed to be a compliance with this

requirement.

     (d) If the secretary of state finds that the annual report conforms to the requirements of this

chapter, the secretary of state shall file the report. If an annual report does not contain the

information required by this section, the secretary of state promptly shall notify the reporting

limited liability partnership or registered foreign limited liability partnership in a record and return

the report for correction, in which event the penalties subsequently prescribed for failure to file the

report within the time previously provided do not apply if the report is corrected to conform to the

requirements of this chapter and returned to the secretary of state within thirty (30) days from the

date on which it was mailed to the corporation limited liability partnership by the secretary of

state.

     (e) Each limited liability partnership, domestic or foreign, that fails or refuses to file its

annual report for any year within thirty (30) days after the time prescribed by this chapter is subject

to a penalty of twenty-five dollars ($25.00) per year.

     7-12.1-1006. Noncomplying name of foreign limited liability partnership. [Effective

January 1, 2023.]

     (a) A foreign limited liability partnership whose name does not comply with § 7-12.1-902

may not register to do business in this state until it adopts, for the purpose of doing business in this

state, an alternate name that complies with § 7-12.1-902. A partnership that registers under an

alternate name under this subsection need not comply with § 7-16-902 or 7-1.2-402. A

partnership that registers under an alternate name under this subsection need not comply with this

state’s fictitious name statute. After registering to do business in the state with an alternate name,

a partnership shall do business in this state under:

     (1) The alternate name;

     (2) The partnership’s name, with the addition of its jurisdiction of formation; or

     (3) A name the partnership is authorized to use under the state’s fictitious name statute to

include, but not be limited to, § 7-16-902.1 or 7-1.2-402.

     (b) If a registered foreign limited liability partnership changes its name to one that does not

comply with § 7-12.1-902, it may not do business in this state until it complies with subsection (a)

of this section by amending its registration to adopt an alternate name that complies with § 7-12.1-

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902.

     7-12.1-1009. Transfer of registration. [Effective January 1, 2023.]

     (a) When a registered foreign limited liability partnership has merged into a foreign entity

that is not registered to do business in this state or has converted to a foreign entity required to

register with the secretary of state to do business in this state, the foreign entity shall deliver to the

secretary of state for filing an application for transfer of registration. The application must state:

     (1) The name of the registered foreign limited liability partnership before the merger or

conversion;

     (2) That before the merger or conversion the registration pertained to a foreign limited

liability partnership;

     (3) The name of the applicant foreign entity into which the foreign limited liability

partnership has merged or to which it has been converted and, if the name does not comply with §

7-12.1-902, an alternate name adopted pursuant to § 7-12.1-1006(a); and

     (4) The type of entity of the applicant foreign entity and its jurisdiction of formation;

     (b) An application for authority to transact business in the state of Rhode Island for the

resulting entity type and a certificate of legal existence or good standing issued by the proper officer

of the state or country under the laws of which the resulting entity has been formed must

accompany the application for transfer of registration.

     (c) When an application for transfer of registration takes effect, the registration of the

foreign limited liability limited partnership to do business in this state is transferred without

interruption to the foreign entity into which the partnership has merged or to which it has been

converted.

     7-12.1-1011. Issuance of certificates of revocation. [Effective January 1, 2023.]

     (a) Upon revoking any such certificate of registration of limited liability partnership, the

secretary of state shall:

     (1) Issue a certificate of revocation in duplicate;

     (2) File one of the certificates in the secretary of state’s office;

     (3) Send to the limited liability partnership by regular mail a certificate of revocation,

addressed to the registered agent of the limited liability partnership in this state on file with the

secretary of state’s office; provided, however, that if a prior mailing addressed to the address of the

registered agent of the limited liability partnership in this state currently on file with the secretary

of state’s office has been returned to the secretary of state as undeliverable by the United States

Postal Service for any reason, or if the revocation certificate is returned as undeliverable to the

secretary of state’s office by the United States Postal Service for any reason, the secretary of state

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shall give notice as follows:

     (i) To the limited liability partnership at its principal office of record as shown in its most

recent annual report, and no further notice shall be required; or

     (ii) In the case of a limited liability partnership that has not yet filed an annual report, then

to the principal office listed in the certificate of registration, and no further notice shall be required.

     (b) The authority of the registered foreign limited liability partnership to do business in this

state ceases on the effective date of the certificate of revocation, or to apply for reinstatement

under § 7-12.1-1012 unless before that date the partnership cures each ground for revocation

stated in the notice.

     (c) The revocation of a limited liability partnership does not terminate the authority of its

registered agent.

     7-12.1-1012. Reinstatement. [Effective January 1, 2023.]

     (a) Within two (2) years after issuing a certificate of revocation as provided in § 7-12.1-

1011, the secretary of state may withdraw the certificate of revocation and retroactively reinstate

the limited liability partnership in good standing as if its certificate of registration of limited liability

partnership had not been revoked except as subsequently provided:

     (1) On the filing by the limited liability partnership of the documents it had previously

failed to file and payment of any fees it had previously failed to pay as set forth in §§ 7-12.1-

1006(a)(3) through 7-12.1-1006(a)(7) 7-12.1-1010(a)(3) through (a)(7).

     (2) On the payment by the limited liability partnership of a penalty in the amount of fifty

dollars ($50.00) for each year or part of year that has elapsed since the issuance of the certificate

of revocation.

     (b) If, as permitted by the provisions of this chapter or chapter 1.2, 6, 12, or 13.1 of this

title, another limited liability company, business or nonprofit corporation, registered limited

liability partnership or a limited liability partnership, or in each case domestic or foreign, authorized

and qualified to transact business in this state, bears or has filed a fictitious business name statement

as to or reserved or registered a name that is the same as, the name of the limited liability partnership

with respect to which the certificate of revocation is proposed to be withdrawn, then the secretary

of state shall condition the withdrawal of the certificate of revocation on the reinstated limited

liability partnership amending its certificate of registration so as to designate a name that meets the

requirements of § 7-12.1-902 by adopting an alternate name pursuant to § 7-12.1-1006(a).

     (c) When reinstatement under this section has become effective, the following rules apply:

     (1) The reinstatement relates back to and takes effect as of the effective date of the

certificate of revocation.

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     (2) The limited liability partnership resumes carrying on its activities and affairs as if the

revocation had not occurred.

     (3) The rights of a person arising out of an act or omission in reliance on the revocation

before the person knew or had notice of the reinstatement are not affected.

     7-12.1-1101. Definitions. [Effective January 1, 2023.]

     As used in this chapter:

     (1) “Acquired entity” means the entity, all of one or more classes or series of interests of

which are acquired in an interest exchange.

     (2) “Acquiring entity” means the entity that acquires all of one or more classes or series of

interests of the acquired entity in an interest exchange.

     (3) "Articles of merger" means a statement under § 7-12.1-1125.

     (3)(4) “Conversion” means a transaction authorized by §§ 7-12.1-1141 through 7-12.1-

1146.

     (4)(5) “Converted entity” means the converting entity as it continues in existence after a

conversion.

     (5)(6) “Converting entity” means the domestic entity that approves a plan of conversion

pursuant to § 7-12.1-1143 or the foreign entity that approves a conversion pursuant to the law of

its jurisdiction of formation.

     (6)(7) “Distributional interest” means the right under an unincorporated entity’s organic

law and organic rules to receive distributions from the entity.

     (7)(8) “Domestic”, with respect to an entity, means governed as to its internal affairs by

the law of this state.

     (8)(9) “Domesticated limited liability partnership” means a domesticating limited liability

partnership as it continues in existence after a domestication.

     (9)(10) “Domesticating limited liability partnership” means the domestic limited liability

partnership that approves a plan of domestication pursuant to § 7-12.1-1153 or the foreign limited

liability partnership that approves a domestication pursuant to the law of its jurisdiction of

formation.

     (10)(11) “Domestication” means a transaction authorized by §§ 7-12.1-1151 through 7-

12.1-1156.

     (11)(12) “Entity”:

     (i) Means:

     (A) A business corporation;

     (B) A nonprofit corporation;

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     (C) A general partnership, including a limited liability partnership;

     (D) A limited partnership, including a limited liability limited partnership;

     (E) A limited liability company;

     (F) A general cooperative association;

     (G) A limited cooperative association;

     (H) An unincorporated nonprofit association;

     (I) A statutory trust, business trust, or common-law business trust; or

     (J) Any other person that has:

     (I) A legal existence separate from any interest holder of that person; or

     (II) The power to acquire an interest in real property in its own name; and

     (ii) Does not include:

     (A) An individual;

     (B) A trust with a predominantly donative purpose or a charitable trust;

     (C) An association or relationship that is not an entity listed in subsection (11)(i) of this

section and is not a partnership under the rules stated in § 7-12.1-202(c) or a similar provision of

the law of another jurisdiction;

     (D) A decedent’s estate; or

     (E) A government or a governmental subdivision, agency, or instrumentality.

     (12)(13) “Filing entity” means an entity whose formation requires the filing of a public

organic record. The term does not include a limited liability partnership.

     (13)(14) “Foreign”, with respect to an entity, means an entity governed as to its internal

affairs by the law of a jurisdiction other than this state.

     (14)(15) “Governance interest” means a right under the organic law or organic rules of an

unincorporated entity, other than as a governor, agent, assignee, or proxy, to:

     (i) Receive or demand access to information concerning, or the books and records of, the

entity;

     (ii) Vote for or consent to the election of the governors of the entity; or

     (iii) Receive notice of or vote on or consent to an issue involving the internal affairs of the

entity.

     (15)(16) “Governor” means:

     (i) A director of a business corporation;

     (ii) A director or trustee of a nonprofit corporation;

     (iii) A general partner of a general partnership;

     (iv) A general partner of a limited partnership;

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     (v) A manager of a manager-managed limited liability company;

     (vi) A member of a member-managed limited liability company;

     (vii) A director of a general cooperative association;

     (viii) A director of a limited cooperative association;

     (ix) A manager of an unincorporated nonprofit association;

     (x) A trustee of a statutory trust, business trust, or common-law business trust; or

     (xi) Any other person under whose authority the powers of an entity are exercised and

under whose direction the activities and affairs of the entity are managed pursuant to the organic

law and organic rules of the entity.

     (16)(17) “Interest” means:

     (i) A share in a business corporation;

     (ii) A membership in a nonprofit corporation;

     (iii) A partnership interest in a general partnership;

     (iv) A partnership interest in a limited partnership;

     (v) A membership interest in a limited liability company;

     (vi) A share in a general cooperative association;

     (vii) A member’s interest in a limited cooperative association;

     (viii) A membership in an unincorporated nonprofit association;

     (ix) A beneficial interest in a statutory trust, business trust, or common-law business trust;

or

     (x) A governance interest or distributional interest in any other type of unincorporated

entity.

     (17)(18) “Interest exchange” means a transaction authorized by §§ 7-12.1-1131 through 7-

12.1-1136.

     (18)(19) “Interest holder” means:

     (i) A shareholder of a business corporation;

     (ii) A member of a nonprofit corporation;

     (iii) A general partner of a general partnership;

     (iv) A general partner of a limited partnership;

     (v) A limited partner of a limited partnership;

     (vi) A member of a limited liability company;

     (vii) A shareholder of a general cooperative association;

     (viii) A member of a limited cooperative association;

     (ix) A member of an unincorporated nonprofit association;

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     (x) A beneficiary or beneficial owner of a statutory trust, business trust, or common-law

business trust; or

     (xi) Any other direct holder of an interest.

     (19)(20) “Interest holder liability” means:

     (i) Personal liability for a liability of an entity which is imposed on a person:

     (A) Solely by reason of the status of the person as an interest holder; or

     (B) By the organic rules of the entity which make one or more specified interest holders or

categories of interest holders liable in their capacity as interest holders for all or specified liabilities

of the entity; or

     (ii) An obligation of an interest holder under the organic rules of an entity to contribute to

the entity.

     (20)(21) “Merger” means a transaction authorized by §§ 7-12.1-1121 through 7-12.1-1126.

     (21)(22) “Merging entity” means an entity that is a party to a merger and exists immediately

before the merger becomes effective.

     (22)(23) “Organic law” means the law of an entity’s jurisdiction of formation governing

the internal affairs of the entity.

     (23)(24) “Organic rules” means the public organic record and private organic rules of an

entity.

     (24)(25) “Plan” means a plan of merger, plan of interest exchange, plan of conversion, or

plan of domestication.

     (25)(26) “Plan of conversion” means a plan under § 7-12.1-1142.

     (26)(27) “Plan of domestication” means a plan under § 7-12.1-1152.

     (27)(28) “Plan of interest exchange” means a plan under § 7-12.1-1132.

     (28)(29) “Plan of merger” means a plan under § 7-12.1-1122.

     (29)(30) “Private organic rules” means the rules, whether or not in a record, that govern

the internal affairs of an entity, are binding on all its interest holders, and are not part of its public

organic record, if any. The term includes:

     (i) The bylaws of a business corporation;

     (ii) The bylaws of a nonprofit corporation;

     (iii) The partnership agreement of a general partnership;

     (iv) The partnership agreement of a limited partnership;

     (v) The operating agreement of a limited liability company;

     (vi) The bylaws of a general cooperative association;

     (vii) The bylaws of a limited cooperative association;

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     (viii) The governing principles of an unincorporated nonprofit association; and

     (ix) The trust instrument of a statutory trust or similar rules of a business trust or common-

law business trust.

     (30)(31) “Protected agreement” means:

     (i) A record evidencing indebtedness and any related agreement in effect on January 1,

2023;

     (ii) An agreement that is binding on an entity on January 1, 2023;

     (iii) The organic rules of an entity in effect on January 1, 2023; or

     (iv) An agreement that is binding on any of the governors or interest holders of an entity

on January 1, 2023.

     (31)(32) “Public organic record” means the record the filing of which by the secretary of

state is required to form an entity and any amendment to or restatement of that record. The term

includes:

     (i) The articles of incorporation of a business corporation;

     (ii) The articles of incorporation of a nonprofit corporation;

     (iii) The certificate of limited partnership of a limited partnership;

     (iv) The certificate of organization of a limited liability company;

     (v) The articles of incorporation of a general cooperative association;

     (vi) The articles of organization of a limited cooperative association; and

     (vii) The certificate of trust of a statutory trust or similar record of a business trust.

     (32)(33) “Registered foreign entity” means a foreign entity that is registered to do business

in this state pursuant to a record filed by the secretary of state.

     (33)(34) “Statement of conversion” means a statement under § 7-12.1-1145.

     (34)(35) “Statement of domestication” means a statement under § 7-12.1-1155.

     (35)(36) “Statement of interest exchange” means a statement under § 7-12.1-1135.

     (36) “Statement of merger” means a statement under § 7-12.1-1125.

     (37) “Surviving entity” means the entity that continues in existence after or is created by a

merger.

     (38) “Type of entity” means a generic form of entity:

     (i) Recognized at common law; or

     (ii) Formed under an organic law, whether or not some entities formed under that organic

law are subject to provisions of that law that create different categories of the form of entity.

     7-12.1-1125. Articles of merger — Effective date of merger. [Effective January 1,

2023.]

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     (a) Articles of merger must be signed by each merging entity and filed with the secretary

of state.

     (b) Articles of merger must contain:

     (1) The name, jurisdiction of formation, and type of entity of each merging entity that is

not the surviving entity;

     (2) The name, jurisdiction of formation, and type of entity of the surviving entity;

     (3) A statement that the merger was approved by each domestic merging entity, if any, in

accordance with this part and by each foreign merging entity, if any, in accordance with the law of

its jurisdiction of formation;

     (4) If the surviving entity exists before the merger and is a domestic filing entity, any

amendment to its public organic record approved as part of the plan of merger;

     (5) If the surviving entity is created by the merger and is a domestic filing entity, its public

organic record, as an attachment; and

     (6) If the surviving entity is created by the merger and is a domestic limited liability

partnership, its statement of qualification, as an attachment.

     (c) In addition to the requirements of subsection (b) of this section, a statement of merger

may contain any other provision not prohibited by law.

     (d) If the surviving entity is a domestic entity, its public organic record, if any, must satisfy

the requirements of the law of this state, except that the public organic record does not need to be

signed.

     (e) If the surviving or resulting entity is not a domestic limited liability partnership or

another filing entity of record in the office of the secretary of state, the articles of merger must

contain a statement that the surviving or resulting other entity agrees that it may be served with

process in Rhode Island in any action, suit, or proceeding for the enforcement of any obligation of

any domestic limited liability partnership that is to merge, irrevocably appointing the secretary of

state as its agent to accept service of process in the action, suit, or proceeding and specifying the

address to which a copy of the process is to be mailed to it by the secretary of state. In the event of

service under this section on the secretary of state, the procedures set forth in § 7-12.1-912 are

applicable, except that the plaintiff in any action, suit, or proceeding shall furnish the secretary of

state with the address specified in the articles of merger provided for in this section and any other

address that the plaintiff elects to furnish, together with copies of the process as required by the

secretary of state, and the secretary of state shall notify the surviving or resulting other business

entity at all addresses furnished by the plaintiff in accordance with the procedures set forth in § 7-

12.1-912.

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     (f) If the surviving entity is a domestic partnership, the merger becomes effective when the

articles of merger are effective. In all other cases, the merger becomes effective on the later of:

     (1) The date and time provided by the organic law of the surviving entity; and

     (2) When the articles of merger are effective.

     SECTION 3. Sections 7-13.1-121, 7-13.1-123, 7-13.1-206, 7-13.1-212, 7-13.1-213, 7-

13.1-812, 7-13.1-1011, 7-13.1-1012, 7-13.1-1101 and 7-13.1-1125 of the General Laws in Chapter

7-13.1 entitled "Uniform Limited Partnership Act [Effective January 1, 2023.]" are hereby amended

to read as follows:

     7-13.1-121. Service of process, notice, or demand. [Effective January 1, 2023.]

     (a) A limited partnership or registered foreign limited partnership may be served with any

process, notice, or demand required or permitted by law by serving its registered agent.

     (b) If a limited partnership or registered foreign limited partnership fails to appoint or

maintain a registered agent in this state, or whenever its registered agent cannot with reasonable

diligence be found at the registered office, then the secretary of state is an agent of the corporation

limited partnership or registered foreign limited partnership upon whom any process, notice,

or demand may be served. Service on the secretary of state of any process, notice, or demand is

made by delivering to and leaving with the secretary of state or with any clerk having charge of the

corporation department of the office, duplicate copies of the process, notice, or demand. In the

event any process, notice, or demand is served on the secretary of state, the secretary of state shall

immediately forward one of the copies by certified mail, addressed to the corporation limited

partnership or registered foreign limited partnership at its registered office. Any service upon

the secretary of state is returnable in not less than thirty (30) days.

     (c) The secretary of state shall maintain a record of any such service setting forth the name

of the plaintiff and defendant, the title, docket number and nature of the proceeding in which

process has been served upon the secretary of state, the fact that service has been effected pursuant

to this section, the return date thereof, and the day and hour when the service was made. The

secretary of state shall not be required to retain such information for a period longer than five (5)

years from receipt of the service of process.

     (d) Service of process, notice, or demand on a registered agent must be in a written record.

     (e) Service of process, notice, or demand may be made by other means under law other

than this chapter.

     7-13.1-123. Fees for filing documents and issuing certificates. [Effective January 1,

2023.]

     The secretary of state shall charge and collect for:

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     (1) Filing a certificate of limited partnership, one hundred dollars ($100);

     (2) Filing a certificate of amendment to a certificate of limited partnership, fifty dollars

($50.00);

     (3) Filing a certificate of correction to a certificate of limited partnership, fifty dollars

($50.00);

     (3)(4) Filing a certificate of dissolution of a certificate of limited partnership, ten dollars

($10.00);

     (4)(5) Filing an application to reserve a limited partnership name, fifty dollars ($50.00);

     (5)(6) Filing a notice of transfer of a reserved limited partnership name, fifty dollars

($50.00);

     (6)(7) Filing a statement of change of address of specified office or change of specified

agent, twenty dollars ($20.00);

     (7)(8) Filing a statement of change of address only for a specified agent, without fee;

     (8)(9) Filing an application of a foreign limited partnership to register as a foreign limited

partnership, one hundred dollars ($100);

     (9)(10) Filing a certificate of withdrawal of registration as a foreign limited partnership,

twenty-five dollars ($25.00);

     (10)(11) Filing any other document, statement, or report of a domestic or foreign limited

partnership, except an annual report, ten dollars ($10.00);

     (11)(12) Filing a certificate of amendment of a foreign limited partnership, fifty dollars

($50.00);

     (12)(13) An annual report of a domestic or foreign limited partnership, fifty dollars

($50.00);

     (13)(14) To withdraw the certificate of revocation of a limited partnership, whether

domestic or foreign, a penalty in the amount of fifty dollars ($50.00) for each year or part of the

year that has elapsed since the issuance of the certificate of revocation;

     (14)(15) For issuing a certificate of good standing/letter of status, twenty dollars ($20.00).

     (15)(16) For issuing a certificate of fact, thirty dollars ($30.00);

     (16)(17) For furnishing a certified copy of any document, instrument, or paper relating to

a domestic or foreign limited partnership, a fee of fifteen cents ($.15) per page and ten dollars

($10.00) for the certificate and affirming the seal to it; and

     (17)(18) Service of process on the secretary of state as registered agent of a limited

partnership, fifteen dollars ($15.00) which amount may be recovered as a taxable cost by the party

to the suit or action making the service if the party prevails in the suit or action.

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     7-13.1-206. Filing requirements. [Effective January 1, 2023.]

     (a) To be filed by the secretary of state pursuant to this chapter, a record must be received

by the secretary of state, must comply with this chapter, and satisfy the following:

     (1) The filing of the record must be required or permitted by this chapter.

     (2) The record must be physically delivered in written form unless and to the extent the

secretary of state permits electronic delivery of records.

     (3) The words in the record must be in English, and numbers must be in Arabic or Roman

numerals, but the name of an entity need not be in English if written in English letters or Arabic or

Roman numerals.

     (4) The record must be signed under pains and penalties of perjury by a person authorized

or required under this chapter to sign the record.

     (5) The record must state the name and capacity, if any, of each individual who signed it,

either on behalf of the individual or the person authorized or required to sign the record, but need

not contain a seal, attestation, acknowledgment, or verification.

     (b) If law other than this chapter prohibits the disclosure by the secretary of state of

information contained in a record delivered to the secretary of state for filing, the secretary of state

shall file the record if the record otherwise complies with this chapter but may redact the

information.

     (c) When a record is delivered to the secretary of state for filing, any fee required under

this chapter and any fee, tax, interest, or penalty required to be paid under this chapter or law other

than this chapter must be paid in a manner permitted by the secretary of state or by that law.

     (d) The secretary of state may require that a record delivered in written form be

accompanied by an identical or conformed copy.

     (e) The secretary of state may provide forms for filings required or permitted to be made

by this chapter, but, except as otherwise provided in subsection (f) of this section and § 7-13.1-22

7-13.1-212, their use is not required.

     (f) The secretary of state may require that a cover sheet for a filing be on a form prescribed

by the secretary of state.

     7-13.1-212. Annual report for secretary of state. [Effective January 1, 2023.]

     (a) A limited partnership or registered foreign limited partnership shall deliver to the

secretary of state for filing an annual report that states:

     (1) The name of the partnership or foreign partnership;

     (2) The addresses of its principal office;

     (3) The name and address of each general partner;

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     (4) In the case of a foreign partnership, its jurisdiction of formation and any alternate name

adopted under § 7-13.1-1006(a);

     (5) A brief statement of the character of the business in which the limited partnership is

actually engaged in this state; and

     (6) Any additional information that is required by the secretary of state.

     (b) The annual report must be made on forms prescribed and furnished by the secretary of

state, and the information in the annual report must be current as of the date the report is signed by

the limited partnership or registered foreign limited partnership.

     (c) The first annual report must be delivered to the secretary of state for filing after February

1 and before May 1 of the year following the calendar year in which the limited partnership’s

certificate of limited partnership became effective or the registered foreign limited partnership

registered to do business in this state. Subsequent annual reports must be delivered to the secretary

of state for filing after February 1 and before May 1 of each calendar year thereafter. Proof to the

satisfaction of the secretary of state that prior to May 1 the report was deposited in the United States

mail in a sealed envelope, properly addressed, with postage prepaid, is deemed to be a compliance

with this requirement.

     (d) If the secretary of state finds that the annual report conforms to the requirements of this

chapter, the secretary of state shall file the report. If an annual report does not contain the

information required by this section, the secretary of state promptly shall notify the reporting

limited partnership or registered foreign limited partnership in a record and return the report for

correction, in which event the penalties subsequently prescribed for failure to file the report within

the time previously provided do not apply if the report is corrected to conform to the requirements

of this chapter and returned to the secretary of state within thirty (30) days from the date on which

it was mailed to the corporation limited partnership by the secretary of state.

     (e) Each limited partnership, domestic or foreign, that fails or refuses to file its annual

report for any year within thirty (30) days after the time prescribed by this chapter is subject to a

penalty of twenty-five dollars ($25.00) per year.

     7-13.1-213. Filing of returns with the tax administrator — Annual charge. [Effective

January 1, 2023.]

     (a) A limited partnership certified under this chapter shall file a return, in the form and

containing the information as prescribed by the tax administrator, as follows:

     (1) If the fiscal year of the limited partnership is the calendar year, on or before the fifteenth

day of April in the year following the close of the fiscal year; and

     (2) If the fiscal year of the limited partnership is not a calendar year, on or before the

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fifteenth day of the fourth month following the close of the fiscal year.

     (b) For tax years beginning after December 31, 2022 December 31, 2015, a limited

partnership certified under this chapter shall file a return, in the form and containing the information

as prescribed by the tax administrator, and shall be filed on or before the date a federal tax return

is due to be filed, without regard to extension.

     (c) An annual charge, equal to the minimum tax imposed upon a corporation under § 44-

11-2(e), shall be due on the filing of the limited partnership’s return filed with the tax administrator

and shall be paid to the division of taxation.

     (d) The annual charge is delinquent if not paid by the due date for the filing of the return

and an addition of one hundred dollars ($100) to the charge is then due.

     7-13.1-812. Issuance of certificates of revocation. [Effective January 1, 2023.]

     (a) Upon revoking any such certificate of limited partnership, the secretary of state shall:

     (1) Issue a certificate of revocation in duplicate;

     (2) File one of the certificates in the secretary of state’s office;

     (3) Send to the limited partnership by regular mail a certificate of revocation, addressed to

the registered agent of the limited partnership in this state on file with the secretary of state’s office;

provided, however, that if a prior mailing addressed to the address of the registered agent of the

limited partnership in this state currently on file with the secretary of state’s office has been returned

to the secretary of state as undeliverable by the United States Postal Service for any reason, or if

the revocation certificate is returned as undeliverable to the secretary of state’s office by the United

States Postal Service for any reason, the secretary of state shall give notice as follows:

     (i) To the limited partnership at its principal office of record as shown in its most recent

annual report, and no further notice shall be required; or

     (ii) In the case of a limited partnership that has not yet filed an annual report, then to the

domestic limited liability company limited partnership at the principal office in the articles of

organization or to the authorized person listed on the articles of organization certificate of

registration, and no further notice shall be required.

     (b) A limited partnership that is revoked continues in existence as an entity but may not

carry on any activities except as necessary to wind up its activities and affairs and liquidate its

assets under §§ 7-13.1-802, 7-13.1-806, 7-13.1-807, 7-13.1-808, and 7-13.1-810, or to apply for

reinstatement under § 7-13.1-813.

     (c) The revocation of a limited partnership does not terminate the authority of its registered

agent.

     7-13.1-1011. Issuance of certificates of revocation. [Effective January 1, 2023.]

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     (a) Upon revoking any such certificate of registration of limited partnership, the secretary

of state shall:

     (1) Issue a certificate of revocation in duplicate;

     (2) File one of the certificates in the secretary of state’s office;

     (3) Send to the limited partnership by regular mail a certificate of revocation, addressed to

the registered agent of the limited partnership in this state on file with the secretary of state’s office;

provided, however, that if a prior mailing addressed to the address of the registered agent of the

limited partnership in this state currently on file with the secretary of state’s office has been returned

to the secretary of state as undeliverable by the United States Postal Service for any reason, or if

the revocation certificate is returned as undeliverable to the secretary of state’s office by the United

States Postal Service for any reason, the secretary of state shall give notice as follows:

     (i) To the limited partnership at its principal office of record as shown in its most recent

annual report, and no further notice shall be required; or

     (ii) In the case of a limited partnership that has not yet filed an annual report, then to the

principal office listed in the certificate of registration, and no further notice shall be required.

     (b) The authority of the registered foreign limited partnership to do business in this state

ceases on the effective date of the certificate of revocation, or to apply for reinstatement under

§ 7-13.1-1012 unless before that date the partnership cures each ground for revocation stated

in the notice.

     (c) The revocation of a limited partnership does not terminate the authority of its registered

agent.

     7-13.1-1012. Reinstatement. [Effective January 1, 2023.]

     (a) Within ten (10) years after issuing a certificate of revocation as provided in § 7-13.1-

1011, the secretary of state may withdraw the certificate of revocation and retroactively reinstate

the limited partnership in good standing as if its certificate of registration of limited partnership had

not been revoked except as subsequently provided:

     (1) On the filing by the limited partnership of the documents it had previously failed to file

as set forth in § 7-13.1-1010(a)(3) through (6)(a)(8) and payment of any fees or taxes it had

previously failed to pay;

     (2) On the payment by the limited partnership of a penalty in the amount of fifty dollars

($50.00) for each year or part of year that has elapsed since the issuance of the certificate of

revocation; and

     (3) Upon the filing by the limited partnership of a certificate of good standing from the

Rhode Island division of taxation.

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     (b) If, as permitted by the provisions of this chapter or chapter 1.2, 6, or 12.1 of this title,

another limited liability company, business or nonprofit corporation, registered limited liability

partnership or a limited partnership, or in each case domestic or foreign, authorized and qualified

to transact business in this state, bears or has filed a fictitious business name statement as to or

reserved or registered a name that is the same as, the name of the limited partnership with respect

to which the certificate of revocation is proposed to be withdrawn, then the secretary of state shall

condition the withdrawal of the certificate of revocation on the reinstated limited partnership

amending its certificate of registration so as to designate a name that meets the requirements of §

7-13.1-114 by adopting an alternate name pursuant to § 7-13.1-1006(a).

     (c) When reinstatement under this section has become effective, the following rules apply:

     (1) The reinstatement relates back to and takes effect as of the effective date of the

certificate of revocation.

     (2) The limited partnership resumes carrying on its activities and affairs as if the revocation

had not occurred.

     (3) The rights of a person arising out of an act or omission in reliance on the revocation

before the person knew or had notice of the reinstatement are not affected.

     7-13.1-1101. Definitions. [Effective January 1, 2023.]

     As used in this part:

     (1) “Acquired entity” means the entity, all of one or more classes or series of interests of

which are acquired in an interest exchange.

     (2) “Acquiring entity” means the entity that acquires all of one or more classes or series of

interests of the acquired entity in an interest exchange.

     (3) "Articles of merger" means a statement under § 7-13.1-1125.

     (3)(4) “Conversion” means a transaction authorized by subpart 4.

     (4)(5) “Converted entity” means the converting entity as it continues in existence after a

conversion.

     (5)(6) “Converting entity” means the domestic entity that approves a plan of conversion

pursuant to § 7-13.1-1143 or the foreign entity that approves a conversion pursuant to the law of

its jurisdiction of formation.

     (6)(7) “Distributional interest” means the right under an unincorporated entity’s organic

law and organic rules to receive distributions from the entity.

     (7)(8) “Domestic”, with respect to an entity, means governed as to its internal affairs by

the law of this state.

     (8)(9) “Domesticated limited partnership” means the domesticating limited partnership as

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it continues in existence after a domestication.

     (9)(10) “Domesticating limited partnership” means the domestic limited partnership that

approves a plan of domestication pursuant to § 7-13.1-1153 or the foreign limited partnership that

approves a domestication pursuant to the law of its jurisdiction of formation.

     (10)(11) “Domestication” means a transaction authorized by subpart 5.

     (11)(12) “Entity”:

     (i) Means:

     (A) A business corporation;

     (B) A nonprofit corporation;

     (C) A general partnership, including a limited liability partnership;

     (D) A limited partnership, including a limited liability limited partnership;

     (E) A limited liability company;

     (F) A general cooperative association;

     (G) A limited cooperative association;

     (H) An unincorporated nonprofit association;

     (I) A statutory trust, business trust, or common-law business trust; or

     (J) Any other person that has:

     (I) A legal existence separate from any interest holder of that person; or

     (II) The power to acquire an interest in real property in its own name; and

     (ii) Does not include:

     (A) An individual;

     (B) A trust with a predominantly donative purpose or a charitable trust;

     (C) An association or relationship that is not an entity listed in subsection (11)(i) of this

section and is not a partnership under the rules stated in § 7-12-18 [repealed] 7-12.1-202 or a

similar provision of the law of another jurisdiction;

     (D) A decedent’s estate; or

     (E) A government or a governmental subdivision, agency, or instrumentality.

     (12)(13) “Filing entity” means an entity whose formation requires the filing of a public

organic record. The term does not include a limited liability partnership.

     (13)(14) “Foreign”, with respect to an entity, means an entity governed as to its internal

affairs by the law of a jurisdiction other than this state.

     (14)(15) “Governance interest” means a right under the organic law or organic rules of an

unincorporated entity, other than as a governor, agent, assignee, or proxy, to:

     (i) Receive or demand access to information concerning, or the books and records of, the

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entity;

     (ii) Vote for or consent to the election of the governors of the entity; or

     (iii) Receive notice of or vote on or consent to an issue involving the internal affairs of the

entity.

     (15)(16) “Governor” means:

     (i) A director of a business corporation or an officer of a business corporation that has no

board of directors;

     (ii) A director or trustee of a nonprofit corporation;

     (iii) A general partner of a general partnership;

     (iv) A general partner of a limited partnership;

     (v) A manager of a manager-managed limited liability company;

     (vi) A member of a member-managed limited liability company;

     (vii) A director of a general cooperative association;

     (viii) A director of a limited cooperative association;

     (ix) A manager of an unincorporated nonprofit association;

     (x) A trustee of a statutory trust, business trust, or common-law business trust; or

     (xi) Any other person under whose authority the powers of an entity are exercised and

under whose direction the activities and affairs of the entity are managed pursuant to the organic

law and organic rules of the entity.

     (16)(17) “Interest” means:

     (i) A share in a business corporation;

     (ii) A membership in a nonprofit corporation;

     (iii) A partnership interest in a general partnership;

     (iv) A partnership interest in a limited partnership;

     (v) A membership interest in a limited liability company;

     (vi) A share in a general cooperative association;

     (vii) A member’s interest in a limited cooperative association;

     (viii) A membership in an unincorporated nonprofit association;

     (ix) A beneficial interest in a statutory trust, business trust, or common-law business trust;

or

     (x) A governance interest or distributional interest in any other type of unincorporated

entity.

     (17)(18) “Interest exchange” means a transaction authorized by subpart 3.

     (18)(19) “Interest holder” means:

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     (i) A shareholder of a business corporation;

     (ii) A member of a nonprofit corporation;

     (iii) A general partner of a general partnership;

     (iv) A general partner of a limited partnership;

     (v) A limited partner of a limited partnership;

     (vi) A member of a limited liability company;

     (vii) A shareholder of a general cooperative association;

     (viii) A member of a limited cooperative association;

     (ix) A member of an unincorporated nonprofit association;

     (x) A beneficiary or beneficial owner of a statutory trust, business trust, or common-law

business trust; or

     (xi) Any other direct holder of an interest.

     (19)(20) “Interest holder liability” means:

     (i) Personal liability for a liability of an entity which is imposed on a person:

     (A) Solely by reason of the status of the person as an interest holder; or

     (B) By the organic rules of the entity which make one or more specified interest holders or

categories of interest holders liable in their capacity as interest holders for all or specified liabilities

of the entity; or

     (ii) An obligation of an interest holder under the organic rules of an entity to contribute to

the entity.

     (20)(21) “Merger” means a transaction authorized by subpart 2.

     (21)(22) “Merging entity” means an entity that is a party to a merger and exists immediately

before the merger becomes effective.

     (22)(23) “Organic law” means the law of an entity’s jurisdiction of formation governing

the internal affairs of the entity.

     (23)(24) “Organic rules” means the public organic record and private organic rules of an

entity.

     (24)(25) “Plan” means a plan of merger, plan of interest exchange, plan of conversion, or

plan of domestication.

     (25)(26) “Plan of conversion” means a plan under § 7-13.1-1142.

     (26)(27) “Plan of domestication” means a plan under § 7-13.1-1152.

     (27)(28) “Plan of interest exchange” means a plan under § 7-13.1-1132.

     (28)(29) “Plan of merger” means a plan under § 7-13.1-1122.

     (29)(30) “Private organic rules” means the rules, whether or not in a record, that govern

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the internal affairs of an entity, are binding on all its interest holders, and are not part of its public

organic record, if any. The term includes:

     (i) The bylaws of a business corporation;

     (ii) The bylaws of a nonprofit corporation;

     (iii) The partnership agreement of a general partnership;

     (iv) The partnership agreement of a limited partnership;

     (v) The operating agreement of a limited liability company;

     (vi) The bylaws of a general cooperative association;

     (vii) The bylaws of a limited cooperative association;

     (viii) The governing principles of an unincorporated nonprofit association; and

     (ix) The trust instrument of a statutory trust or similar rules of a business trust or a common-

law business trust.

     (30)(31) “Protected agreement” means:

     (i) A record evidencing indebtedness and any related agreement in effect on January 1,

2023;

     (ii) An agreement that is binding on an entity on January 1, 2023;

     (iii) The organic rules of an entity in effect on January 1, 2023; or

     (iv) An agreement that is binding on any of the governors or interest holders of an entity

on January 1, 2023.

     (31)(32) “Public organic record” means the record the filing of which by the secretary of

state is required to form an entity and any amendment to or restatement of that record. The term

includes:

     (i) The articles of incorporation of a business corporation;

     (ii) The articles of incorporation of a nonprofit corporation;

     (iii) The certificate of limited partnership of a limited partnership;

     (iv) The certificate of organization of a limited liability company;

     (v) The articles of incorporation of a general cooperative association;

     (vi) The articles of organization of a limited cooperative association; and

     (vii) The certificate of trust of a statutory trust or similar record of a business trust.

     (32)(33) “Registered foreign entity” means a foreign entity that is registered to do business

in this state pursuant to a record filed by the secretary of state.

     (33)(34) “Statement of conversion” means a statement under § 7-13.1-1145.

     (34)(35) “Statement of domestication” means a statement under § 7-13.1-1155.

     (35)(36) “Statement of interest exchange” means a statement under § 7-13.1-1135.

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     (36) “Statement of merger” means a statement under § 7-13.1-1125.

     (37) “Surviving entity” means the entity that continues in existence after or is created by a

merger.

     (38) “Type of entity” means a generic form of entity:

     (i) Recognized at common law; or

     (ii) Formed under an organic law, whether or not some entities formed under that organic

law are subject to provisions of that law that create different categories of the form of entity.

     7-13.1-1125. Articles of merger — Effective date of merger. [Effective January 1,

2023.]

     (a) Articles of merger must be signed by each merging entity and delivered to the secretary

of state for filing.

     (b) Articles of merger must contain:

     (1) The name, jurisdiction of formation, and type of entity of each merging entity that is

not the surviving entity;

     (2) The name, jurisdiction of formation, and type of entity of the surviving entity;

     (3) A statement that the merger was approved by each domestic merging entity, if any, in

accordance with this subpart and by each foreign merging entity, if any, in accordance with the law

of its jurisdiction of formation;

     (4) If the surviving entity exists before the merger and is a domestic filing entity, any

amendment to its public organic record approved as part of the plan of merger;

     (5) If the surviving entity is created by the merger and is a domestic filing entity, its public

organic record, as an attachment; and

     (6) If the surviving entity is created by the merger and is a domestic limited liability

partnership, its statement of qualification, as an attachment.

     (c) In addition to the requirements of subsection (b) of this section, a statement of merger

may contain any other provision not prohibited by law.

     (d) If the surviving entity is a domestic entity, its public organic record, if any, must satisfy

the requirements of the law of this state, except that the public organic record does not need to be

signed.

     (e) If the surviving or resulting entity is not a domestic limited partnership or another filing

entity of record in the office of the secretary of state, the articles of merger must contain a

statement that the surviving or resulting other entity agrees that it may be served with process in

Rhode Island in any action, suit or proceeding for the enforcement of any obligation of any

domestic limited partnership that is to merge, irrevocably appointing the secretary of state as its

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agent to accept service of process in the action, suit or proceeding and specifying the address to

which a copy of the process is to be mailed to it by the secretary of state. In the event of service

under this section on the secretary of state, the procedures set forth in § 7-13.1-121 are applicable,

except that the plaintiff in any action, suit or proceeding shall furnish the secretary of state with the

address specified in the articles of merger provided for in this section and any other address that

the plaintiff elects to furnish, together with copies of the process as required by the secretary of

state, and the secretary of state shall notify the surviving or resulting other business entity at all

addresses furnished by the plaintiff in accordance with the procedures set forth in § 7-13.1-121.

     (f) A The articles of merger must contain a statement that the merging entity certifies

that it has no outstanding tax obligations. As required by §§ 7-13.1-213, 7-16-67 and 44-11-26.1,

the merging entity has paid all fees and taxes.

     (g) If the surviving entity is a domestic limited partnership, the merger becomes effective

when the articles of merger are effective. In all other cases, the merger becomes effective on the

later of:

     (1) The date and time provided by the organic law of the surviving entity; and

     (2) When the articles of merger is effective.

     SECTION 4. Section 27-19-55 of the General Laws in Chapter 27-19 entitled "Nonprofit

Hospital Service Corporations" is hereby amended to read as follows:

     27-19-55. Coverage for early intervention services.

     (a) Every individual or group hospital or medical expense insurance policy or contract

providing coverage for dependent children, delivered or renewed in this state on or after July 1,

2004, shall include coverage of early intervention services which coverage shall take effect no later

than January 1, 2005. Such coverage shall be limited to a benefit of five thousand dollars ($5,000)

per dependent child per policy or calendar year and shall not be subject to deductibles and

coinsurance factors. Any amount paid by an insurer under this section for a dependent child shall

not be applied to any annual or lifetime maximum benefit contained in the policy or contract. For

the purpose of this section, “early intervention services” means, but is not limited to, speech and

language therapy, occupational therapy, physical therapy, evaluation, case management, nutrition,

service plan development and review, nursing services, and assistive technology services and

devices for dependents from birth to age three (3) who are certified by the department of human

services as eligible for services under part C of the Individuals with Disabilities Education Act (20

U.S.C. § 1471 et seq.) (20 U.S.C. § 1431 et seq.).

     (b) Subject to the annual limits provided in this section, insurers shall reimburse certified

early intervention providers, who are designated as such by the Department of Human Services, for

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early intervention services as defined in this section at rates of reimbursement equal to or greater

than the prevailing integrated state/Medicaid rate for early intervention services as established by

the Department of Human Services.

     (c) This section shall not apply to insurance coverage providing benefits for: (1) hospital

confinement indemnity; (2) disability income; (3) accident only; (4) long-term care; (5) Medicare

supplement; (6) limited benefit health; (7) specified disease indemnity; (8) sickness or bodily injury

or death by accident or both; and (9) other limited benefit policies.

     SECTION 5. Section 27-20-50 of the General Laws in Chapter 27-20 entitled "Nonprofit

Medical Service Corporations" is hereby amended to read as follows:

     27-20-50. Coverage for early intervention services.

     (a) Every individual or group hospital or medical expense insurance policy or contract

providing coverage for dependent children, delivered or renewed in this state on or after July 1,

2004, shall include coverage of early intervention services which coverage shall take effect no later

than January 1, 2005. Such coverage shall be limited to a benefit of five thousand dollars ($5,000)

per dependent child per policy or calendar year and shall not be subject to deductibles and

coinsurance factors. Any amount paid by an insurer under this section for a dependent child shall

not be applied to any annual or lifetime maximum benefit contained in the policy or contract. For

the purpose of this section, “early intervention services” means, but is not limited to, speech and

language therapy, occupational therapy, physical therapy, evaluation, case management, nutrition,

service plan development and review, nursing services, and assistive technology services and

devices for dependents from birth to age three (3) who are certified by the department of human

services as eligible for services under part C of the Individuals with Disabilities Education Act (20

U.S.C. § 1471 et seq.) (20 U.S.C. § 1431 et seq.).

     (b) Subject to the annual limits provided in this section, insurers shall reimburse certified

early intervention providers, who are designated as such by the Department of Human Services, for

early intervention services as defined in this section at rates of reimbursement equal to or greater

than the prevailing integrated state/Medicaid rate for early intervention services as established by

the Department of Human Services.

     (c) This section shall not apply to insurance coverage providing benefits for: (1) hospital

confinement indemnity; (2) disability income; (3) accident only; (4) long-term care; (5) Medicare

supplement; (6) limited benefit health; (7) specified disease indemnity; (8) sickness or bodily injury

or death by accident or both; and (9) other limited benefit policies.

     SECTION 6. Section 27-20.10-3 of the General Laws in Chapter 27-20.10 entitled "Rental

Network Contract Arrangements" is hereby amended to read as follows:

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     27-20.10-3. Registration.

     (a) Any person that commences business as a contracting entity shall register with the

department within thirty (30) days of commencing business in the state of Rhode Island unless such

person is licensed by the department as an insurer. Upon passage of this chapter, each person not

licensed by the department as a contracting entity shall register with the department within ninety

(90) days of the effective date of this chapter.

     (1) Registration shall consist of the submission of the following information:

     (i) The official name of the contracting entity, including and any d/b/a designations used

in this state;

     (ii) The mailing address and main telephone number for the contracting entity’s main

headquarters; and

     (iii) The name and telephone number of the contracting entity’s representative who shall

serve as the primary contact with the department.

     (2) The information required by this section shall be submitted in written or electronic

format, as prescribed by the department.

     (b) The department may collect a reasonable fee for the purpose of administering the

registration process.

     SECTION 7. Section 27-29-13 of the General Laws in Chapter 27-29 entitled "Unfair

Competition and Practices" is hereby amended to read as follows:

     27-29-13. Payment of premium — Cancellation.

     Notwithstanding the provisions of chapter 40 of this title 14.6 of title 19, private passenger

motor vehicle insurance policyholders on either six (6) month or twelve (12) month policies shall

have the option of paying any policy premiums in installment payments; provided that for a twelve

(12) month policy the insurer may require a payment of fifteen percent (15%) of the annual

premium at time of issuance with the balance to be paid thereafter in nine (9) subsequent and equal

monthly installments thereafter for a six (6) month policy, the insurer may require a payment of

thirty-five percent (35%) of the premium at time of issuance with the balance to be paid in three

(3) subsequent and equal monthly installments thereafter. The insurer may levy a service charge of

up to five dollars ($5.00) per installment period against those policyholders who choose the

installment option. An insurer may levy and collect a maximum fee or charge of ten dollars ($10.00)

for any late payment of premium by a policyholder. A late fee may not be imposed unless payment

is received more than five (5) business days following the date payment is due. Policyholders shall

be entitled to receive no less than thirty (30) days notice before a cancellation of an automobile

insurance policy for any reason except nonpayment of premium, in which instance policyholders

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shall be entitled to receive no less than ten (10) days notice.

     SECTION 8. Sections 27-29.1-1 and 27-29.1-6 of the General Laws in Chapter 27-29.1

entitled "Pharmacy Freedom of Choice — Fair Competition and Practices" are hereby amended to

read as follows:

     27-29.1-1. Definitions.

     For purposes of this chapter, the following terms shall mean:

     (1) “Director” shall mean the director of the department of business regulation.

     (2) “Eligible bidder” shall mean a retail pharmacy, community pharmacy or pharmacy

department registered pursuant to chapter 19 of title 5 19.1 of title 5, irrespective of corporate

structure or number of locations at which it conducts business, located within the geographical

service area of a carrier and willing to bid for participation in a restricted pharmacy network

contract.

     (3) “Insurer” shall mean an insurance carrier as defined in chapters 18, 19, 20 and 41 of

title 27.

     (4) “Insured” shall mean any person who is entitled to have pharmacy services paid by an

insurer pursuant to a policy, certificate, contract or agreement of insurance or coverage.

     (5) “Non-restricted pharmacy network” shall mean a network that permits any pharmacy

to participate on substantially uniform terms and conditions established by an insurer or pharmacy

benefits manager.

     (6) “Pharmacy benefits manager” shall mean any person or entity that is not licensed in

Rhode Island as an insurer and that develops or manages pharmacy benefits, pharmacy network

contracts, or the pharmacy benefit bid process.

     (7) “Restricted pharmacy network” shall mean an arrangement for the provision of

pharmaceutical drug services to insureds which under the terms of an insurer’s policy, certificate,

contract or agreement of insurance or coverage requires an insured or creates a financial incentive

for an insured to obtain prescription drug services from one or more participating pharmacies that

have entered into a specific contractual relationship with the carrier.

     27-29.1-6. Applicability and allowances.

     (a) Nothing in this section chapter shall preclude an insurer from entering into an

agreement to allow non-network providers, other than independent community pharmacies, the

ability to participate with the insurer’s plans under terms and conditions set forth by the insurer.

     (b) The provisions of this chapter shall not apply to arrangements for the provision of

pharmaceutical drug benefits to insureds between an insurer or a pharmacy benefits manager, and

a mail order pharmacy, or a hospital-based pharmacy which is not a retail pharmacy.

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     (c) Nothing in this section chapter shall be construed to require the provision of pharmacy

benefits to insureds through a restricted pharmacy network nor any other arrangement for the

provision of prescription drug benefits.

     SECTION 9. Sections 27-30-5 and 27-30-6 of the General Laws in Chapter 27-30 entitled

"Consumer Credit Insurance" are hereby amended to read as follows:

     27-30-5. Term of consumer credit insurance.

     (a) Effective date of coverage.

     (1) For consumer credit insurance made available to and elected by the debtor before or

contemporaneous with a credit transaction to which the insurance relates, the term of insurance

shall, subject to acceptance by the insurer, commence on the date when the debtor becomes

obligated to the creditor, except that, when evidence of individual insurability is required and such

evidence is furnished more than thirty (30) days after the date when the debtor becomes obligated

to the creditor, the term of the credit insurance may commence on the date on which the insurance

company determines the evidence to be satisfactory.

     (2) For insurance coverage made available to and elected by the debtor on a date subsequent

to the date of the consumer credit transaction to which the insurance relates, the insurance shall,

subject to acceptance by the insurer, commence on a date not earlier that than the date the election

is made by the debtor nor later than thirty (30) days following the date on which the insurance

company accepts the risk for coverage, according to an objective method such as one related to a

particular date within the billing or repayment cycle or a calendar month.

     (3) Notwithstanding the provisions of subdivisions (1) and (2) of this subsection, when a

group policy provides coverage with respect to debts existing on the policy effective date, the

insurance relating to the debt shall not commence before the effective date of the group policy.

     (4) In no event shall a charge for insurance be made to the debtor and retained by the

creditor or insurer for any time prior to commencement of the consumer credit insurance to which

the charge is related.

     (b) Termination date of coverage.

     (1) The term of any consumer credit insurance shall not extend beyond the termination date

specified in the policy. The termination date of insurance may precede, coincide with or follow the

scheduled maturity date of the debt to which it relates, subject to any other requirements and

restrictions of this chapter.

     (2) The term of any consumer credit insurance shall not extend more than fifteen (15) days

beyond the scheduled maturity date of the debt except when extended without additional cost to

the debtor or except when extended pursuant to a written agreement, signed by the debtor, in

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connection with a variable interest rate credit transaction or a deferral, renewal, refinancing or

consolidation of debt.

     (3) If the debt is discharged due to renewal, financing or consolidation prior to the

scheduled termination date of insurance, any insurance in force shall be terminated before any new

insurance may be written in connection with the renewed, refinanced or consolidated debt.

     (4) In all cases of termination of insurance prior to the scheduled termination of the

insurance, an appropriate refund or credit to the debtor shall be made of any unearned insurance

charge paid by the debtor for a term of insurance after the date of the termination, except that no

refund is required of a charge made for insurance if the insurance is terminated by performance of

the insurer’s obligation with respect to insurance.

     (5) An insured debtor may terminate consumer credit insurance at any time by providing

advance request to the insurer. The individual policy or group certificate may require that the

request be in writing or that the debtor surrender the individual policy or group certificate, or both.

The debtor’s right to terminate coverage may also be subject to the terms of the credit transaction

contract.

     27-30-6. Disclosure to debtors and provisions of policies and certificates of insurance.

     (a) Pre-purchase disclosure. Before the debtor elects to purchase consumer credit insurance

in connection with a credit transaction, the following shall be disclosed to the debtor in writing:

     (1) That the purchase of consumer credit insurance is optional and not a condition of

obtaining credit approval;

     (2) If more than one kind of consumer credit insurance is being made available to the

debtor, whether the debtor can purchase each kind separately or the multiple coverages only as a

package;

     (3) The conditions of eligibility;

     (4) That, if the consumer has another insurance that covers the risk, he or she may not want

or need credit insurance;

     (5) That within the first thirty (30) days after receiving the individual policy or group

certificate, the debtor may cancel the coverage and have all premium paid by the debtor refunded

or credited. Thereafter, the debtor may cancel the policy at any time during the term of the loan and

receive a refund of any unearned premium. However, only in those instances where insurance is a

requirement for the extension of credit, the debtor may be required to offer evidence of alternative

insurance acceptable to the creditor at the time of cancellation;

     (6) A brief description of the coverage, including a description of the amount, the term,

any exception, limitations and exclusions, the insured event, any waiting or elimination period, any

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deductible, any applicable waiver of premium provision, to whom the benefits would be paid and

the premium rate for each coverage or for all coverages in a package;

     (7) That if the premium or insurance charge is financed, it will be subject to finance charges

at the rate applicable to the credit transaction.

     (b) The disclosures required in subsection (a) above shall be provided in the following

manner:

     (1) In connection with the consumer credit insurance offered contemporaneously with the

extension of credit or offered through direct mail advertisements, disclosure shall be made in

writing and presented to the consumer in a clear and conspicuous manner;

     (2) In conjunction with the offer of credit insurance subsequent to the extension of credit

by other than direct mail advertisements, disclosure may be provided orally so long as written

disclosures are provided to the debtor no later than the earlier of:

     (i) Ten (10) days after the offer; or

     (ii) The date any other written material is provided to the debtor.

     (c) All consumer credit insurance sold shall be evidenced by an individual policy, or a

group certificate of insurance which shall be delivered to the debtor.

     (d) The individual policy or group certificate shall, in addition to other requirements of

law, set forth the following:

     (1) The name and home office address of the insurer;

     (2) The name or names of the debtor or debtors, or, in the case of a group certificate, the

identity by name or otherwise of the debtor or debtors;

     (3) The premium or amount of payment by the debtor separately for each kind of coverage

or for all coverages in a package, except that for open-end loans, the premium rate and the basis of

premium calculation (e.g. average daily balance, prior monthly balance) shall be specified;

     (4) A full description of the coverage or coverages, including the amount and term thereof,

and any exceptions, limitations and exclusions;

     (5) A statement that the benefits shall be paid to the creditor to reduce or extinguish the

unpaid debt and, whenever the amount of insurance benefit exceeds the unpaid debt that any such

excess shall be payable to a beneficiary, other than the creditor, named by the debtor, or to the

debtor’s estate; and

     (6) If the scheduled term of insurance is less than the scheduled term of the credit

transaction, a statement to that effect on the face of the individual policy or group certificate in not

less than ten (10) point bold face type.

     (e) Unless the individual policy or group certificate of insurance is delivered to the debtor

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at the time the debt is incurred, or at such other time that the debtor elects to purchase coverage, a

copy of the application for the policy or a notice of proposed insurance, signed by the debtor and

setting forth the name and home office address of the insurer, the name or names of the debtor, the

premium rate or amount of payment by the debtor for the insurance and the amount, term and a

brief description of the coverage provided, shall be delivered to the debtor at the time the debt is

incurred or the election to purchase coverage is made. The copy of the application for or notice of

proposed insurance shall also refer exclusively to insurance coverage, and shall be separate and

apart from the loan, sale or other credit statement of account, instrument or agreement, unless the

information required by this subsection is prominently set forth therein. Upon acceptance of the

insurance by the insurer and within thirty (30) days of the date upon which the debt is incurred or

the election to purchase coverage is made, the insurer shall cause the individual policy or group

certificate of insurance to be delivered to the debtor. The application or notice of proposed

insurance shall state that upon acceptance by the insurer, the insurance shall become effective as

provided in § 27-30-5.

     (f) The application, notice of proposed insurance or certificate may be used to fulfill all of

the requirements of subsections (a) and (d) if it contains all the information required by those

subsections.

     (g) The debtor has thirty (30) days from the date that he or she receives either the individual

policy or the group certificate to review the coverage purchased. At any time within the thirty (30)

day period, the debtor may contact the creditor or insurer issuing the policy or certificate and

request that the coverage be cancelled. The individual policy or group certificate may require the

request to be in writing or that the policy or certificate be returned to the insurer or both. The debtor

shall, within thirty (30) days of the request, receive a full refund or credit of all premiums or

insurance charges paid by the debtor.

     (h) If the named insurer does not accept the risk, the debtor shall receive a policy or

certificate of insurance setting forth the name and home office address of the substituted insurer

and the amount of the premium to be charged, and, if the amount of premium is less than that set

forth in the notice of proposed insurance, an appropriate refund shall be made within thirty (30)

days. In If no insurer accepts the risk, then all premiums paid shall be refunded or credited within

thirty (30) days of application to the person entitled thereto.

     (i) For the purpose of subsection (e) of this section, an individual policy or group certificate

delivered in conjunction with an open-end consumer credit agreement or any consumer credit

insurance requested by the debtor after the date of the debt shall be deemed to be delivered at the

time the debt is incurred or election to purchase coverage is made if the delivery occurs within

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thirty (30) days of the date the insurance is effective.

     (j) An individual policy or group certificate delivered in conjunction with an open-end

credit agreement shall continue from its effective date through the term of the agreement unless the

individual policy or group certificate is terminated in accordance with its terms at an earlier date.

     SECTION 10. Section 27-34-5 of the General Laws in Chapter 27-34 entitled "Rhode

Island Property and Casualty Insurance Guaranty Association" is hereby amended to read as

follows:

     27-34-5. Definitions.

     As used in this chapter:

     (1) “Account” means any one of the three (3) accounts created by § 27-34-6;

     (2) “Affiliate” means a person, who directly or indirectly, through one or more

intermediaries, controls, is controlled by, or is under common control with another on December

31 of the year immediately preceding the date the insurer becomes an insolvent insurer;

     (3) “Association” means the Rhode Island insurance guaranty association created under § 

27-34-6.

     (4) “Association similar to the association” means any guaranty association, security fund

or other insolvency mechanism that affords protection similar to that of the association. The term

shall also include any property and casualty insolvency mechanism that obtains assessments or

other contributions from insurers on a pre-insolvency basis.

     (5) “Assumed claims transaction” means the following:

     (i) Policy obligations that have been assumed by the insolvent insurer, prior to the entry of

a final order of liquidation, through a merger between the insolvent insurer and another entity

obligated under the policies, and for which assumption consideration has been paid to the applicable

guaranty associations, if the merged entity is a non-member insurer;

     (ii) Policy obligations that have been assumed by the insolvent insurer, prior to the entry

of a final order of liquidation, pursuant to a plan, approved by the domestic commissioner of the

assuming insurer, which:

     (A) Transfers the direct policy obligations and future policy renewals from one insurer to

another insurer; and

     (B) For which assumption consideration has been paid to the applicable guaranty

associations, if the assumption is from a non-member insurer.

     (C) For purposes of this section the term non-member insurer also includes a self-insurer,

non-admitted insurer and risk retention group; or

     (iii) An assumption reinsurance transaction in which all of the following has occurred:

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     (A) The insolvent insurer assumed, prior to the entry of a final order of liquidation, the

claim or policy obligations of another insurer or entity obligated under the claims or policies;

     (B) The assumption of the claim or policy obligations has been approved, if such approval

is required, by the appropriate regulatory authorities; and

     (C) As a result of the assumption, the claim or policy obligations became the direct

obligations of the insolvent insurer through a novation of the claims or policies.

     (6) “Assumption consideration” shall mean the consideration received by a guaranty

association to extend coverage to the policies assumed by a member insurer from a non-member

insurer in any assumed claims transaction including liabilities that may have arisen prior to the date

of the transaction. The assumption consideration shall be in an amount equal to the amount that

would have been paid by the assuming insurer during the three (3) calendar years prior to the

effective date of the transaction to the applicable guaranty associations if the business had been

written directly by the assuming insurer.

     (i) In the event that the amount of the premiums for the three (3) year period cannot be

determined, the assumption consideration will be determined by multiplying one hundred thirty

percent (130%) against the sum of the unpaid losses, loss adjustment expenses, and incurred but

not reported losses, as of the effective date of the assumed claims transaction, and then multiplying

such sum times the applicable guaranty association assessment percentage for the calendar year of

the transaction.

     (ii) The funds paid to a guaranty association shall be allocated in the same manner as any

assessments made during the three (3) year period. The guaranty association receiving the

assumption consideration shall not be required to recalculate or adjust any assessments levied

during the prior three (3) calendar years as a result of receiving the assumption consideration.

Assumption consideration paid by an insurer may be recouped in the same manner as other

assessments made by a guaranty association.

     (7) “Claimant” means any person instituting a covered claim; provided that no person who

is an affiliate of the insolvent insurer may be a claimant;

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

her designee;

     (9) “Control” means the possession, direct or indirect, of the power to direct or cause the

direction of the management and policies of a person, whether through the ownership of voting

securities, by contract other than a commercial contract for goods or nonmanagement services, or

otherwise, unless the power is the result of an official position with, or corporate office held by, the

person. Control shall be presumed to exist if any person, directly or indirectly, owns, controls, holds

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with the power to vote, or holds proxies representing, ten percent (10%) or more of the voting

securities of any other person. This presumption may be rebutted by a showing that control does

not exist in fact;

     (10) “Covered claim” means:

     (i) An unpaid claim, including one for unearned premiums, submitted by a claimant, which

arises out of and is within the coverage and subject to the applicable limits of an insurance policy

to which this chapter applies if the insurer becomes an insolvent insurer after the effective date of

this chapter and the policy was either issued by the insurer or assumed by the insurer in an assumed

claims transaction, and:

     (A) The claimant or insured is a resident of this state at the time of the insured event;

provided, that for entities other than an individual, the residence of a claimant, insured or

policyholder is the state in which its principal place of business is located at the time of the insured

event; or

     (B) The claim is a first-party claim for damage to property with a permanent location in

this state.

     (ii) Except as provided elsewhere in this section, “covered claim” shall not include:

     (A) Any amount awarded as punitive or exemplary damages;

     (B) Any amount sought as a return of premium under any retrospective rating plan; or

     (C) Any amount due any reinsurer, insurer, insurance pool, or underwriting association,

health maintenance organization, hospital plan corporation, professional health service corporation

or self-insurer as subrogation recoveries, reinsurance recoveries, contribution, indemnification or

otherwise. No claim for any amount due any reinsurer, insurer, insurance pool, underwriting

association, health maintenance organization, hospital plan corporation, professional health service

corporation or self-insurer may be asserted against a person insured under a policy issued by an

insolvent insurer other than to the extent the claim exceeds the association obligation limitations

set forth in § 27-34-8;

     (D) Any claims excluded pursuant to § 27-34-11.5 due to the high net worth of an insured;

     (E) Any first party claims by an insured that is an affiliate of the insolvent insurer;

     (F) Any fee or other amount relating to goods or services sought by or on behalf of any

attorney or other provider of goods or services retained by the insolvent insurer or an insured prior

to the date it was determined to be insolvent;

     (G) Any fee or other amount sought by or on behalf of any attorney or other provider of

goods or services retained by any insured or claimant in connection with the assertion or

prosecution of any claim, covered or otherwise, against the association;

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     (H) Any claims for interest; or

     (I) Any claim filed with the association or a liquidator for protection afforded under the

insured’s policy for incurred-but-not-reported losses.

     (11) “Insolvent insurer” means an insurer licensed to transact insurance in this state either

at the time the policy was issued; when the obligation with respect to the covered claim was

assumed under an assumed claims transaction; or when the insured event occurred, and against

whom a final order of liquidation has been entered after the effective date of this chapter with a

finding of insolvency by a court of competent jurisdiction in the insurer’s state of domicile;

     (12) “Insured” means any named insured, any additional insured, any vendor, lessor or any

other party identified as an insured under the policy.

     (13) “Line of credit” means an irrevocable stand-by commitment whereby the association

or member insurer and a qualified financial institution or group of qualified financial institutions

enter into a formal and binding contract in which the qualified financial institution or group of

qualified financial institutions agree to lend a certain amount of money within a stated period of

time.

     (14)(a)(i) “Member insurer” means any person who:

     (i)(A) Writes any kind of insurance to which this chapter applies, under § 27-34-3,

including the exchange of reciprocal or interinsurance contracts;

     (ii)(B) Is licensed to transact insurance in this state; and

     (C) Is not otherwise excepted from membership by statute or regulation.

     (b)(ii) An insurer shall cease to be a member insurer effective on the day following the

termination or expiration of its license to transact the kinds of insurance to which this chapter

applies, however, the insurer shall remain liable as a member insurer for any and all obligations,

including obligations for assessments levied prior to the termination or expiration of the insurer’s

license and assessment levied after the termination or expiration, which relate to any insurer that

became an insolvent insurer prior to the termination or expiration of the insurer’s license.

     (iii) Is not otherwise excepted from membership by statute or regulation.

     (15) “Net direct written premiums” means direct gross premiums written in this state on

insurance policies to which this chapter applies, including policy and membership fees, less the

following amounts: (i) Return premiums, (ii) Premiums on policies not taken and (iii) Dividends

paid or credited to policyholders on that direct business. “Net direct written premiums” does not

include premiums on contracts between insurers or reinsurers;

     (16) “Novation” means that the assumed claim or policy obligations became the direct

obligations of the insolvent insurer through consent of the policyholder and that thereafter the

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ceding insurer or entity initially obligated under the claims or policies is released by the

policyholder from performing its claim or policy obligations. Consent may be express or implied

based upon the circumstances, notice provided and conduct of the parties.

     (17) “Ocean marine insurance” means any form of insurance, regardless of the name, label

or marketing designation of the insurance policy, which insures against maritime perils or risks and

other related perils or risks, which are usually insured against by traditional marine insurance, such

as hull and machinery, marine builders risk, and marine protection and indemnity. Perils and risk

insured against include without limitation loss, damage, expense or legal liability of the insured for

loss, damage or expense arising out of or incident to ownership, operation, chartering, maintenance,

use, repair or construction of any vessel, craft or instrumentality in use in ocean or inland waterways

for commercial purposes, including liability of the insured for personal injury, injury, illness or

death or for loss or damage to the property of the insured or another person.

     (18) “Person” means any individual, aggregation of individuals, corporation, partnership,

or other entity;

     (19) “Qualified financial institution” shall have the same meaning as the term in § 27-1.1-

3.

     (20) “Receiver” means liquidator, rehabilitator, conservator or ancillary receiver, as the

context requires.

     (21) “Self-insurer” means a person that covers its liability through a qualified individual or

group self-insurance program or any other formal program created for the specific purpose of

covering liabilities typically covered by insurance.

     (22) “Self-insured retention” means:

     (i) Any fund or other arrangement to pay claims other than by an insurance company; or

     (ii) Any arrangement under which an insurance company has no obligation to pay claims

on behalf of an insured if it is not reimbursed by the insured.

     SECTION 11. Sections 27-34.2-2, 27-34.2-6 and 27-34.2-21 of the General Laws in

Chapter 27-34.2 entitled "Long Term Care Insurance" are hereby amended to read as follows:

     27-34.2-2. Scope.

     Long term care insurance is deemed to be accident and health insurance and is classified

as such for the purposes of chapter 34.1 34.3 of this title, the Rhode Island Life and Health

Insurance Guaranty Association Act. The requirements of this chapter apply to policies delivered

or issued for delivery in this state, except as provided in § 27-34.2-5. This chapter is not intended

to supercede the obligations of entities subject to this chapter to comply with the substance of other

applicable insurance laws insofar as they do not conflict with this chapter. The benefits required

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for long term care insurance shall only be the benefits specified in this chapter and in regulations

promulgated under § 27-34.2-16.

     27-34.2-6. Disclosure and performance standards for long-term-care insurance.

     (a) The director may adopt regulations that establish:

     (1) Standards for full and fair disclosure setting forth the manner, content, and required

disclosures for the sale of long-term-care insurance policies, terms of renewability, initial and

subsequent conditions of eligibility, nonduplication of coverage provisions, coverage of

dependents, preexisting conditions, termination of insurance, continuation or conversion,

probationary periods, limitations, exceptions, reductions, elimination periods, requirements for

replacement, recurrent conditions, and definitions of terms; and

     (2) Reasonable rules and regulations that are necessary, proper, or advisable to the

administration of this chapter including the procedure for the filing or submission of policies

subject to this chapter. This provision may not abridge any other authority granted the director by

law.

     (b) No long-term-care insurance policy may:

     (1) Be cancelled, nonrenewed, or terminated on the grounds of the age or the deterioration

of the mental or physical health of the insured individual or certificate holder; or

     (2) Contain a provision establishing a new waiting period in the event existing coverage is

converted to or replaced by a new or other form within the same company, except with respect to

an increase in benefits voluntarily selected by the insured individual or group policyholder; or

     (3) Provide coverage for skilled nursing care only or provide more coverage for skilled

care in a facility than coverage for lower levels of care.

     (c) A long-term-care policy must provide:

     (1) Home healthcare benefits that are at least fifty percent (50%) of those provided for care

in a nursing facility. The evaluation of the amount of coverage shall be based on aggregate days of

care covered for home health care when compared to days of care covered for nursing home care;

and

     (2) Home healthcare benefits that meet the National Association of Insurance

Commissioners’ minimum standards for home healthcare benefits in long-term-care insurance

policies.

     (d)(1) No long-term-care insurance policy or certificate other than a policy or certificate

issued to a group as defined in § 27-34.2-4(4)(i) shall use a definition of “preexisting condition”

which is more restrictive than the following: “preexisting condition” means a condition for which

medical advice or treatment was recommended by, or received from a provider of healthcare

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services, within six (6) months preceding the effective date of coverage of an insured person;

     (2) No long-term-care insurance policy or certificate other than a policy or certificate issued

to a group as defined in § 27-34.2-4(4)(i) may exclude coverage for a loss or confinement that is

the result of a preexisting condition, unless the loss or confinement begins within six (6) months

following the effective date of coverage of an insured person;

     (3) The director may extend the limitation periods set forth in subsections (d)(1) and (d)(2)

of this section as to specific age group categories in specific policy forms upon findings that the

extension is in the best interest of the public;

     (4) The definition of “preexisting condition” does not prohibit an insurer from using an

application form designed to elicit the complete health history of an applicant, and, on the basis of

the answers on that application, from underwriting in accordance with that insurer’s established

underwriting standards. Unless otherwise provided in the policy or certificate, a preexisting

condition, regardless of whether it is disclosed on the application, need not be covered until the

waiting period described in subsection (d)(2) of this section expires. No long-term-care insurance

policy or certificate may exclude or use waivers or riders of any kind to exclude, limit or reduce

coverage or benefits for specifically named or described preexisting diseases or physical conditions

beyond the waiting period described in subsection (d)(2) of this section, unless the waiver or rider

has been specifically approved by the director as set forth in § 27-34.2-8. This shall not permit

exclusion or limitation of benefits on the basis of Alzheimer’s disease, other dementias, or organic

brain disorders.

     (e)(1) No long-term-care insurance policy may be delivered or issued for delivery in this

state if the policy:

     (i) Conditions eligibility for any benefits on a prior hospitalization or institutionalization

requirement;

     (ii) Conditions eligibility for benefits provided in an institutional care setting on the receipt

of a higher level of institutional care; or

     (iii) Conditions eligibility for any benefits other than waiver of premium, post-

confinement, post-acute care, or recuperative benefits on a prior institutionalization requirement.

     (2) A long-term-care insurance policy or rider shall not condition eligibility for non-

institutional benefits on the prior or continuing receipt of skilled care services.

     (3) No long-term-care insurance policy or rider that provides benefits only following

institutionalization shall condition such benefits upon admission to a facility for the same or related

conditions within a period of less than thirty (30) days after discharge from the institution.

     (f) The commissioner may adopt regulations establishing loss ratio standards for long-term-

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care insurance policies provided that a specific reference to long-term-care insurance policies is

contained in the regulation.

     (g)(1) Long-term-care insurance applicants shall have the right to return the policy,

certificate, or rider to the company or an agent/insurance producer of the company within thirty

(30) days of its receipt and to have the premium refunded if, after examination of the policy,

certificate, or rider, the applicant is not satisfied for any reason.

     (2) Long-term-care insurance policies, certificates, and riders shall have a notice

prominently printed on the first page or attached thereto including specific instructions to

accomplish a return. This requirement shall not apply to certificates issued pursuant to a policy

issued to a group defined in § 27-34.2-4. The following free look statement or language

substantially similar shall be included:

     “You have thirty (30) days from the day you receive this policy, certificate, or rider to

review it and return it to the company if you decide not to keep it. You do not have to tell the

company why you are returning it. If you decide not to keep it, simply return it to the company at

its administration office. Or you may return it to the agent/insurance producer that you bought it

from. You must return it within thirty (30) days of the day you first received it. The company will

refund the full amount of any premium paid within thirty (30) days after it receives the returned

policy, certificate, or rider. The premium refund will be sent directly to the person who paid it. The

returned policy, certificate, or rider will be void as if it had never been issued.”

     (h)(1) An outline of coverage shall be delivered to a prospective applicant for long-term-

care insurance at the time of initial solicitation through means that prominently direct the attention

of the recipient to the document and its purpose;

     (2) The commissioner shall prescribe a standard format, including style, arrangement, and

overall appearance, and the content of an outline of coverage;

     (3) In the case of insurance producer solicitations, an insurance producer must deliver the

outline of coverage prior to the presentation of an application or enrollment form;

     (4) In the case of direct response solicitations, the outline of coverage must be presented in

conjunction with any application or enrollment form;

     (5) In the case of a policy issued to a group defined in § 27-34.2-4(4)(i), an outline of

coverage shall not be required to be delivered, provided that the information described in

subsections (h)(6)(i) — (h)(6)(vi) of this section is contained in other materials relating to

enrollment. Upon request, these other materials shall be made available to the commissioner;

     (6) The outline of coverage shall include:

     (i) A description of the principal benefits and coverage provided in the policy;

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     (ii) A description of the eligibility triggers for benefits and how those triggers are met;

     (iii) A statement of the principal exclusions, reductions, and limitations contained in the

policy;

     (iv) A statement of the terms under which the policy or certificate, or both, may be

continued in force or discontinued, including any reservation in the policy of a right to change

premiums. Continuation or conversion provisions of group coverage shall be specifically described;

     (v) A statement that the outline of coverage is only a summary, not a contract of insurance,

and that the policy or group master policy contains governing contractual provisions;

     (vi) A description of the terms under which the policy or certificate may be returned and

the premium refunded;

     (vii) A brief description of the relationship of cost of care and benefits; and

     (viii) A statement that discloses to the policyholder or certificate holder whether the policy

is intended to be a federally tax-qualified long-term-care insurance contract under § 7702B(b) of

the Internal Revenue Code of 1986, as amended, et seq.

     (i) A certificate issued pursuant to a group long-term-care insurance policy which policy is

delivered or issued for delivery in this state shall include:

     (1) A description of the principal benefits and coverage provided in the policy;

     (2) A statement of the principal exclusions, reductions, and limitations contained in the

policy; and

     (3) A statement that the group master policy determines governing contractual provisions.

     (j) If an application for a long-term-care insurance contract or certificate is approved, the

issuer shall deliver the contract or certificate of insurance to the applicant no later than thirty (30)

days after the date of approval.

     (k) At the time of policy delivery, a policy summary shall be delivered for an individual

life insurance or annuity policy that provides long-term-care benefits within the policy or by rider.

In the case of direct response solicitations, the insurer shall deliver the policy summary upon the

applicant’s request, but regardless of request shall make the delivery no later than at the time of

policy delivery. In addition to complying with all applicable requirements, the summary shall also

include:

     (1) An explanation of how the long-term-care benefit interacts with other components of

the policy;

     (2) An illustration of the amount of benefits, the length of benefits, and the guaranteed

lifetime benefits, including a statement that any long-term-care inflation projection option required

by § 27-34.2-13, is not available under the policy for each covered person;

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     (3) Any exclusions, reductions, and limitations on long-term-care benefits;

     (4) A statement that any long-term-care inflation protection option required by 230-RICR-

20-35-1 is not available under this policy. If inflation protection was not required to be offered, or

if inflation protection was required to be offered but was rejected, a statement that inflation

protection is not available under this policy that provides long-term-care benefits, and an

explanation of other options available under the policy, if any, to increase the funds available to

pay for the long-term-care benefits.

     (5) If applicable to the policy type, the summary shall also include:

     (i) A disclosure of the effects of exercising other rights under the policy;

     (ii) A disclosure of guarantees, fees or other costs related to long-term-care costs of

insurance charges in the base policy and any riders; and

     (iii) Current and projected periodic and maximum lifetime benefits.

     (6) The provisions of the policy summary listed above may be incorporated into a basic

illustration or into the life insurance policy summary that is required to be delivered in accordance

with chapter 4 of this title and the rules and regulations promulgated under § 27-4-23.

     (l) Any time a long-term benefit, funded through a life insurance vehicle by the acceleration

of the death benefit, is in benefit payment status, a monthly report shall be provided to the

policyholder. The report shall include:

     (1) Any long-term-care benefits paid out during the month;

     (2) Any costs or changes that apply or will apply to the policy or any riders;

     (3) An explanation of any changes in the policy, e.g., death benefits or cash values, due to

long-term-care benefits being paid out; and

     (4) The amount of long-term-care benefits existing or remaining.

     (m) Any policy or rider advertised, marketed, or offered as long-term-care or nursing home

insurance shall comply with the provisions of this chapter.