CHAPTER 292
2002-H 7725A
Enacted 06/28/2002

 

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RELATING TO STATUTES AND STATUTORY CONSTRUCTION

Introduced By: Representatives Carter, Fox, and San Bento

Date Introduced: February 13, 2002

It is enacted by the General Assembly as follows:

SECTION 1. Section 5-40.1-13 of the General Laws in Chapter 5-40.1 entitled "Occupational Therapy" is hereby amended to read as follows:

5-40.1-13. Fees. -- When an application is submitted to the division of professional regulation for a license to practice occupational therapy in Rhode Island, the applicant pays shall pay a non-refundable fee of sixty-two dollars and fifty cents ($62.50) to the general treasurer. A licensee shall submit a biennial renewal fee of sixty-two dollars and fifty cents ($62.50) is submitted with a renewal application on or before the first thirty-first (31st) day of March of each even year pursuant to the requirements of § 5-40.1-12(1)(a)(3), and any person who allows his or her license to lapse by failing to renew it in the manner prescribed pays shall pay an additional fee of twenty-five dollars ($25.00) as referred to in § 5-40.1-12(1) (a)(6).

            SECTION 2. Section 23-17-44 of the General Laws in Chapter 23-17 entitled "Licensing of Health Care Facilities" is hereby amended to read as follows:

            23-17-44. Moratorium on new initial nursing facility licensed beds and on increases to the licensed capacity of existing nursing facility licenses. -- (a) The licensing agency shall issue no new initial licenses for nursing facilities prior to July 1, 2004; provided, however, that:

(1) Any person holding a previously issued and valid certificate of need as of August 21, 1996 shall be permitted to effect a prior certificate from the licensing agency consistent with any other statutory and regulatory provisions which may further apply;

(2) Any person holding a nursing facility license may undertake activities to construct and operate a replacement nursing facility with the same or lower bed capacity as is presently licensed provided that the replacement facility may only be licensed upon the otherwise unconditional cessation of operation of the previously licensed nursing facility;

(3) Any certificate of need application under active review before the state agency as of

January 10, 1996, which application seeks approval of a proposal to establish a new nursing facility or seeks to increase the licensed bed capacity of an existing nursing facility shall continue to be reviewed under all the statutory and regulatory requirements in effect at the time the application was accepted for review by the state agency; and

(4) On July 1, 1999, if the statewide occupancy rate of licensed nursing facility beds exceeds ninety-two percent (92%) for the preceding calendar year, as determined by the department of human services, an assisted living residence licensed pursuant to chapter 17.4 of this title may propose to seek nursing facility licensure by conversion of assisted living residence rooms within its existing physical plant; provided however, that:

(i) The number of nursing facility beds to be licensed does not exceed the lesser of twenty (20) beds or ten percent (10%) of the licensed bed capacity of the assisted living residence;

(ii) The capital expenditures associated with the implementation of the nursing facility beds does not exceed five hundred thousand dollars ($500,000);

(iii) The nursing facility shall be limited in taking residents to those persons who are transferring from residency at the assisted living residence;

(iv) The assisted living residence must participate in the Medicaid program;

(v) The application must be submitted to the health services council on or before October 1, 1999;

(vi) The facility must comply with all requirements of the Health Care Certificate of Need Act, chapter 15 of title 23.

(b) Prior to July 1, 2004, the licensing agency shall not increase the licensed bed capacity of any existing licensed nursing facility, including any nursing facility approved for change in ownership pursuant to § 23-17-14 §§23-17-14.3 and 23-17-14.4, except for the greater of ten (10) beds or ten percent (10%) of the facility's licensed capacity. Any person holding a previously issued and valid certificate of need as of the date of passage of this section or who shall subsequently be granted a certificate of need pursuant to subsection (a) shall be permitted to effect a prior certificate from the licensing agency consistent with any other statutory and regulatory provisions which may further apply.

 

SECTION 3. Sections 25-2-14, 25-2-18.1, 25-2-25, and 25-2-29 of the General Laws in Chapter 25-2 entitled "Days of Special Observance" are hereby amended to read as follows:

 

25-2-14. White Ccane Ssafety Dday - Proclamation. -- Each year the governor shall take suitable public notice of October 15 as "Wwhite Ccane Ssafety Dday." The governor shall issue a proclamation in which he or she:

(1) Comments upon the significance of the white cane;

(2) Calls upon the citizens of the state to observe the provisions of the white cane law and to take precautions necessary to the safety of the people who are disabled;

(3) Reminds the citizens of the state of the policies with respect to people who are disabled herein as declared in § 25-2-13 and urges the citizens to cooperate in giving effect to them; and

(4) Emphasizes the need of the citizens to be aware of the presence of people who are disabled in the community and to keep safe and functional for people who are disabled the streets, highways, sidewalks, walkways, public buildings, public facilities, other public places, places of public accommodation, amusement, and resort, and other places to which the public is invited, and to offer assistance to people who are disabled upon appropriate occasions.

 

25-2-18.1. Martin Luther King, Jr. State Holiday Commission. [Effective until January 7, 2003.] -- (a) There is hereby created a permanent commission to be known as the Martin Luther King, Jr. State Holiday Commission to consist of thirteen (13) members, three (3) of whom shall be from the house of representatives, not more than two (2) from the same political party, to be appointed by the speaker; three (3) of whom shall be from the senate, not more than two (2) from the same political party to be appointed by the senate majority leader; three (3) of whom shall be representatives of the general public, to be appointed by the speaker; two (2) of whom shall be representatives of the general public to be appointed by the senate majority leader; one of whom shall be a representative of the governor's office, to be appointed by the governor; and one of whom shall be the lieutenant governor, all of the foregoing to be known as commission members. The commission shall appoint not more than sixteen (16) representatives from organizations and groups generally identified with and thought to epitomize the ideals of Dr. Martin Luther King, Jr., all of whom shall be known as non-voting affiliate members, to serve for two (2) year terms.

(b) The purpose of the commission shall be to plan, supervise, and administer, in conjunction with the federal Martin Luther King Day Commission and the Martin Luther King Center for Non-Violent Social Change, an appropriate celebration to commemorate the birthday of Dr. Martin Luther King, Jr., and the annual observance of Dr. Martin Luther King Day, which will be observed on the third Monday in January each year. The commission shall not limit its activities to the annual celebration, but shall endeavor to promote educational efforts throughout the year, as well as to promote seminar events during the annual celebration that will be of informative value to all segments of the Rhode Island community.

(c) Forthwith upon the passage of this section, The members of the commission shall meet at the call of the speaker and shall, in February of each odd-numbered year, elect from among themselves a chairperson, who shall be a legislator, and a vice-chairperson, who shall not be a government official or employee. Vacancies in the commission shall be filled in like manner as the original appointment.

(d) The commission is empowered to appoint committees to study specialized areas of concern and to report their findings and recommendations to the commission; provided, however, that one of these committees shall be an education committee.

(e) The commission is empowered to establish a Martin Luther King Scholarship Fund and to award scholarships therefrom from the fund. Decisions concerning scholarship awards shall be made by the education committee of the commission in conjunction with the higher education assistance authority.

(f) The commission is empowered to apply for and receive grants, appropriations, or gifts from any federal, state, or local agency, from any public or private foundation, and from any person, firm, or corporation in order to carry out the purposes of this chapter. The allocation of any funds received shall be decided by a majority vote of voting members in attendance at a meeting duly convened for the conduct of business by the commission.

Seven (7) members of the commission shall constitute a quorum.

(g) The commission shall meet at least four (4) times per year.

(h) On or before October 1, 1996, The commission shall adopt policies concerning the responsibilities of its voting members and non-voting affiliate members, including attendance at commission meetings.

(i) All departments and agencies of the state shall furnish advice and information, documentary and otherwise, to the commission and its agents as may be necessary or desirable to facilitate the purposes of this chapter.

(j) The speaker is hereby authorized and directed to provide suitable quarters for the commission.

(k) The commission shall file a report with the general assembly outlining its plans for the celebration on or before December 15th each year prior to the celebration.

 

25-2-18.1. Martin Luther King, Jr. State Holiday Commission. [Effective January 7, 2003.] -- (a) There is hereby created a permanent commission to be known as the Martin Luther King, Jr. State Holiday Commission to consist of thirteen (13) members, three (3) of whom shall be from the house of representatives, not more than two (2) from the same political party, to be appointed by the speaker; three (3) of whom shall be from the senate, not more than two (2) from the same political party to be appointed by the president of the senate; three (3) of whom shall be representatives of the general public, to be appointed by the speaker; two (2) of whom shall be representatives of the general public to be appointed by the president of the senate; one of whom shall be a representative of the governor's office, to be appointed by the governor; and one of whom shall be the lieutenant governor, all of the foregoing to be known as commission members. The commission shall appoint not more than sixteen (16) representatives from organizations and groups generally identified with and thought to epitomize the ideals of Dr. Martin Luther King, Jr., all of whom shall be known as non-voting affiliate members, to serve for two (2) year terms.

(b) The purpose of the commission shall be to plan, supervise, and administer, in conjunction with the federal Martin Luther King Day Commission and the Martin Luther King Center for Non-Violent Social Change, an appropriate celebration to commemorate the birthday of Dr. Martin Luther King, Jr., and the annual observance of Dr. Martin Luther King Day, which will be observed on the third Monday in January each year. The commission shall not limit its activities to the annual celebration, but shall endeavor to promote educational efforts throughout the year, as well as to promote seminar events during the annual celebration that will be of informative value to all segments of the Rhode Island community.

(c) Forthwith upon the passage of this section, The members of the commission shall meet at the call of the speaker and shall, in February of each odd-numbered year, elect from among themselves a chairperson, who shall be a legislator, and a vice-chairperson, who shall not be a government official or employee. Vacancies in the commission shall be filled in like manner as the original appointment.

(d) The commission is empowered to appoint committees to study specialized areas of concern and to report their findings and recommendations to the commission; provided, however, that one of these committees shall be an education committee.

(e) The commission is empowered to establish a Martin Luther King Scholarship Fund and to award scholarships therefrom from the fund. Decisions concerning scholarship awards shall be made by the education committee of the commission in conjunction with the higher education assistance authority.

(f) The commission is empowered to apply for and receive grants, appropriations, or gifts from any federal, state, or local agency, from any public or private foundation, and from any person, firm, or corporation in order to carry out the purposes of this chapter. The allocation of any funds received shall be decided by a majority vote of voting members in attendance at a meeting duly convened for the conduct of business by the commission.

Seven (7) members of the commission shall constitute a quorum.

(g) The commission shall meet at least four (4) times per year.

(h) On or before October 1, 1996, The commission shall adopt policies concerning the responsibilities of its voting members and non-voting affiliate members, including attendance at commission meetings.

(i) All departments and agencies of the state shall furnish advice and information, documentary and otherwise, to the commission and its agents as may be necessary or desirable to facilitate the purposes of this chapter.

(j) The speaker is hereby authorized and directed to provide suitable quarters for the commission.

(k) The commission shall file a report with the general assembly outlining its plans for the celebration on or before December 15th each year prior to the celebration.

 

25-2-25. National Women's History Week. -- The calendar week containing March eighth, "International Women's dDay," in each year is hereby designated as "National Women's History Week." The governor shall annually issue an annual proclamation inviting and urging the people of the state to observe the week in schools and other suitable places with appropriate exercises and study with an emphasis on the historical accomplishments of Rhode Island women. The department of elementary and secondary education, the Rhode Island office of civil rights, and the Rhode Island commission on women shall make appropriate information regarding the observance available to the people of the state and to schools within the limits of their budgets.

25-2-29. Saint Jean-Baptiste Day. -- The twenty-fourth day of June shall annually be set aside as a day to be known as "Saint Jean-Baptiste Day" and the governor shall annually issue an annual proclamation inviting and urging the people of the state to observe this day in suitable places with appropriate ceremonies. Saint Jean-Baptiste Day shall commemorate the feast of Saint John the Baptist Jean-Baptiste as an important observance and show of appreciation for the significant cultural, economic, and civic contributions made by Franco-Americans which that have served to enrich the culture and lifestyle of this state.

            SECTION 4. Sections 25-3-1 and 25-3-3 of the General Laws in Chapter 25-3 entitled "Work on Holidays and Sundays" are hereby amended to read as follows:

            25-3-1. Definitions. -- As used in this chapter:

(1) "Director" means the director of the department of labor and training;

(2) "Economic necessity" means and refers to any case where the director determines that:

(i) Both the economics and technology of manufacture of the product or a component thereof of the product requires continuous conversion or processing of raw materials, intermediates, or components without interruption to avoid disproportionate loss of production capacity;

(ii) The economics and technology of data processing requires the continuous operation of data processing equipment to avoid deterioration of equipment or a disproportionate loss of computer capacity or where customer requirements are such that data processing equipment must be available for input or output on a continuous basis;

(iii) Because prevailing industry practice in the manufacturing or processing of the product or in the provision of banking or financial services is to operate facilities within that industry seven (7) days per week, the failure to operate on one or more Sundays or holidays will subject the employer to a competitive hardship within the industry in which the employer competes;

(iv) Maintenance or improvement of plant or equipment cannot practically or efficiently be performed while production is in process;

(v) The scheduling of production on Sundays or holidays is necessitated by interrupted or allocated energy supplies, or shortages of raw materials or component parts;

(vi) An employer has been deprived of its normal production schedule by fire, flood, power failure, or other circumstances beyond its control; or

(vii) Circumstances, temporary in nature, are such that undue economic hardship would result from the inability to operate on one or more Sundays or holidays;

(3) "Employee" means any individual employed by an employer, but shall not include:

(i) Any individual employed in agriculture or maritime trades, including commercial fishing or boat repairs;

(ii) Any physician, dentist, attorney at law, or accountant;

(iii) Any individual engaged in the provision of health care or maintenance;

(iv) Any individual employed in a restaurant, hotel, motel, summer camp, resort, or other recreational facility (except health clubs);

(v) Any individual employed in the business of offshore petroleum or gas exploration or extraction, or in the business of servicing or supplying persons engaged in exploration or extraction;

(vi) Supervisory employees as defined in 29 U.S.C. § 213(a)(1) and regulations issued pursuant thereto to that section;

(vii) Any individual employed by an employer holding a license issued pursuant to chapter 23 of title 5; or

(viii) Any individual employed as part of a telephonic delivery of customer service, sales operations, and ancillary services related thereto to those services and operations, except for specific employment positions in the telecommunications industry which that are part of any collective bargaining agreement or employment contract in effect on July 2, 1998.

(4) "Employer" means any natural person, partnership, firm, corporation, or other enterprise engaged in industry, transportation, communication, or any other commercial occupation involving one or more employees; and

(5) "Holidays" means Sunday, New Year's Day, Memorial Day, July 4th, Victory Day, Labor Day, Columbus Day, Veterans' Day, Thanksgiving, and Christmas; provided, however, that as it pertains to all offices of state and municipal government, the term "holiday" includes in addition to the foregoing holidays enumerated in this subdivision, Dr. Martin Luther King, Jr.'s Birthday, as defined herein. in § 25-2-18.

 

25-3-3. Work on Sundays or holidays. -- (a) Work performed by employees on Sundays and holidays must be paid for at least one and one-half (1 1/2) times the normal rate of pay for the work performed; provided: (1) that it is not grounds for discharge or other penalty upon any employee for refusing to work upon any Sunday or holiday enumerated in this section chapter; (2) any manufacturer which operates for seven (7) continuous days per week is exempt from the requirement of subdivision (1).

(b) Any manufacturer of wall-covering products which operates for seven (7) continuous days per week, twenty-four (24) hours per day, and has complied with the provisions of subsection (a) is exempt from the requirement that the work be voluntary on Sundays as provided in subsection (a); provided, that the manufacturer increases employment by at least ten percent (10%), within one year of its conversion to continuous operation from non-continuous operation.

(c) Any manufacturer that operates three (3) shifts, or begins its work week on Sundays, may begin the shift or start the work week at 11:00 P.M. on Sunday and not be required to pay its employees one and one-half (1 1/2) times the normal rate of pay during the one hour period between 11:00 P.M. Sunday and 12 midnight.

SECTION 5. Sections 27-1-1, 27-1-29, 27-1-38 and 27-1-40 of the General Laws in chapter 27-1 entitled "Domestic Insurance Companies" are hereby amended to read as follows:

 

27-1-1. Site of principal office and records. -- (a) Every insurance company organized after May 3, 1956, under the laws of this state shall have its principal office and maintain all of its records, or duplicates thereof of those records, in this state; provided, however, that the director of business regulation may, after a public hearing, allow any insurance company, upon application, to locate its principal office and maintain certain original records outside of this state if it is determined that it is not inconsistent with the public interest of the people of the state of Rhode Island. In determining what is not inconsistent with the public interest of the people of the state of Rhode Island, the director shall make findings of fact, reduced to writing and filed with the secretary of state, which findings shall include, but are not be limited to the following:

(1) (a) The number of full time employees currently located within the state, and the number of full time employees anticipated to be located within the state if the petition is granted; and

(2) (b) That no detriment nor prejudice will inure to any current or anticipated future policyholders of the company by granting the application; and

(3) (c) That the granting of the application is not inimicable inimical to the ability of policyholders to file claims with and against the company, and, in furtherance of this finding, may require that the company maintain a toll free number for registering claims, and may require a claims office to be located within the state, staffed by a person authorized to issue payment on behalf of the company on approved claims; and

(4) (d) That a review of the financial records of the company and the records relied upon by the director in making the determination have satisfied the director that the company is able to meet its obligations to current policyholders. In the event that there is any risk associated with the granting the application the director may deny the application or may, in furtherance thereof of the application, may require the posting of bonds and/or securities with the general treasurer, in an amount to be determined by the director, sufficient to protect the interest of the policyholders within the state. ; and

(b) (e) The director is authorized to promulgate regulations as provided for by the Administrative Procedures Act, chapter 35 of title 42, not inconsistent with the foregoing this section, in furtherance of the authority herein granted in this section.

            27-1-29. Reports of directors, officers, and principal shareholders. -- Every person who is directly or indirectly the beneficial owner of more than ten percent (10%) of any class of any equity security of a domestic stock insurance company, or who is a director or an officer of a domestic stock insurance company, shall file in the office of the commissioner on or before the first day of July, 1966, or within ten (10) days after he or she becomes the beneficial owner, director, or officer, a statement, in a form as the commissioner may prescribe, of the amount of all equity securities of the company of which he or she is the beneficial owner. Within ten (10) days after the close of each calendar month, thereafter, if there has been a change in ownership during the month, he or she shall file in the office of the commissioner a statement, in a form as the commissioner may prescribe, indicating his or her ownership at the close of the calendar month and any changes in his or her ownership as have occurred during the calendar month.

27-1-38. Acquisition of minority interests in subsidiary insurers. -- (a) Any parent corporation directly or indirectly owning at least ninety-five percent (95%) of the aggregate issued and outstanding shares of all classes of voting stock of an insurance company created by special act of the general assembly may, pursuant to a plan for acquisition of minority interests in the insurance company adopted pursuant to this section, acquire all of the remaining issued and outstanding shares of voting stock of the insurance company, by exchange of stock, other securities, cash, other consideration, or any combination thereof of these.

(b) The board of directors, trustees, or other governing body of the parent corporation may adopt a plan for the acquisition of minority interests in a subsidiary insurer. Every plan shall set forth:

(1) The name of the company whose shares are to be acquired;

(2) The total number of issued and outstanding shares of each class of voting stock of the company, the number of its shares owned by the parent corporation and, if either of the foregoing is subject to change prior to the effective date of acquisition, the manner in which any change may occur;

(3) The terms and conditions of the plan, including the manner and basis of exchanging the shares to be acquired for shares or other securities of the parent corporation, for cash, other consideration, or any combination of the foregoing, the proposed effective date of acquisition, and a statement clearly describing the rights of dissenting shareholders to demand appraisal;

(4) If the parent corporation that has adopted the plan is neither a domestic corporation nor an authorized insurer, its consent to the enforcement against it in this state of the rights of shareholders pursuant to the plan, and a designation of the insurance commissioner as the agent upon whom process may be served against the parent corporation in the same manner as if the parent corporation were a foreign insurance company licensed to do business in this state; and

(5) The other provisions with respect to the plan that the board of directors, trustees or other governing body deems necessary or desirable, or which the director of the department of business regulation may prescribe.

(c) Upon adoption of the plan, it shall be duly executed by the president and attested by the secretary, or the executive officers corresponding thereto to president and secretary, under the corporate seal of the parent corporation which has adopted the plan. A certified copy of the plan, together with a certificate of its adoption subscribed by the officers and affirmed by them as true under the penalties of perjury and under the seal of the parent corporation, shall be submitted to the director of business regulation for his or her approval. The director of business regulation shall consider the plan and, if satisfied that it complies with this section, is fair and equitable and not inconsistent with law, the director of business regulation shall approve the plan. The director of business regulation shall approve, modify, or disapprove the plan within sixty (60) days of its submission to him or her. If the director of business regulation modifies or disapproves the plan, notification of his or her modification or disapproval, assigning the reasons therefor for that action, shall be given in writing by him or her to the parent corporation that submitted the plan. No plan shall take effect unless the approval of the director of the department of business regulation has been obtained.

(d) If the director of business regulation approves the plan as submitted or modified, the parent corporation which has adopted the plan shall deliver to each person who, as of the date of delivery, is a holder of record of stock to be acquired pursuant to the plan, a copy of the plan, or a summary of the plan approved by the director of the department of business regulation in person or by depositing a copy or a summary of the plan in the post office, postage prepaid, addressed to the shareholder at the shareholder's address of record. On or before the date of acquisition proposed in the plan, the parent corporation which has adopted the plan shall file with the director of the department of business regulation a certificate, executed by its president and attested by its secretary, or the executive officers corresponding thereto to president and secretary, and subscribed by the officers and affirmed by them as true under the penalties of perjury and under the seal of the parent corporation, attesting to compliance with this subsection.

(e) Upon compliance with this section, ownership of the shares to be acquired pursuant to the plan shall vest in the parent corporation which has adopted the plan on the date of acquisition proposed in the plan whether or not the certificates for the shares have been surrendered for exchange. The parent corporation shall be entitled to have new certificates registered in its name. Shareholders whose shares have been so acquired shall thereafter retain only the right either to receive the consideration to be paid in exchange for their shares pursuant to the plan or to demand appraisal pursuant to subsection (g).

(f) Neither the right granted by this section nor the exercise of that right by a parent corporation shall preclude the exercise by the parent corporation of any other rights it may have under any other applicable law.

(g)(1) Any shareholder of an insurance company whose shares are to be acquired by a parent corporation pursuant to a plan for the acquisition of minority interests adopted under this section shall have the right to dissent from the plan.

(2) (1) A shareholder may not dissent as to less than all of the shares registered in the shareholder's name which are owned beneficially by the shareholder. A nominee or fiduciary may not dissent on behalf of any beneficial owner as to less than all of the shares of the owner registered in the name of the nominee or fiduciary.

(3) (2) Any shareholder electing to exercise the right of dissent shall file with the parent corporation a written demand for payment of the fair value of the shareholder's shares within fifteen (15) days after the plan shall have been mailed to the shareholder.

(4) (3) Any shareholder failing to make demand within the fifteen (15) day period shall be bound by the terms of the plan. Any shareholder making a demand shall be entitled only to payment as in this section provided and shall not be entitled to vote or to exercise any other rights of a shareholder.

(5) (4) No demand may be withdrawn unless the parent corporation consents. If, however, the demand shall be withdrawn upon consent, or if the plan shall be abandoned, or if no demand or petition for the determination of fair value by a court shall have been made or filed within the time provided in this section, or if a court of competent jurisdiction shall determine that the shareholder is not entitled to the relief provided by this section, then the right of the shareholder to be paid the fair value of his or her shares shall cease and his or her status as a shareholder shall be restored, without prejudice to any corporate proceedings which may have been taken during the interim.

(6) (5) Within ten (10) days after the effective date of the acquisition under the plan, the parent corporation shall make a written offer to each shareholder who has made demand to pay for the shares at a specified price deemed by the corporation to be fair value thereof of the shares. The notice and offer shall be accompanied by a balance sheet of the insurance company as of the latest available date and not more than twelve (12) months prior to the making of the offer, and a profit and loss statement of the insurance company for the twelve (12) month period ended on the date of the balance sheet.

(7) (6) If within thirty (30) days after the effective date of the acquisition under the plan the fair value of the shares is agreed upon between any dissenting shareholder and the parent corporation, payment therefor for the shares shall be made within ninety (90) days after the effective date of the acquisition under the plan upon surrender of the certificate or certificates representing the shares. Upon payment of the agreed value, the dissenting shareholder shall cease to have any interest in the shares.

(8) (7) If, within the period of thirty (30) days, a dissenting shareholder and the parent corporation do not so agree as provided in subdivision (g)(7), then the parent corporation shall file a petition in any court of competent jurisdiction in the county in this state where the insurance company maintains its principal office praying that the fair value of the shares be found and determined; provided, that the parent corporation shall have received a written request for the filing from any dissenting shareholder given within sixty (60) days after the effective date of the acquisition under the plan, and the parent corporation shall file the petition within thirty (30) days after receipt of the request. If no request is made, the parent corporation may at its election file a petition at any time within sixty (60) days after the effective date of the acquisition date of the plan. If the parent corporation shall fail to institute the proceeding, any dissenting shareholder may do so in the name of the parent corporation.

(9) (8) The subsidiary insurance company shall join as a party petitioner in the proceeding, and in the event that the insurance company shall fail to do so, the court upon the motion of any party shall join the insurance company as a party petitioner.

(10) (9) All dissenting shareholders, wherever residing, shall be made parties to the proceeding as an action against their shares quasi in rem. A copy of the petition shall be served on each dissenting shareholder who is a resident of this state and shall be served by registered or certified mail on each dissenting shareholder who is a nonresident. Service on nonresidents shall also be made by publication as provided by law. The jurisdiction of the court shall be plenary and exclusive. All shareholders who are parties to the proceeding shall be entitled to judgment against the parent corporation and the subsidiary insurance company jointly and severally for the amount of the fair value of their shares, and execution shall issue upon the motion of any party respondent against either or both of the parent corporation and the subsidiary insurance company and their respective assets, and any execution so issued against the insurance company shall have priority over the claims of any other shareholder.

(11) (10) The court may, if it so elects, appoint one or more persons as appraisers to receive evidence and recommend a decision on the question of fair value. The appraisers shall have the power and authority specified in the order of their appointment or an amendment of the order. The judgment shall be payable only upon and concurrently with the surrender to the parent corporation of the certificate or certificates representing the shares. Upon payment of the judgment, the dissenting shareholder shall cease to have any interest in the shares.

(12) (11) The judgment shall include an allowance for interest at a rate that the court may find to be fair and equitable in all the circumstances, from the date of acquisition proposed in the plan to the date of payment.

(13) (12) The costs and expenses of any proceeding shall be determined by the court and shall be assessed against the parent corporation, but all or any part of the costs and expenses may be apportioned and assessed as the court may deem equitable against any or all of the dissenting shareholders who are parties to the proceeding to whom the parent corporation shall have made an offer to pay for the shares, if the court shall find that the action of the shareholders in failing to accept the offer was arbitrary or vexatious or not in good faith. The expenses shall include reasonable compensation for and reasonable expenses of the counsel for any experts employed by any party; but if the fair value of the share as determined materially exceeds the amount which the parent corporation offered to pay, or if no offer was made, the court in its discretion may award to any shareholder who is a party to the proceeding the sum as the court may determine to be reasonable compensation to any expert or experts employed by the shareholder in the proceeding.

(14) (13) Within twenty (20) days after demanding payment for his or her shares, each shareholder demanding payment shall submit the certificate or certificates representing his or her shares to the parent corporation for notation thereon on the certificate or certificates that the demand has been made. The shareholder's failure to do so shall, at the option of the parent corporation, terminate the shareholder's rights under this subsection unless a court of competent jurisdiction, for good and sufficient cause shown, otherwise directs. If shares represented by a certificate on which notation has been so made shall be transferred, each new certificate issued shall bear similar notation, together with the name of the original dissenting holder of the shares, and a transferee of the shares shall acquire by transfer no rights in the insurance company other than those which the original dissenting shareholder had after making demand for payment of the fair value thereof of the shares.

 

27-1-40. Conversion to stock form of organization. -- (a) Any mutual insurance company created under the laws of this state which meets or exceeds all capital and surplus funds required by law for the transaction of business in Rhode Island may convert to and become an insurance company with a capital stock form of organization upon adoption of a plan of conversion by two-thirds (2/3) vote of the board of directors or other governing body and approval of the plan by the director of the department of business regulation and the affirmative vote of one half (1/2) of its members or policyholders present in person or by proxy at a meeting called by the board of directors or other governing body. Unless otherwise provided in its charter or by-laws bylaws or plan of conversion, each member or policyholder shall have one vote, and in the case of any policy or contract of group life or other group insurance, the employer or other person to whom or in whose name the master policy or contract has been issued shall be deemed to be the member or policyholder and shall be entitled to one vote for each policy or contract of group insurance irrespective of the number of individuals insured. The plan of conversion shall provide that the insurance company shall issue and sell the stock issued in connection with the conversion at a price which represents its pro forma market value, as determined by an independent appraisal, and shall offer its stock, initially, in a subscription offering to the members or policyholders, individuals in the insurance company's management, and employee groups of the insurance company on an eligibility record date established by the board of directors, giving the members or policyholders, individuals in the insurance company's management, and employee groups priority rights to purchase the shares over the general public pro rata. The plan of conversion may provide for the establishment of accounts for the benefit of members or policyholders pursuant to which the converting insurance company shall provide for the continued maintenance of its dividend practices required by existing charter, by-laws bylaws, or policy provisions relative to its then existing lines of business, but assets in the account will be assets of the converting insurance company, subject to liabilities in the same manner and priority as all other assets of the company. The plan of conversion may provide for restrictions on the amount of stock which any person or entity may purchase in the conversion, or own or control thereafter after this, which may also be incorporated into the stock charter or agreement of association of the converted entity.

(b) In connection with the conversion, the insurance company may form a holding company or utilize an existing holding company to hold all the shares of the converted entity, and offer to its members or policyholders and the general public, subject to subscription rights in favor of members or policyholders as stated above in subsection (a), all of the stock of the holding company in lieu of the capital stock of the converting insurance company. The converting insurance company may, at the time of the conversion, merge any insurance company subsidiary into the capital stock entity resulting from the conversion, or cause the subsidiary to become a separate subsidiary of a holding company.

(c) The corporate existence of an insurance company converting to the stock form of organization shall not terminate, but the converted institution shall be deemed to be a continuation of entity of the converted insurance company so converted .

(d) The director of the department of business regulation, upon finding that the requirements of this section and applicable regulations have been met, that the terms and conditions of the plan are fair and equitable, and that the conversion has been completed with the sale of all shares offered in the conversion, shall issue a certificate of approval of the conversion to the converted entity. Upon the payment of fifty dollars ($50.00), the certificate of approval shall be filed in the office of the secretary of state, together with the certificate of the general treasurer that the converted entity has paid into the treasury for the use of the state a sum equal to one-tenth of one percent (.1%) of the capital stock, but in no event less than ten thousand dollars ($10,000). Upon the filing of the certificate with the secretary of state and payment of fifty dollars ($50.00), the secretary of state shall immediately record the certificate of approval and stock charter or agreement of association, whereupon then the stock charter or agreement of association will become effective.

(e) The director of the department of business regulation may employ staff personnel as well as and professional consultants and other persons to assist in the review of the plan of conversion and may hold public hearings as, in the director's discretion, are desirable prior to granting approval of the plan of conversion. All reasonable costs related to the review of the plan of conversion, including the costs attributable to staff personnel and professional consultants, shall be borne by the insurance company filing a plan of conversion for approval.

(f) The department of business regulation shall issue rules and regulations implementing this section, which shall be administered by the director of the department of business regulation.

(g) To the extent not inconsistent herewith with this section, each insurance company converted into a capital stock insurance company shall have all the powers, privileges, including the right to merge, convert, or otherwise restructure its corporate form upon a two-thirds (2/3) vote of its stockholders and subject to any regulatory approval as required by law, and duties and liabilities imposed upon insurance companies generally under the laws of this state, as applicable. Unless otherwise governed by the laws of this state specifically applicable to insurance companies, a capital stock entity converted pursuant to this section shall be subject to the general provisions of the Rhode Island Business Corporation Act, chapter 1.1 of title 7, with respect to its corporate governance.

 

SECTION 6. Section 27-1.1-4 of the General Laws in Chapter 27-1 entitled "Credit for Reinsurance Act" is hereby amended to read as follows:

27-1.1-4. Rules and regulations. -- The commissioner may adopt reasonable rules and regulations implementing the provisions of this law.

SECTION 7. Section 27-1.1-8 of the General Laws in chapter 27-1 entitled "Credit for Reinsurance Act" is hereby repealed.

27-1.1-8. Regulations. -- The commissioner may adopt reasonable rules and regulations for the implementation of this chapter.

 

SECTION 8. Section 27-2-25 of the General Laws in Chapter 27-2 entitled "Foreign Insurance Companies" is hereby amended to read as follows:

27-2-25. Notice of revocation or suspension of license. -- The insurance commissioner shall give written notice to the company specifying the date on which any revocation or suspension shall be effective, the term of any suspension, and the ground for the revocation or suspension; provided, that if the ground for revocation or suspension is that the company has violated any provision of law or has failed to comply with its charter, the effective date of the revocation or suspension shall be not less than ten (10) days from the date of issue of the notice, and the particulars of the violation or failure to comply with its charter shall be specified in the notice. The notice shall be served by registered or certified mail, sent postage prepaid, and addressed to the company at its last home office address, or in the case of a company of a foreign country, sent to its resident manager in the United States or at his last address appearing on the records of the insurance commissioner. An affidavit of the insurance commissioner in any form as the commissioner may prescribe, or of anyone authorized by him or her to give notice, appended to a copy thereof of the notice, that the notice has been mailed as provided above in this section shall be prima facie evidence that the notice has been duly given. The insurance commissioner shall also cause notice of the revocation or suspension to be published in any manner as the commissioner may deem necessary for the protection of the public.

SECTION 9. Section 27-2.1-4 of the General Laws in Chapter 27-2.1 entitled "Additional Fees for Foreign Insurance Companies" is hereby amended to read as follows:

            27-2.1-4. Use of fees. -- Any and all fees as prescribed by this section chapter shall be paid to the general treasurer of the state of Rhode Island.

            SECTION 10. Sections 27-2.4-20 of the General Laws in Chapter 27-2.4 entitled "Producer Licensing Act" is hereby amended to read as follows:

27-2.4-20. Revocation or modification of insurance producer's contract - Procedures. -- (a) No company shall cancel the authority of an insurance producer, if the insurance producer is not an employee of the company, and no company shall modify a contract with that insurance producer unless the company gives written notice of its intent to cancel that insurance producer or its intent to modify the contract at least one hundred eighty (180) days before the proposed effective date of any cancellation or at least one hundred eighty (180) days before the proposed effective date of any modification. No company shall allow the license of that insurance producer to expire unless the company gives written notice of its intent to do so at least one hundred eighty (180) days before the proposed effective date of expiration because of cancellation. Except as otherwise provided in this section, any insurance producer receiving notice of cancellation, modification, or expiration may, within sixty (60) days after receipt of the notice, make a written demand for reference to three (3) referees of the question as to whether or not the cancellation, modification, or expiration will so affect the renewal, continuation, or replacement of any policies placed with the company through the efforts of the insurance producer, or the services needed by any policyholder doing business with the company as a result of the efforts of the insurance producer, as to justify renewal or continuation of any policies then in effect having been placed with the company by that insurance producer. In the event the referees find that the cancellation, modification, or expiration will so affect the renewal, continuation, or replacement of any policies placed with the company through the efforts of the insurance producer, or the services needed by any policyholders doing business with the company as a result of the efforts of the insurance producer, then the referees shall order continuance or renewal of any policies expiring within a period of twelve (12) months of the issuance of the notice, at a rate of compensation to the insurance producer equal to that as provided in the agreement expiring or being so cancelled or modified, for one additional policy period equal in length to the most recent policy period of the expiring policy, but in no event for more than one year. However, the The referees shall not order continuance or renewal of any policies if they find that the reason for the cancellation or expiration of the agreement by the company was legitimately based upon one of the following grounds:

(1) The insurance producer was convicted of a dishonest act related to his or her occupation as an insurance agent;

(2) The insurance producer's license to engage as an insurance producer was revoked; or

(3) The company surrendered its license to do business in the state.

(b) An insurance producer making a written demand for a reference shall accompany the written demand with the names and addresses of three (3) persons, whereupon the company shall, within fifteen (15) days, notify the insurance producer of its choice of one of the persons to act as one of the referees and at the same time submit the names and addresses of three (3) persons to the insurance producer, who shall, within fifteen (15) days after receiving these names, notify the company in writing of his her choice of one of the persons to act as a second referee. At the same time the insurance producer shall notify the commissioner, the notice to be on a form prescribed by the commissioner, that both the company and insurance producer have chosen referees. Within ten (10) days of the receipt of this notice the commissioner shall appoint a person to serve as third referee, and shall notify that person, the insurance producer, and the company in writing of this appointment. Each person nominated or appointed as a referee shall be a disinterested person, shall be a resident of the state, and shall be willing to act as a referee. Within ten (10) working days of the appointment of the third referee, who shall serve as chairperson, the three (3) referees shall meet, hear evidence, and reduce their decisions to writing and sign it, and shall deliver a copy of the decision to the insurance producer, to the company, and to the commissioner. In the event any company receiving a written demand for a reference fails to comply with the provisions of this subsection, then the insurance producer shall have the authority to renew or continue any policies placed with that company through the efforts of the insurance producer expiring within a period of thirteen (13) months from the date of the notice of cancellation, modification, or expiration of the agreement, at a rate of compensation to the insurance producer equal to that as provided in the agreement expiring or being so cancelled or modified, for one additional policy period equal in length to the most recent policy period of the expiring policy, but in no event for more than one year.

(c) Any insurance company and any insurance producer may by written contract agree to modify the provisions of subsections (a) and (b) of this section other than the requirement of a one hundred eighty (180) day notice in the event of cancellation or a one hundred eighty (180) day notice in the event of modification of a contract or of intent to allow the expiration of a license, by provisions presented to and approved by the commissioner which he or she finds after due hearing and investigation will adequately protect both the right of the policyholder to a continuance of insurance and the services of any insurance producer of his or her own choosing and the right of the insurance producer to fair compensation for the insurance placed with a company as a result of the insurance producer's efforts. The commissioner may make reasonable rules of general application regarding these modified provisions.

(d) The decision of the referees may provide for the renewal or continuance of any or all policies expiring within a period of twelve (12) months of the issuance of any notice, at a rate of compensation to the insurance producer equal to that as provided in the agreement expiring or being so cancelled or modified, for one additional policy period equal in length to the most recent policy period of the expiring policy, but in no event for more than one year. The decision of the referees may also provide for the continuance of previous contractual provisions, if the referees, or a majority of them, find that the decision will best protect the right of a policyholder to a continuance of insurance and the services of an insurance producer of his or her own choosing and the right of any insurance producer to compensation for the insurance placed with a company as a result of his or her efforts, giving due consideration to the possibility the affected insurance producer has of obtaining similar coverage for policyholders affected from other companies at reasonable compensation. The decisions rendered in accordance with the provisions of this section providing for reference shall be binding on all companies and insurance producer affected by those decisions. If a decision orders the renewal or continuance of any policies, policyholders and the affected insurance producer shall be entitled in all respects to the same services and practices as were in effect prior to reference insofar as amounts and types of coverage, credit terms, commissions paid to the insurance producer, and insurance producer services are also continued.

(e) All policies expiring within twelve (12) months of the notice may be renewed for the policy periods as provided in subsection (d) of this section above, but no insurance producer or company relying on this section shall again refer the same issue to referees. Where other provisions of the general laws require notice to policyholders before non -renewal of any coverages, the company shall, at the request of the insurance producer who is unable to replace any policy which has been renewed for one or more policy periods in accordance with this section, comply with those provisions of law.

(f) An insurance producer initiating reference under this section and the company receiving written demand shall each be liable for the payment of the reasonable charges and expenses of his or her nominee for referee and one-half (1/2) of the compensation for the reasonable charges and expenses of the third referee. The third referee shall upon the execution of the decision furnish the insurance producer and the company with a written statement specifying in detail his or her charges for compensation and expenses. The insurance producer or the company, if aggrieved by these charges, may petition the commissioner for review. The petition shall set forth with particularity the specific item or charges in dispute. The commissioner shall, within ten (10) days of receipt of the petition, notify the interested parties of the date established for a hearing on the petition and, after the hearing, the commissioner shall approve or disapprove the charges in whole or in part, his or her findings and decisions shall be final and conclusive.

 

SECTION 11. Sections 27-3.2-5 and 27-3.2-9 of the General Laws in chapter 27-3.2 entitled "Continuing Education Requirements" are hereby amended to read as follows:

 

27-3.2-5. Continuing education advisory board. -- There shall hereby be is established the continuing education advisory board. This board shall consist of two (2) representatives of the Rhode Island Life Underwriters Association, three (3) representatives of the Independent Insurance Agents of Rhode Island, two (2) representatives of the Chartered Life Underwriters, and two (2) representatives of the Chartered Property and Casualty Underwriters. The board members shall be appointed by the commissioner and shall serve two (2) year terms. ; provided, however, that the initial term of one representative of each of the above organizations shall be one year. The board shall meet at least once a year and additionally as required. This board shall advise the insurance commissioner on the plans and operations of the continuing education program for any person licensed pursuant to this title and not exempt under § 27-3.2-3.

 

            27-3.2-9. Fee. -- Notwithstanding any provision of the general laws to the contrary, there is hereby established a fee of five dollars ($5.00) per annum, which shall be paid by all persons licensed pursuant to chapter 2.3 2.4 of this title, and shall be deposited as general revenues.

 

            SECTION 12. Sections 27-4-6, 27-4-13.1, 27-4-17, 27-4-18 and 27-4-22 of the General Laws in chapter 27-4 entitled "Life Insurance Policies and Reserves" are hereby amended to read as follows:

 

27-4-6. Terms to be stated in policy - Rebates prohibited. -- (a) No life insurance corporation doing business in this state, nor any insurance producer thereof of the corporation, shall permit, offer, or make any contract of insurance or agreement as to any contract other than as plainly expressed in the policy issued thereon on the contract or agreement; nor shall any company or any officer, insurance producer, or representative thereof of the company or producer pay, allow, or give, or offer to pay, allow, or give, directly or indirectly, as inducement to any person to insure, or give, sell, or purchase, or offer to give, sell, or purchase as an inducement or in connection with any insurance, any stocks, bonds, or other securities of any insurance company or other corporation, association, or partnership, or any dividends or profits accruing thereon on the securities, or any valuable consideration or inducement whatever not specified in the policy, nor shall any person knowingly receive as an inducement any rebate of premium, or any special favor or advantage in the dividends or other benefits, to accrue thereon, or any paid employment or contract for services of any kind, or any valuable consideration or inducement whatever, not specified in the policy.

(b) Provided, however, that Nothing in this section shall be construed as to forbid a company transacting industrial insurance on a weekly payment plan from returning to policyholders who have made premium payments for a period of at least one year, directly to the company at its home or district offices, a percentage of the premium which the company would have paid for the weekly collection of the premiums.

 

27-4-13.1. Policy loan interest rates. -- (a) The term "Published monthly average" means:

(1) Moody's corporate bond yield average - monthly average corporates, as published by Moody's Investors Service, Inc. or any successor; thereto; or

(2) In the event that the Moody's corporate bond yield average - monthly average corporates is no longer published, a substantially similar average, established by regulation issued by the commissioner.

(b) (1) Policies issued on or after May 25, 1982, shall provide for policy loan interest rates as follows:

(i) A provision permitting a maximum interest rate of not more than eight percent (8%) per annum; or

(ii) A provision permitting an adjustable maximum interest rate established from time to time by the life insurer as permitted by law.

(2) The rate of interest charged on a policy loan made under subdivision (b)(1)(ii) shall not exceed the higher of the following:

(i) The published monthly average for the calendar month ending two (2) months before the date on which the rate is determined; or

(ii) The rate used to compute the cash surrender values under the policy during the applicable period plus one percent (1%) per annum.

(3) If the maximum rate of interest is determined pursuant to subdivision (b)(1)(ii), the policy shall contain a provision setting forth the frequency at which the rate is to be determined for that policy.

(4) The maximum rate for each policy must be determined at regular intervals at least once every twelve (12) months, but not more frequently than once in any three (3) month period. At the intervals specified in the policy:

(i) The rate being charged may be increased whenever an increase as determined under subdivision (b)(2) would increase that rate by one half of one percent (.5%) or more per annum;

(ii) The rate being charged must be reduced whenever a reduction as determined under subdivision (b)(2) would decrease that rate by one half of one percent (.5%) or more per annum.

(5) The life insurer shall:

(i) Notify the policy holder policyholder at the time a cash loan is made of the initial rate of interest on the loan;

(ii) Notify the policy holder policyholder with respect to premium loans of the initial rate of interest on the loan as soon as it is reasonably practical to do so after making the initial loan. Notice does not need not to be given to the policyholder when a further premium loan is added, except as provided in subdivision (b)(5)(iii);

(iii) Send to policyholders with loans reasonable advance notice of any increase in the rate; and

(iv) Include in the notices required above in subdivision (5) of this section the substance of the pertinent provisions of subdivisions (b)(1) and (b)(3).

(6) No policy shall terminate in a policy year as the sole result of a change in the interest rate during that policy year, and the life insurer shall maintain coverage during that policy year until the time at which it would otherwise have terminated if there had been no change during that policy year.

(7) The substance of the pertinent provisions of subdivisions (b)(1) and (b)(3) shall be set forth in the policies to which they apply.

(8) For purposes of this section:

(i) The rate of interest on policy loans permitted under this section includes the interest rate charged on the reinstatement of policy loans for the period during and after any lapse of a policy;

(ii) The term "Policy loan" includes any premium loan made under a policy to pay one or more premiums that were not paid to the life insurer as they fell became due;

(iii) The term "Policyholder" includes the owner of the policy or the person designated to pay premiums as shown on the records of the life insurer; and

(iv) The term "Policy" includes certificates issued by a fraternal benefit society and annuity contracts which that provide for policy loans.

(9) No other provision of law shall apply to policy loan interest rates unless made specifically applicable to those rates.

(c) The provisions of this section shall not apply to any insurance contract issued before May 25, 1982, unless the policyholder agrees in writing to the applicability of this section.

27-4-17. Annual valuation of policies and reserves. - (a) The director of business regulation shall annually make annual valuations of all outstanding policies, additions thereto to policies, unpaid dividends, and all other obligations of every life insurance corporation doing business in this state. All valuations made by the director, or by his or her authority, shall be made upon the net premium basis. The legal minimum standard for valuation of contracts issued before January 1, 1907, shall be the American experience table of mortality with the interest at four percent (4%) per annum, and for contracts issued on or after that date the same table of mortality with interest at three and one-half percent (3 1/2%) per annum. Any company may adopt as a legal minimum standard, for the valuation of life insurance policies issued on or after January 1, 1948, the commissioners reserve valuation method, with interest at three and one-half percent (3 1/2%) per annum, or in the case of policies issued on or after April 17, 1975, four percent (4%) per annum for policies issued prior to April 27, 1979, and four and one-half percent (4 1/2%) per annum for policies issued on or after April 27, 1979, and either the commissioners 1941 standard ordinary mortality table or the commissioners 1958 standard ordinary mortality table for ordinary policies, and either the 1941 standard industrial mortality table or the commissioners 1961 standard industrial mortality table or any industrial mortality table, adopted after 1980 by the National Association of Insurance Commissioners, that is approved by regulation promulgated by the commissioner for use in determining the minimum standard of valuation for industrial policies, for industrial policies in lieu of the legal minimum standard hereinabove allowed by this section.

(b) The interest rates used in determining the minimum standard for the valuation of all life insurance policies issued in a particular calendar year on or after May 15, 1981, shall be the calendar year statutory valuation interest rates as defined in this section.

(c) (1) The calendar year statutory valuation interest rates shall be determined as follows and the results rounded to the nearer one-quarter of one percent (.25%):

For life insurance:

I = .03 + W (R1 - .03) + W/2 (R1 - .09); where R1 is the lesser of R and .09, R2 is the greater of R and .09, R is the reference interest rate defined in this section, and W is the weighting factor defined in this section;

(2) However, i If the calendar year statutory valuation interest rate for any life insurance policies issued in any calendar year determined without reference to subdivision (c)(1) differs from the corresponding actual rate for similar policies issued in the immediately preceding calendar year by less than one-half of one percent (.5%), the calendar year statutory valuation interest rate for these life insurance policies shall be equal to the corresponding actual rate for the immediately preceding calendar year. For the purposes of applying the provisions in this subdivision the immediately preceding sentence, the calendar year statutory valuation interest rate for life insurance policies issued in a calendar year shall be determined for 1980 using the reference interest rate defined for 1979 and shall be determined for each subsequent calendar year.

(3) The weighting factors referred to in the formula stated above in subdivision (c)(1) are given in the following table:

Weighting Factors for Life Insurance:

Guarantee

Duration            Weighting

(Years)              Factors

10 or less          .50

More than 10, but not more than 20       .45

More than 20    .35

For life insurance, the guarantee duration is the maximum number of years the life insurance can remain in force on a basis guaranteed in the policy or under options to convert to plans of life insurance with premium rates or non-forfeiture values or both which are guaranteed in the original policy.

(4) The reference interest rate referred to in subdivision (c)(1) shall be defined as follows:

(i) For all life insurance, the lesser of the average over a period of thirty-six (36) months and the average over a period of twelve (12) months, ending on June 30 of the calendar year next preceding the year of issue, of Moody's corporate bond yield average - monthly average corporates, as published by Moody's Investors Service, Inc., or any successor; thereto; or

(ii) In the event that the Moody's corporate bond yield average - monthly average corporates is no longer published by Moody's Investors Service, Inc., or in the event that the National Association of Insurance Commissioners determines that the Moody's corporate bond yield average - monthly average corporates, as published by Moody's Investors Service, Inc., is no longer appropriate for the determination of the reference interest rate, then an alternative method for determination of the references interest rate, which is adopted by the National Association of Insurance Commissioners and approved by regulation promulgated by the commissioner, may be substituted.

(d) The mortality table used in determining the minimum standard for the valuation of ordinary life insurance policies issued on or after May 15, 1981, shall be:

(1) The commissioners 1980 standard ordinary mortality table;

(2) At the election of the company for any one or more specified plans of life insurance, the commissioners 1980 standard ordinary mortality table with ten (10) year select mortality factors; or

(3) Any ordinary mortality table, adopted after 1980 by the National Association of Insurance Commissioners, that is approved by regulation promulgated by the commissioner for use in determining the minimum standard of valuation for these policies.

(e) Reserves for any category of policies or contracts may be calculated, at the option of the insurer, according to any standard or standards which produce greater aggregate reserves for all policies or contracts than the legal minimum standard or standards.

            27-4-18. Variance from valuation standards. -- The director of business regulation may vary the standards of interest and mortality in the case of corporations from foreign countries as to contracts issued by these corporations in countries other than the United States, and in particular cases of invalid lives and other extra hazards, and value policies seriatim or in groups, use approximate averages for fractions of a year and otherwise, and accept the valuation of the department of insurance of any other state or country if made upon the basis of, and according to, standards not lower than herein required or authorized by §§ 27-4-17 - 27-4-20, in place of the valuation herein required by §§ 27-4-17 - 27-4-20.

 

27-4-22. Assignment of interest under group life insurance. -- Subject to the terms of the policy relating to assignment of incidents of ownership thereunder under the policy, a person whose life is insured under a policy of group life insurance may assign any or all incidents of ownership granted that person under the policy, including but not limited to any right to designate a beneficiary, to have an individual policy issued to him or her, and to pay premiums. Any assignment by the insured, made either before or after May 7, 1970, shall be valid for the purpose of vesting in the assignee, in accordance with any provisions included therein in the policy as to the time at which it is to be effective, all of the incident of ownership so assigned, but without prejudice to the insurer on account of any payment it may make or individual policy it may issue without notice of the assignment. This section shall be construed as being declaratory of the law in effect prior to May 7, 1970 and not as modifying, altering, or amending that law.

 

SECTION 13. Section 27-4.2-5 of the General Laws in chapter 27-4.2 entitled "Life and Health Reinsurance Agreements Act" is hereby repealed.

 

27-4.2-5. Existing agreements. -- Insurers subject to this chapter shall reduce to zero (0) by December 31, 1997, any reserve credits or assets established with respect to reinsurance agreements entered into prior to the effective date of this law which, under the provisions of this law would not be entitled to recognition of the reserve credits or assets; provided, however, that the reinsurance agreements shall have been in compliance with laws or regulations in existence immediately preceding the effective date of this regulation.

 

SECTION 14. Sections 27-4.3-5 and 27-4.3-8 of the General Laws in Chapter 27-4.3 entitled "The Standard Nonforfeiture Law for Life Insurance" are hereby amended to read as follows:

27-4.3-5. Calculations of adjusted premiums by the nonforfeiture net level premium method. -- (a) This section shall apply to all policies issued on or after January 1, 1994. Except as provided in subsection (g) of this section, the adjusted premiums for any policy shall be calculated on an annual basis and shall be a uniform percentage of the respective premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments or special hazards, and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid up nonforfeiture benefits, so that the present value, at the date of issue of the policy, of all adjusted premiums shall be equal to the sum of: (1) the then present value of the future guaranteed benefits provided for by the policy; (2) one percent (1%) of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first ten (10) policy years; and (3) one hundred twenty-five percent (125%) of the nonforfeiture net level premium as hereinafter defined in subsection (b); provided, however, that in applying the percentage specified in (item 3) above subdivision (a)(3), no nonforfeiture net level premium shall be deemed to exceed four percent (4%) of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first ten (10) policy years. The date of issue of a policy for the purpose of this section shall be the date as of which the rated age of the insured is determined.

(b) The nonforfeiture net level premium shall be equal to the present value, at the date of issue of the policy, of the guaranteed benefits provided for by the policy divided by the present value, at the date of issue of the policy, of an annuity of one per annum payable on the date of issue of the policy and on each anniversary of the policy on which a premium falls due.

(c) In the case of policies which cause on a basis guaranteed in the policy unscheduled changes in benefits or premiums, or which provide an option for changes in benefits or premiums, other than a change to a new policy, the adjusted premiums and present values shall initially be calculated on the assumption that future benefits and premiums do not change from those stipulated at the date of issue of the policy. At the time of any change in the benefits or premiums the future adjusted premiums, nonforfeiture net level premiums, and present values shall be recalculated on the assumption that future benefits and premiums do not change from those stipulated by the policy immediately after the change.

(d) Except as otherwise provided in subsection (g), the recalculated future adjusted premiums for any policy shall be a uniform percentage of the respective future premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments and special hazards, and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid up nonforfeiture benefits, so that the present value, at the time of change to the newly defined benefits or premiums, of all future adjusted premiums shall be equal to the excess of: (1) the sum of: (i) the then present value of the then future guaranteed benefits provided for by the policy and (ii) the additional expense allowance, if any, over (2) the then cash surrender value, if any, or present value of any paid up nonforfeiture benefit under this policy.

(e) The additional expense allowance, at the time of the change to the newly defined benefits or premiums, shall be the sum of: (1) one percent (1%) of the excess, if positive, of the average amount of insurance at the beginning of each of the first ten (10) policy years subsequent to the change over the average amount of insurance prior to the change at the beginning of each of the first ten (10) policy years subsequent to the time of the most recent previous change, or, if there has been no previous change, the date of issue of the policy; and (2) one hundred twenty-five percent (125%) of the increase, if positive, in the nonforfeiture net level premium.

(f) The recalculated nonforfeiture net level premium shall be equal to the result obtained by dividing subdivision (f)(1) by subdivision (f)(2) where:

(1) Equals the sum of:

(i) The nonforfeiture net level premium applicable prior to the change multiplied by the present value of an annuity of one per annum payable on each anniversary of the policy on or subsequent to the date of the change on which a premium would have fallen due had the change not occurred, and

(ii) The present value of the increase in future guaranteed benefits provided for by the policy; and

(2) Equals the present value of an annuity of one per annum payable on each anniversary of the policy on or subsequent to the date of change on which a premium falls due.

(g) Notwithstanding any other provisions of this section to the contrary, in the case of a policy issued on a substandard basis which provides reduced graded amounts of insurance so that, in each policy year, the policy has the same tabular mortality cost as an otherwise similar policy issued on the standard basis which provides for a higher uniform amount of insurance, adjusted premiums and present values for the substandard policy may be calculated as if it were issued to provide the higher uniform amounts of insurance on the standard basis.

(h) All adjusted premiums and present values referred to in this chapter shall for all policies of ordinary insurance be calculated on the basis of (1) the commissioners 1980 standard ordinary mortality table or, (2) at the election of the insurance company for any one or more specified plans of life insurance, the commissioners 1980 standard ordinary mortality table with ten (10) year select mortality factors; adjusted premiums and present values shall for all policies of industrial insurance be calculated on the basis of the commissioners 1961 standard industrial mortality table; and adjusted premiums and present values shall for all policies issued in a particular calendar year be calculated on the basis of a rate of interest not exceeding the nonforfeiture interest rate as defined in this section, for policies issued in that calendar year; provided, however, that:

(1) At the option of the insurance company, calculations for all policies issued in a particular calendar may be made on the basis of a rate of interest not exceeding the nonforfeiture interest rate, as defined in this section, for policies issued in the immediately preceding calendar year;

(2) Under any paid-up nonforfeiture benefit, including any paid-up dividend additions, any cash surrender value available, whether or not required by § 27-4.3-2, shall be calculated on the basis of the mortality table and rate of interest used in determining the amount of any paid-up nonforfeiture benefit and paid-up dividend additions, if any;

(3) An insurance company may calculate the amount of any guaranteed paid-up nonforfeiture benefit including any paid-up additions under the policy on the basis of an interest rate no lower than that specified in the policy for calculating cash surrender values;

(4) In calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the commissioners 1980 extended term insurance table for policies of ordinary insurance and not more than the commissioners 1961 industrial extended term insurance table for policies of industrial insurance;

(5) For insurance issued on a substandard basis, the calculation of any adjusted premiums and present values may be based on appropriate modifications of the aforementioned tables mentioned in this subsection;

(6) Any ordinary mortality tables, adopted after 1980 by the National Association of Insurance Commissioners, that are approved by regulation promulgated by the commissioner of insurance for use in determining the minimum nonforfeiture standard, may be substituted for the commissioners 1980 standard ordinary mortality table with or without ten (10) year select mortality factors or for the commissioners 1980 extended term insurance table; and

(7) Any industrial mortality tables, adopted after 1980 by the National Association of Insurance Commissioners, that are approved by regulation promulgated by the commissioner of insurance for use in determining the minimum nonforfeiture standard, may be substituted for the commissioners 1961 standard industrial mortality table or the commissioners 1961 industrial extended term insurance table.

(i) The nonforfeiture interest rate per annum for any policy issued in a particular calendar year shall be equal to one hundred and twenty-five percent (125%) of the calendar year statutory valuation interest rate for the policy as defined in chapter 4.5 of this title, rounded to the nearer one-quarter of one percent (1/4 of 1%) (.25%).

(j) Notwithstanding any other provision in this title to the contrary, any refiling of nonforfeiture values or their methods of computation for any previously approved policy form which involves only a change in the interest rate or mortality table used to compute nonforfeiture values shall not require refiling of any other provisions of that policy form.

27-4.3-8. Consistency of progression of cash surrender values with increasing policy duration. -- (a) This section, in addition to all other applicable sections of this chapter, shall apply to all policies issued on or after January 1, 1994. Any cash surrender value available under the policy in the event of default in a premium payment due on any policy anniversary shall be in an amount which does not differ by more than two tenths of one percent (.2%) of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first ten (10) policy years, from the sum of: (1) the greater of zero (0) and the basic cash value hereinafter specified in subsection (b), and (2) the present value of any existing paid up additions less the amount of any indebtedness to the insurance company under the policy.

(b) The basic cash value shall be equal to the present value, on the anniversary, of the future guaranteed benefits which would have been provided for by the policy, excluding any existing paid-up additions and before deduction of any indebtedness to the insurance company, if there had been no default, less the then present value of the nonforfeiture factors, as defined in this section, corresponding to premiums which would have fallen due on and after the anniversary; provided, however, that the effects on the basic cash value of supplemental life insurance or annuity benefits or of family coverage, as described in § 27-4.3-3 or 27-4.3-5, whichever is applicable, shall be the same as are the effects specified in § 27-4.3-3 or 27-4.3-5, whichever is applicable, on the cash surrender values defined in that section.

(c) The nonforfeiture factor for each policy year shall be an amount equal to a percentage of the adjusted premium for the policy year, as defined in § 27-4.3-5. Except as is required by the next succeeding sentence of in this subsection, the percentage:

(1) Must be the same percentage for each policy year between the second policy anniversary and the later of: (i) the fifth policy anniversary, and (ii) the first policy anniversary at which there is available under the policy a cash surrender value in an amount, before including any paid-up additions and before deducting any indebtedness, of at least two tenths of one percent (.2%) of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first ten (10) policy years; and

(2) Must be such that no percentage after the later of the two policy anniversaries specified in subdivision (c)(1) may apply to fewer than five (5) consecutive policy years.

(d) No basic cash value may be less than the value which would be obtained if the adjusted premiums for the policy, as defined in § 27-4.3-5, were substituted for the nonforfeiture factors in the calculation of the basic cash value.

(e) All adjusted premiums and present values referred to in this section shall for a particular policy be calculated on the same mortality and interest bases as are used in demonstrating the policy's compliance with the other sections of this chapter. The cash surrender values referred to in this section shall include any endowment benefits provided for by the policy.

(f) Any cash surrender value available other than in the event of default in a premium payment due on a policy anniversary, and the amount of any paid up nonforfeiture benefit available under the policy in the event of default in a premium payment, shall be determined in manners consistent with the manners specified for determining the analogous minimum amounts in §§ 27-4.3-2 - 27-4.3-5 and 27-4.3-7. The amounts of any cash surrender values and of any paid up nonforfeiture benefits granted in connection with additional benefits such as those listed as items subdivisions (1) through (6) in (1) - (6) of § 27-4.3-7 shall conform with the principles of this section.

 

SECTION 15. Section 27-4.4-4 of the General Laws in Chapter 27-4.4 entitled "The Standard Nonforfeiture Law for Individual Deferred Annuities" is hereby amended to read as follows:

 

27-4.4-4. Minimum values. -- (a) The minimum values as specified in §§ 27-4.4-5 - 27-4.4-8 and 27-4.4-10 of any paid-up annuity, cash surrender, or death benefits available under an annuity contract shall be based upon minimum nonforfeiture amounts as defined in this section.

(b) With respect to In contracts providing for flexible considerations, the minimum nonforfeiture amount at any time at or prior to the commencement of any annuity payments shall be equal to an accumulation up to that time at a rate of interest of three percent (3%) per annum of percentages of the net considerations as defined in this section paid prior to that time, decreased by the sum of:

             (1) Any prior withdrawals from or partial surrenders of the contract accumulated at a rate of interest of three percent (3%) per annum; and

            (2) The amount of any indebtedness to the company on the contract, including interest due and accrued, and increased by any existing additional amounts credited by the company to the contract.

            (c) The net considerations for a given contract year used to define the minimum nonforfeiture amount shall be an amount not less than zero and shall be equal to the corresponding gross considerations credited to the contract during that contract year less an annual contract charge of thirty dollars ($30.00) and less a collection charge of one dollar and twenty-five cents ($1.25) per consideration credited to the contract during that contract year. The percentages of net considerations shall be sixty-five percent (65%) of the net consideration for the first contract year and eighty-seven and one-half percent (87 1/2%) (87.5%) of the net considerations for the second and later contract years. Notwithstanding the these net considerations provisions of the preceding sentence, the percentage shall be sixty-five percent (65%) of the portion of the total net considerations for any renewal contract year which that exceeds by not more than two (2) times the sum of those portions of the net considerations in all prior contract years for which the percentage was sixty-five percent (65%).

(d) With respect to In contracts providing for fixed scheduled considerations, minimum nonforfeiture amounts shall be calculated on the assumption that considerations are paid annually in advance and shall be defined as for contracts with flexible considerations which are paid annually with two (2) exceptions:

(1) The portion of the net consideration for the first contract year to be accumulated shall be the sum of sixty-five percent (65%) of the net consideration for the first contract year plus twenty-two and one-half percent (22 1/2%) (22.5%) of the excess of the net consideration for the first contract year over the lesser of the net considerations for the second and third contract years; and

(2) The annual contract charge shall be the lesser of (i) thirty dollars ($30.00) or (ii) ten percent (10%) of the gross annual consideration.

(e) With respect to In contracts providing for a single consideration, minimum nonforfeiture amounts shall be defined as for contracts with flexible considerations except that the percentage of net consideration used to determine the minimum nonforfeiture amount shall be equal to ninety percent (90%) and the net consideration shall be the gross consideration less a contract charge of seventy-five dollars ($75.00).

 

SECTION 16. Sections 27-4.5-3, 27-4.5-4.1, and 27-4.5-5 of the General Laws in Chapter 27-4.5 entitled "The Standard Valuation Law" are hereby amended to read as follows:

 

27-4.5-3. Actuarial opinion of reserves. -- (a) This section shall become operative at the end of the first full calendar year following the year of enactment.

(a) (b) General. Every life insurance company doing business in this state shall annually submit the opinion of a qualified actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified by the commissioner of insurance by regulation are computed appropriately, are based on assumptions which satisfy contractual provisions, are consistent with prior reported amounts, and comply with applicable laws of this state. The commissioner of insurance by regulation shall define the specifics of this opinion and add any other items deemed to be necessary to its scope.

(b) (c) Actuarial analysis of reserves and assets supporting the reserves.

(1) Every life insurance company, except as exempted by or pursuant to regulation, shall also annually include in the opinion required by subsection (b) (a), an opinion of the same qualified actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified by the commissioner of insurance by regulation, when considered in light of the assets held by the company with respect to the reserves and related actuarial items, including, but not limited to, the investment earnings on the assets and the considerations anticipated to be received and retained under the policies and contracts, make adequate provision for the company's obligations under the policies and contracts, including, but not limited to, the benefits under and expenses associated with the policies and contracts.

(2) The commissioner of insurance may provide by regulation for a transition period for establishing any higher reserves which that the qualified actuary may deem necessary in order to render the opinion required by this section.

(c) (d) Requirement for opinion under subsection (c)(b). Each opinion required by subsection (c)(b) shall be governed by the following provisions:

(1) A memorandum, in form and substance acceptable to the commissioner of insurance as specified by regulation, shall be prepared to support each actuarial opinion; and

(2) If the insurance company fails to provide a supporting memorandum at the request of the commissioner of insurance within a period specified by regulation or the commissioner of insurance determines that the supporting memorandum provided by the insurance company fails to meet the standards prescribed by the regulations or is otherwise unacceptable to the commissioner of insurance, the commissioner of insurance may engage a qualified actuary for the opinion and prepare the supporting memorandum as is required by the commissioner of insurance.

(d) (e) Requirement for all opinions. Every opinion shall be governed by the following provisions:

(1) The opinion shall be submitted with the annual statement reflecting the valuation of the reserve liabilities for each year ending on or after December 31, 1994;

(2) The opinion shall apply to all business in force including individual and group health insurance plans, in a form and substance acceptable to the commissioner of insurance as specified by regulation;

(3) The opinion shall be based on standards adopted from time to time by the actuarial standards board and on any additional standards as that commissioner of insurance may by regulation prescribe;

(4) In the case of an opinion required to be submitted by a foreign or alien company, the commissioner of insurance may accept the opinion filed by that company with the insurance supervisory official of another state if the commissioner of insurance determines that the opinion reasonably meets the requirements applicable to a company domiciled in this state;

(5) For the purposes of this section, "qualified actuary" means a member in good standing of the American Academy of Actuaries who meets the requirements set forth in the regulations;

(6) Except in cases of fraud or willful misconduct, the qualified actuary shall not be liable for damages to any person, other than the insurance company and the commissioner of insurance, for any act, error, omission, decision, or conduct with respect to the actuary's opinion;

(7) Disciplinary action by the commissioner of insurance against the company or the qualified actuary shall be defined in regulations by the commissioner of insurance; and

(8) Any memorandum in support of the opinion, and any other material provided by the company to the commissioner of insurance in connection therewith with the opinion, shall be kept confidential by the commissioner of insurance and shall not be made public and shall not be subject to subpoena, other than for the purpose of defending an action seeking damages from any person by reason of any action required by this section or by regulations promulgated hereunder under this section; provided, however, that the memorandum or other material may otherwise be released by the commissioner of insurance (i) with the written consent of the company or (ii) to the American Academy of Actuaries upon request stating that the memorandum or other material is required for the purpose of professional disciplinary proceedings and setting forth procedures satisfactory to the commissioner of insurance for preserving the confidentiality of the memorandum or other material. Once any portion of the confidential memorandum is cited by the company in its marketing or is cited before any governmental agency other than a state insurance department or is released by the company to the news media, all portions of the confidential memorandum shall be no longer confidential.

 

27-4.5-4.1. Computation of minimum standard by calendar year of issue. -- (a) Applicability. of this section. The interest rates used in determining the minimum standards for the valuation of: (1) all life insurance policies issued on or after January 1, 1994; (2) all individual annuity and pure endowment contracts issued in a particular calendar year on or after January 1, 1994; (3) all annuities and pure endowments purchased in a particular calendar year on or after January 1, 1994, under group annuity and pure endowment contracts; and (4) the net increase, if any, in a particular calendar year after January 1, 1994, in amounts held under guaranteed interest contracts; shall be the calendar year statutory valuation interest rates as defined in this section.

(b) Calendar year statutory valuation interest rates.

(1) The calendar year statutory valuation interest rates, "I", shall be determined as follows and the results rounded to the nearer one-quarter of one percent (1/4 of 1%) (.25%), where R1 is the lesser of R and .09, R2 is the greater of R and .09, R is the reference interest rate as defined in this section, and W is the weighting factor as defined in this section:

            (i) For life insurance:

I = .03 + W(R1 - .03) + W/2(R2 - .09);

            (ii) For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and from guaranteed interest contracts with cash settlement options:

I = .03 + W(R1 - .03);

(iii) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on an issued year basis, except as stated in subdivision (b)(1)(ii), the formula for life insurance stated in subdivision (b)(1)(i) shall apply to annuities and guaranteed interest contracts with guarantee durations in excess of ten (10) years and the formula for single premium immediate annuities stated in subdivision (b)(1)(ii) shall apply to annuities and guaranteed interest contracts with guarantee duration of ten (10) years or less;

(iv) For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the formula for single premium immediate annuities stated in subdivision (b)(1)(ii) shall apply; and

(v) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change in fund basis, the formula for single premium immediate annuities stated in subdivision (b)(1)(ii) shall apply; and

(2) If, however, the calendar year statutory valuation interest rate for any life insurance policies issued in any calendar year determined without reference to this subsection differs from the corresponding actual rate for similar policies issued in the immediately preceding calendar year by less than one-half of one percent (1/2 of 1%) (.5%), the calendar year statutory valuation interest rate for those life insurance policies shall be equal to the corresponding actual rate for the immediately preceding calendar year. For the purposes of applying the immediately preceding sentence, the calendar year statutory valuation interest rate for life insurance policies issued in a calendar year shall be determined for 1994 using the reference interest rate defined in 1993 by application of the standards specified in § 27-4-17(c)(2) and shall be determined for each subsequent calendar year regardless of when § 27-4.3-5 becomes effective.

(c) Weighting factors. (1) The weighting factors referred to in the formulas stated in subdivisions (b)(1)(i) and (ii) are given in the following tables as follows:

Guarantee Duration (Years) Weighting Factors

10 or less .50

More than 10, but not more than 20 .45

More than 20 .35

For life insurance, the guarantee duration is the maximum number of years the life insurance can remain in force on a basis guaranteed in the policy or under options to convert to plans of life insurance with premium rates or nonforfeiture values or both which are guaranteed in the original policy;

(2) Weighting factor for single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options is .80;

(3) Weighting factors for other annuities and for guaranteed interest contracts, except as stated in subdivision (c)(2), shall be as specified in tables paragraphs (i), (ii) and (iii) below, according to the rules and definitions in paragraphs (iv), (v) and (vi) below:

(i) For annuities and guaranteed interest contracts valued on an issue year basis:

Guarantee Duration (Years) Weighting Factor for Plan Type

A B C

5 or less: .80 .60 .50

More than 5, but not more than 10: .75 .60 .50

More than 10, but not more than 20: .65 .50 .45

More than 20: .45 .35 .35

(ii) For annuities and guaranteed interest contracts valued on a change in fund basis, the factors show in subdivision (c)(3)(i) increased by:

Plan Type

A B C

.15 .25 .05

(iii) For annuities and guaranteed interest contracts valued on an issued year basis, other than those with no cash settlement options, which do not guarantee interest on considerations received more than one year after issue or purchase and for annuities and guaranteed interest contracts valued on a change in fund basis which do not guarantee interest rates on consideration received more than twelve (12) months beyond the valuation date, the factors shown in subdivision (c)(3)(i) or derived in subdivision (c)(3)(ii) increased by:

Plan Type

A B C

.05 .05 .05

(iv) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the guarantee duration is the number of years for which the contract guarantees interest rates in excess of the calendar year statutory valuation interest rate for life insurance policies with guarantee durations in excess of twenty (20) years. For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the guaranteed duration is the number of years from the date of issue or date of purchase to the date annuity benefits are scheduled to commence;

(v) Plan Type as used in the above tables is defined as follows:

(A) Plan Type A: At any time the policyholder may withdraw funds only (1)(I) with an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurance company, or (2)(II) without an adjustment but installments over five (5) years or more, or (3)(III) as an immediate life annuity, or (4)(IV) no withdrawal permitted;

(B) Plan Type B: Before expiration of the interest rate guarantee, the policyholder may withdraw funds only (1)(I) with an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurance company, or (2)(II) without an adjustment but in installments over five (5) years or more, or (3)(III) no withdrawal permitted. At the end of the interest rate guarantee, funds may be withdrawn without the adjustment in a single sum or installments over less than five (5) years; and

(C) Plan Type C: The policyholder may withdraw funds before the expiration of interest rate guarantee in a single sum or installments over less than five (5) years either (1)(I) without adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurance company, or (2)(II) subject only to a fixed surrender charge stipulated in the contract as a percentage of the fund; and

(vi) A company may elect to value guaranteed interest contracts with cash settlement options and annuities with cash settlement options on either an issue year basis or on a change in fund basis. Guaranteed interest contracts with no cash settlement options and other annuities with no cash settlement options must be valued on an issue year basis. As used in this section, "issue year basis of valuation" refers to a valuation basis under which the interest rate used to determine the minimum valuation standard for the entire duration of the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of issue or year of purchase of the annuity or guaranteed interest contract, and "change in fund basis of valuation" refers to a valuation basis under which the interest rate used to determine the minimum valuation standard applicable to each change in the fund held under the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of the change in the fund.

(d) Reference interest rate. Reference interest rate referred to in subsection (b) shall be defined as follows:

(1) For all life insurance, the lesser of the average over a period of thirty-six (36) months and the average over a period of twelve (12) months, ending on June 30 of the calendar year next preceding the year of issue, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody's Investors Service, Inc.;

(2) For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the average over a period of twelve (12) months, ending on June 30 of the calendar year of issue or year of purchase, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody's Investors Service, Inc.;

(3) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a year of issue basis, except as stated in subsdivision subdivision (d)(2), with guarantee duration in excess of ten (10) years, the lesser of the average over a period of thirty-six (36) months and the average over a period of twelve (12) months, ending on June 30 of the calendar year of issue or purchase, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody's Investors Service, Inc.;

(4) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a year of issue basis, except as stated in subdivision (d)(2), with guarantee duration of ten (10) years or less, the average over a period of twelve (12) months, ending on June 30 of the calendar year of issue or purchase, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody's Investors Service, Inc.;

(5) For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the average over a period of twelve (12) months, ending on June 30 of the calendar year of issue or purchase, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody's Investors Service, Inc.; and

(6) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change in fund basis, except as stated in subdivision (d)(2), the average over a period of twelve (12) months, ending on June 30 of the calendar year of the change in the fund, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody's Investors Service, Inc.

(e) Alternative method for determining reference interest rates. In the event that the monthly average of the composite yield on seasoned corporate bonds is no longer published by Moody's Investors Service, Inc., or in the event that the National Association of Insurance Commissioners determines that the monthly average of the composite yield on seasoned corporate bonds as published by Moody's Investors Service, Inc. is no longer appropriate for the determination of the reference interest rate, then an alternative method for determination of the reference interest rate, which is adopted by the National Association of Insurance Commissioners and approved by regulation promulgated by the commissioner of insurance, may be substituted.

 

27-4.5-5. Reserve valuation method - Life insurance and endowment benefits. -- (a) Except as otherwise provided in §§ 27-4.5-5.1, 27-4.5-8 and 27-4.5-10, reserves according to the commissioners' reserve valuation method for the life insurance and endowment benefits of policies providing for a uniform amount of insurance and requiring the payment of uniform premiums shall be the excess, if any, of the present value, at the date of valuation, of the future guaranteed benefits provided for by the policies, over the then present value of any future modified net premiums. The modified net premiums for any policy shall be a uniform percentage of the contract premiums for the benefits so that the present value, at the date of issue of the policy, of all modified net premiums shall be equal to the sum of the then present value of the benefits provided for by the policy and the excess of (1) over (2), as follows:

(1) A net level annual premium equal to the present value, at the date of issue, of the benefits provided for after the first policy year, divided by the present value, at the date of issue, of an annuity of one per annum payable on the first and each subsequent anniversary of the policy on which a premium falls due; provided, however, that the net level annual premium shall not exceed the net level annual premium on the nineteen (19) year premium whole life plan for insurance of the same amount at an age one year higher than the age at issue of the policy; and

(2) A net one year term premium for the benefits provided for in the first policy year.

(b) For any life insurance policy issued on or after January 1, 1994 for which the contract premium in the first policy year exceeds that of the second year and for which no comparable additional benefit is provided in the first year for the excess, and which provides an endowment benefit or a cash surrender value or a combination thereof of them in an amount greater than the excess premium, the reserve according to the commissioner's reserve valuation method as of any policy anniversary occurring on or before the assumed ending date, defined herein as the first policy anniversary on which the sum of any endowment benefit and any cash surrender value then available is greater than the excess premium, shall, except as otherwise provided in § 27-4.5-8, be the greater of the reserve as of the policy anniversary calculated as described in subdivision subsection (a) and the reserve as of the policy anniversary calculated as described in subdivision subsection (a), but with: (1) the value defined in subdivision (a)(1) being reduced by fifteen percent (15%) of the amount of the excess first year premium, (2) all present values of benefits and premiums being determined without reference to premiums or benefits provided for by the policy after the assumed ending date, (3) the policy being assumed to mature on the date as an endowment, and (4) the cash surrender value provided on the date being considered as an endowment benefit. In making the above comparison contained in this subsection the mortality and interest basis stated in §§ 27-4.5-4 and 27-4.5-4.1 shall be used.

(c) Reserves according to the commissioner's reserve valuation method for: (1) life insurance policies providing for a varying amount of insurance or requiring the payment of varying premiums; (2) group annuity and pure endowment contracts purchased under a retirement plan or plan of deferred compensation, established or maintained by an employer including a partnership or sole proprietorship or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under 26 U.S.C. § 408; (3) disability and accidental death benefits in all policies and contracts; and (4) all other benefits, except life insurance and endowment benefits in life insurance policies and benefits provided by all other annuity and pure endowment contracts; shall be calculated by a method consistent with the principles of the preceding subsections (a) and (b) of this section.

 

SECTION 17. Section 27-45.7-15 of the General Laws in chapter 27-4.7 entitled "Risk-Based Capital (RBC) for "Health Organizations Act" is hereby repealed.

 

            27-4.7-15. Phase-In provision. -- For RBC reports required to be filed by health organizations with respect to the years 2000 and 2001, the following requirements shall apply in lieu of the provisions of §§ 27-4.7-4, 27-4.7-5, 27-4.7-6, and 27-4.7-7. However, in no event shall any of the following requirements preclude any action or limit any powers or duties otherwise available to the insurance commissioner under any other state laws or regulation:

(1) In the event of a company action level event with respect to a domestic health organization, the commissioner shall take no regulatory action under this chapter;

(2) In the event of a regulatory action level event under § 27-4.7-5(a)(1), (2), or (3) with respect to a domestic health organization, the commissioner shall take the actions required under § 27-4.7-4 with respect to the health organization;

(3) In the event of a regulatory action level event under § 27-4.7-5(a)(4), (5), (6), (7), (8), or (9) or an authorized control level event, the commissioner shall take the actions required under § 27-4.7-5 with respect to the health organization;

(4) In the event of a mandatory control level event with respect to a health organization, the commissioner shall take the actions required under § 27-4.7-6 with respect to the health organization;

(5) In the event the health organization's total adjusted capital at December 31, 2000, is less than the product of twenty-five one hundredths (.25) and its authorized control level RBC, the commissioner shall take the actions required under § 27-4.7-7 with respect to the health organization; and

(6) In the event the health organization's total adjusted capital at December 31, 2001, is less than the product of one-half (.5) and its authorized control level RBC, the commission shall take the actions required under § 27-4.7-7 with respect to the health organization.

SECTION 18. Section 40-18-2 of the General Laws in Chapter 40-18 entitled "Long-Term Home Health Care - Alternative to Placement in a Skilled Nursing or Intermediate Care Facility" is hereby amended to read as follows:

40-18-2. Definitions. -- As used in this chapter, the following words and phrases shall have the following meanings unless the context otherwise requires:

(1) “Adult day care service” means a comprehensive supervised program on a regularly scheduled basis to adults with disabilities for a substantial part of the day in a single physical location for a specified number of participants daily. The adult day care center shall be reviewed and approved by the department of elderly affairs or other appropriate state agency. Adult day care services may include, but are not limited to, medical supervision, social and educational activities, snacks and/or hot lunch, and transportation to and from the day care site. All adult day care services must meet the conditions set forth in the rules and regulations of the department of elderly affairs and must provide these services as an alternative to twenty-four (24) hour long term institutional care.

(2) “Case management services” means the coordination of a plan of care and services provided at home to persons with disabilities who are medically eligible for placement in a skilled nursing facility or an intermediate care facility upon discharge from a hospital. Such programs shall be provided in the person's home or in the home of a responsible relative or other responsible adult, but not provided in a skilled nursing facility and/or an intermediate care facility.

(3) “Certified home health” means a home care services agency which is licensed by the state and which is qualified to participate as home health agency under the provisions of titles XVII and XIX of the federal Social Security Act, 42 U.S.C. § 1395x, and shall provide, directly or through contract arrangement, a minimum of the following services, which are of a preventative, therapeutic, rehabilitative health guidance, and/or supportive nature to persons at home: skilled nursing services, physical therapy, occupational therapy, speech therapy, and home health aide services.

(4) “Director” means the director of the department of human services.

(5) “Emergency response system” means a twenty-four (24) hour per day monitoring service designed for use by elderly adults in the community. The purpose of that system is to provide contact between the elderly adult in the community and the appropriate emergency response agency.

(6) “Government funds” means funds provided under the provisions of chapter 8 of title 40.

(7) “Home care services” means those services provided by (i) medicare Medicaid certified and state licensed home health agency and (ii) state licensed home health aide/homemaker agency.

(8) “Home health aide/homemaker agency”, defined in § 23-17.7-2, means: (i) home health aide services, at a minimum, includes assistance with personal hygiene, dressing, feeding, and household tasks essential to the patient's health and (ii) homemaker services, at a minimum, includes light work or household tasks such as cooking, cleaning, shopping, and laundry.

(9) “Hospital” means a hospital as defined in chapter 17 of title 23.

SECTION 19. Section 42-66.4-2 of the General Laws in Chapter 42-66.4 entitled "Long-Term Health Care - Removal From A Skilled Nursing and/or Intermediate Care Facility" is hereby amended to read as follows:

            42-66.4-2. Definitions. -- As used in this chapter, unless the context otherwise requires:

(1) “Adult day care services” means a comprehensive supervised program on a regularly scheduled basis to adults with disabilities for a substantial part of the day in a single physical location for a specified number of participants daily. The adult day care center shall be reviewed and approved by the department of elderly affairs or other appropriate state agency. Adult day care services may include, but are not limited to, medical supervision, social and educational activities, snacks and/or hot lunch, and transportation to and from the day care site. All adult day care services must meet the conditions set forth in the rules and regulations of the department of elderly affairs and must provide these services as an alternative to twenty-four (24) hour long term institutional care.

(2) “Case management services” means the coordination of a plan of care and services provided at home to persons with disabilities who are medically eligible for placement in a skilled nursing facility or an intermediate care facility. These programs shall be provided in the person's home or in the home of a responsible relative or other responsible adult, but not provided in a skilled nursing facility and/or an intermediate care facility.

(3) “Certified home health” means a home care services agency which is licensed by the state and which is qualified to participate as a home health agency under the provisions of 42 U.S.C. § 1395 et seq. and § 1396 et seq., and shall provide, directly or through contract arrangement, a minimum of the following services which are of a preventative, therapeutic, rehabilitative health guidance and/or supportive nature to persons at home: skilled nursing services, physical therapy, occupational therapy, speech therapy, and home health aide services.

(4) “Director” means the director of the department of elderly affairs unless the context clearly requires a different meaning.

(5) “Emergency response system” means a twenty-four (24) hour per day monitoring service designed for use by elderly adults in the community. The purpose of the system is to provide contact between the elderly adult in the community and the appropriate emergency response agency.

            (6) “Government funds” means funds provided under the provisions of chapter 8 of title 40.

(7) “Home care services” means those services provided by (a) medicare Medicaid certified and state licensed home health agency and (b) state licensed home health aide/homemaker agency.

(8) “Home health aide/homemaker agency”, defined in § 23-17.7-2, means:

(i) Home health aide services, at a minimum, includes assistance with personal hygiene, dressing, feeding, and household tasks essential to the patient's health; and

(ii) Homemaker services, at a minimum, includes light work or household tasks such as cooking, cleaning, shopping, and laundry.

(9) “Skilled nursing facility”and “intermediate care facility” shall have the same definition as set forth in chapter 17 of title 23.

SECTION 20. Section 17-4-2 of the General Laws in Chapter 17-4 entitled "Federal Elective Officers" is hereby amended to read as follows:

17-4-2. Territory in first congressional district -- The first district consists of the territory embraced within the towns of Middletown, Portsmouth, Tiverton, Little Compton, Jamestown, Barrington, Warren, Bristol, Cumberland, Smithfield, North Smithfield, North Providence, Lincoln, and Burrillville and the cities of Newport, East Providence, Pawtucket, Central Falls, Woonsocket, and that territory in the city of Providence embraced within a line beginning at the point where the center line of Smith Street crosses the Providence-North Providence boundary line, thence southeasterly on Smith Street to Eaton Street, thence easterly on Eaton Street to Douglas Avenue, thence southeasterly on Douglas Avenue to the intersection of I-95, thence southerly on I-95 to the intersection of Smith Street, thence easterly on Smith Street to the Moshassuck River, thence southerly through the Moshassuck River to a point on Memorial Square where the world war memorial monument now or lately stood, thence southeasterly through the Providence River to the Seekonk River, thence easterly and northerly through the Seekonk River along the Providence-East Providence boundary line in the Seekonk River to the Providence-Pawtucket boundary line, thence westerly, northwesterly, and southwesterly along the Providence-Pawtucket boundary line and the Providence-North Providence boundary line to the point and place of beginning.

Territory in first and second congressional districts. - First district: The first congressional district shall consist of all of that part of the towns of: Burrillville; North Smithfield; Smithfield; Lincoln; Cumberland; North Providence; Barrington; Warren; Bristol; Portsmouth; Tiverton; Little Compton; Middletown; and Jamestown and the cities of: Woonsocket; Central Falls; Pawtucket; East Providence; and Newport.

The first congressional district shall also consist of all of that part of the city of Providence bounded by a line beginning at the intersection of Longwood avenue and the Providence-North Providence boundary line; thence northeasterly and southeasterly along the Providence-North Providence boundary line to the Providence-Pawtucket boundary line; thence southeasterly along the Providence-Pawtucket boundary line to the Providence-East Providence boundary line; thence southwesterly along the Providence-East Providence boundary line to the Providence River; thence northwesterly through the Providence River to Steeple street; thence northeasterly along Steeple street to North Main street; thence northerly on North Main street to Hewes street; thence southwesterly on Hewes street to Stevens street; thence northwesterly on Stevens street to Charles street; thence continuing northwesterly on Charles street to interstate route 95; thence southwesterly on interstate route 95 to the former New York New Haven and Hartford Railroad (hereinafter simply "New York New Haven and Hartford Railroad"); thence southwesterly on New York New Haven and Hartford Railroad to a line extended westerly to Francis street; thence westerly along that line (boundary line between census blocks 440070008001022 and 440070008001021) to a line extended southwesterly and westerly to Promenade street; thence southwesterly and westerly along that line (boundary line between census blocks 440070008001025 and 440070008001026) thence westerly to Promenade street; thence continuing westerly on Promenade street to interstate route 95; thence southerly on interstate route 95 to Providence Place; thence westerly on Providence Place to Harris avenue; continuing westerly on Harris avenue to Dean street; thence northerly on Dean street to Pleasant Valley parkway; thence northwesterly on Pleasant Valley parkway to Raymond street; thence continuing northwesterly on Chalkstone avenue; thence westerly on Chalkstone avenue to Samoset avenue; thence northerly on Samoset avenue to Alden street; thence westerly on Alden street to Victoria street; thence northerly on Victoria street to Galileo avenue; thence northeasterly on Galileo avenue to Standish avenue; thence northerly on Standish avenue to Metropolitan road; thence westerly on Metropolitan road to Mount Pleasant avenue; thence northerly on Mount Pleasant avenue to Old road; thence easterly on Old road to Smith street; thence southeasterly on Smith street to Academy avenue; thence northerly on Academy avenue to Walton street; thence westerly on Walton street to Enfield avenue; thence northerly on Enfield avenue to Isabella avenue; thence westerly on Isabella avenue to Modena avenue; thence southerly on Modena avenue to Lotus place; thence westerly on Lotus place to Gentian avenue; thence northerly on Gentian avenue to Isabella avenue; thence westerly on Isabella avenue to Longwood avenue; thence northerly on Longwood avenue to the point of origin.

Second district: The second congressional district shall consist of all of the towns of: Glocester; Foster; Scituate; Johnston; Coventry; West Warwick; West Greenwich; East Greenwich; Exeter; North Kingstown; Narragansett; South Kingstown; Charlestown; Richmond; Hopkinton; and Westerly and the cities of: Cranston and Warwick.

The second congressional district shall also consist of all of that part of the city of Providence not included in the first congressional district.

SECTION 21. Section 17-4-3 of the General Laws in Chapter 17-4 entitled "Federal Elective Officers" is hereby repealed.

17-4-3. Territory in second congressional district. -- The second congressional district consists of all of the territory within the state not embraced within the first congressional district.

SECTION 22. Sections 27-5-3.4 and 27-5-15 of the General Laws in Chapter 27-5 entitled "Fire Insurance Policies and Reserves" are hereby amended to read as follows:

27-5-3.4. Cancellation or nonrenewal of standard fire insurance policy. -- (a) A company issuing any policy of insurance which is subject to cancellation or nonrenewal by the company shall effect cancellation or nonrenewal by serving the notice thereof of it provided by the policy. That notice shall be delivered in hand to the named insured, or be left at his or her last address as shown by the company's records, or, if its records contain no last address, at his or her last business, residence, or other address known to the company, or be forwarded to that address by certified mail, return receipt requested. A return receipt from the United States postal service showing receipt of the notice at the address of the insured stated in the policy shall be sufficient proof of notice. If the company does not receive a return receipt from the United States postal service within ten (10) days, then the company shall forward the notice by first class mail and maintain proof of mailing of the notice to the insured in the ordinary course of the insurer's business, and this proof of mailing shall be sufficient proof of notice.

(b) If a policy is made payable to a mortgagee or any person other than the named insured, notice shall be given as provided in subsection (a) to the payee as well as and to the named insured.

(c) Policies subject to cancellation by the named insured upon giving notice to the company may be cancelled by serving notice in the manner herein provided in subsection (a) of this section upon the company or upon its insurance producer who issued the policy.

27-5-15. Power to create guaranty surplus and special reserve funds. -- Any insurance company organized under the laws of this state authorized to transact a fire insurance business may create the funds herein provided for in §§ 27-5-16 - 27-5-31, to be known and designated as the guaranty surplus fund and the special reserve fund, and may avail itself of the provisions of this section and §§ 27-5-16 - 27-5-31, upon complying with the requirements thereof of those sections.

SECTION 23. Sections 27-7.1-12 and 27-7.1-22 of the General Laws in Chapter 27-7.1 entitled "Workers' Compensation Insurance" are hereby repealed.

27-7.1-12. Procedural rules. -- (a) Subject to the applicable requirements of the Administrative Procedures Act, chapter 35 of title 42, the director may adopt rules and regulations establishing procedures for:

(1) The administration of this chapter, including, but not limited to, procedures governing submission of petitions for intervenor status, prefiling of testimony and exhibits, information requests, subpoena prehearing conferences, and the conduct of hearings;

(2) Use by insurers to record and report to the director their rates;

(3) Use by insurers in the recording and reporting of loss and expense experience, in order that the experience of all insurers may be made available at least annually in the form and detail necessary to aid in determining whether rating systems comply with the standards set forth in § 27-7.1-4. The director may designate advisory organizations or other agencies to assist in gathering the experience and making compilations of it, and the compilations shall be public records; and

(4) The interchange of data necessary for the application of rating plans.

(b) In order to further the administration of this chapter, the director and every insurer and advisory organization may exchange information and experience data with insurance supervisory officials, insurers, and advisory organizations in other states and may consult with them with respect to the application of rating systems.

(c) Cooperation among advisory organizations or among advisory organizations and insurers in ratemaking or in other matters within the scope of this chapter is authorized, but the filings resulting from that cooperation are subject to all the provisions of this chapter. The director may review these cooperative activities and practices and, if after hearing, any activity or practice is found to violate the provisions of this chapter, a written order may be issued specifying that the activity or practice violates the provisions of this chapter and requiring the discontinuance of the activity.

27-7.1-22. "Fresh start" provision. -- (a) In order to restore a healthy voluntary workers' compensation insurance market in the state of Rhode Island, and to avert the departure of insurers presently providing workers' compensation insurance in the state, the department shall provide for recovery of ninety percent (90%) of any deficits for the policy period beginning the first day of the month beginning after passage of this legislation through December 31, 1992, and seventy-five percent (75%) of any deficits for the policy year January 1, 1993, through December 31, 1993, pursuant to subsections (b) through (h).

(b) The term "deficits" shall mean the amount by which incurred losses and expenses associated with the entire Rhode Island workers' compensation insurance market exceeds premiums collected from risks in that market and investment income allocable to those premiums. Any deficits for the covered portion of policy year 1993 shall be initially calculated as of June 30, 1994, and annually reviewed as of June 30 of each of the subsequent four (4) years.

(c) Deficit calculations shall be made by an independent actuarial firm. Selection of this firm shall be agreed to by the department, the state compensation insurance fund, and an organization representing licensed workers' compensation insurers. Compliance with NCCI pool servicing carrier standards shall be reviewed by the department and shall be considered by the actuary in determining the extent of any deficit.

(d) Assessments for 1992 deficits shall apply to all policies issued on or after January 1, 1995, and assessments for 1993 deficits shall apply to all policies issued on or after January 1, 1996. Deficits shall be assessed against current policy year insureds and collected as a surcharge on current policy year premiums.

(e) (1) Any deficits determined as of June 30, 1994, shall be amortized over a five (5) year period, with twenty percent (20%) of the deficits due when policies for policy year 1995 are issued.

(2) Any 1992 deficits determined as of June 30, 1995, shall be amortized over a four (4) year period, with twenty-five percent (25%) of the deficits due when policies for policy year 1996 are issued. Subsequent 1992 deficit determination shall be made by each June 30 amortized over the remaining period, with a final deficit determination to be made by June 1, 1998.

(3) Any 1993 deficits determined as of June 30, 1995, shall be amortized over a five (5) year period, with twenty percent (20%) of the deficits due when policies for policy year 1996 are issued. Any 1993 deficits determined as of June 30, 1995, shall be amortized over a four (4) year period, with twenty-five percent (25%) of the deficits due when policies for policy year 1997 are issued. Subsequent 1993 deficit determinations shall be made by each June 30 and amortized over the remaining period, with a final deficit determination to be made by June 1, 1999.

(f) In no instance shall the deficit surcharge for either policy year 1992 or 1993 exceed ten percent (10%) of the policyholder's current policy year written premium, nor shall the combined surcharge for 1992 and 1993 exceed ten percent (10%) of the policyholder's current policy year written premium. Any outstanding balance as a result of this limitation shall be assessable at ten percent (10%) of the current policy year written premium per year until all of those obligations are fulfilled.

(g) The department shall annually notify the state compensation insurance fund and each insurance carrier writing workers' compensation insurance in Rhode Island of the amount of any deficit surcharge, as established by the independent actuarial firm, to be charged against policy holders.

(h) The state compensation insurance fund and each insurance carrier writing workers' compensation insurance shall collect deficit surcharges under this section at the time the policy is issued. After collection, those surcharges shall be transferred to an interest bearing custodial account administered by the director of the department of labor, for the exclusive benefit of the workers' compensation insurance carriers. Monies collected and invested in the account and interest earned thereon shall be distributed only to worker's compensation carriers in accordance with a schedule promulgated by the department, based on the report of the independent actuarial firm. The monies shall be and remain the property of the workers' compensation carriers and shall not constitute public funds.

SECTION 24. Sections 27-7.2-9.1, 27-7.2-20.1 and 27-7.2-20.2 of the General Laws in Chapter 27-7.2 entitled "Workers' Compensation Insurance Fund" are hereby amended to read as follows:

             27-7.2-9.1. Insurance coverage program. -- (a) Provision of workers' compensation coverage. Subject to the limitations set forth in this chapter, the fund shall provide workers' compensation insurance against liabilities arising under title 28 for any employer that tenders the necessary premium.

(b) Applications; provision of coverage.

(1) Policy applications. Applicants may apply for coverage by the fund in good faith, either directly or through an insurance producer licensed by the state of Rhode Island to procure workers' compensation insurance according to rules adopted by the board under § 27-7.2-17.

(2) Denial, cancellation, and nonrenewal. The nonpayment of premium for current or prior policies issued by the fund to the applicant, or to another entity for which the fund deems the applicant to be a successor in interest, may be a basis for the fund to deny, nonrenew not renew or terminate coverage. The failure or refusal by an applicant or insured to fully and accurately disclose to the fund information concerning the applicant's or insured's ownership, change of ownership, operations, or payroll, including allocation of payroll among state and federal compensation programs, classification of payroll, and any other information determined by the fund to be important in determining proper rates shall be sufficient grounds for the fund to deny an application or to nonrenew not renew or cancel an existing policy or to assess a premium surcharge against the insured pursuant to subsection (d). The failure or refusal by any insured or applicant to comply with the fund's safety requirements or to permit premises inspections to the sole satisfaction of the fund shall be sufficient grounds for having its workers' compensation insurance coverage surcharged, nonrenewed not renewed, or cancelled, or an application for the coverage denied.

(3) Appeal to director. Any determination of the fund with respect to the denial, cancellation, or nonrenewal of any workers' compensation insurance policy against liabilities arising under title 28, with the exception of cancellation for nonpayment of premium, may be appealed to the director of the department of business regulation, in writing, within thirty (30) days of notice of this action. If the director thereupon determines that the fund has unreasonably denied, cancelled, or failed to renew any workers' compensation insurance policy, the fund shall in good faith reconsider issuing, reinstating, or renewing the workers' compensation insurance policy. If the fund has not issued, reinstated, or renewed the workers' compensation insurance policy within thirty (30) days of a determination of the director, the applicant or insured may appeal the denial, cancellation, or failure to renew by the fund to the superior court for Providence County.

(c) Exemptions.

(1) Except as otherwise provided in subsection (d), the fund shall be subject to rate regulation under chapter 7.1 of this title.

(2) Notwithstanding the provisions of this section foregoing, if, at any time, the director finds that a rate or filing of the fund is unjust, unreasonable, inadequate, excessive, or unfairly discriminatory, he or she shall, after a hearing held upon not less than ten (10) days written notice, specifying the matters to be considered at that hearing, issue an order specifying in what respects he or she finds that the rate or filing is unjust, unreasonable, inadequate, excessive, or unfairly discriminatory and stating when within a reasonable period thereafter after this the rate shall no longer be used or the filing shall be deemed no longer effective. That order shall not affect any contract or policy made or issued prior to the expiration of the period set forth in the order. If, however, the director finds that an unfair discrimination exists in the application of a rate or filing to an individual applicant or insured, the director may, after a hearing held on like similar notice to the fund, issue an order that the discrimination be removed.

(d) Rate regulation.

(1) When a filing is not accompanied by the information upon which the fund supports that filing, and the director does not have sufficient information to determine whether the filing meets the requirements of applicable law, the director may require the fund to furnish the information upon which it supports the filing. The information furnished in support of a filing may include: (i) the experience or judgment of the fund, (ii) its interpretation of any statistical data it relies upon, (iii) the experience of other insurers or rating organizations, or (iv) any other relevant factors.

(2) Notwithstanding any law to the contrary, the fund and any workers' compensation insurance policyholder may mutually consent to modify the rates for that policyholder's workers' compensation insurance policy, provided the fund files notice of the modification with the director of the department of business regulation.

(3) Notwithstanding any law to the contrary, the fund may establish and apply a premium surcharge protocol. The protocol shall provide for higher premium and surcharge payments by insureds who present higher than normal risks within a class, including the ability of the fund to assess from time to time a premium surcharge of up to three (3) times its otherwise applicable premium rate, as it deems appropriate to further the public purposes set forth herein in this chapter. The surcharge may be payable, at the option of the fund, upon assessment, over the policy year, or upon renewal. Any premium surcharge assessed by the fund may be appealed to the director of the department of business regulation within twenty (20) days of notice thereof of the surcharge, and the director may modify or rescind the surcharge if the director determines that the surcharge is unjust, unreasonable, inadequate, excessive or unfairly discriminatory.

(4) Notwithstanding any other provisions of law, immediately upon May 18, 1992, the fund may issue workers' compensation insurance policies at an initial rate not in excess of the rates then in effect for residual market workers' compensation insurance coverage offered by any other insurers within the state of Rhode Island, subject to the discretion of the fund to apply discounts and surcharge multipliers of up to three (3) times the premiums that would otherwise be applicable under the rates, with the premium surcharge to be payable as provided in subdivision (d)(4). The fund may continue to issue workers' compensation insurance coverage at the initial rates until the effectiveness of any revised rates filed pursuant to subdivision (d)(1).

27-7.2-20.1. Workers' compensation capital assessment. -- (a) In order to establish the capital reserves and surplus to allow the fund to effect the assumption of residual risk market in fulfillment of the public purposes as set forth above in this chapter, a workers' compensation capital assessment shall be assessed and collected by the director of the department of labor and training against each insurance company deemed by the director of the department of business regulation to have been licensed as of January 1, 1991, to write workers' compensation insurance in Rhode Island. The assessment shall be payable quarterly and due within fifteen (15) days following the close of each calendar quarter or, at the discretion of the director of the department of labor and training, on an annual basis on or before July first of each year. The director of the department of labor and training shall have the power to institute suit to collect any assessment under this section to the same extent as provided in § 28-37-28.

(b) The director of the department of labor and training shall collect all of the capital assessment amounts in a separate restricted purpose account and shall promptly transfer all the amounts to the fund upon receipt and the amounts shall become the property of the fund pursuant to § 27-7.2-14 for capital reserve and surplus purposes in recognition of the fund's role as carrier of last resort. During the transition period, the assessment for this party shall equal three percent (3%) of gross premiums received from workers' compensation insurance or employer's liability insurance written or renewed on risks within the state or subject to the jurisdiction of the state, or any other level of gross premiums that the director of the department of business regulation deems appropriate to ensure both the solvency of the fund and the fund's ability to establish a surplus reasonably adequate to allow it to complete the assumption of the residual risk market in furtherance of the public purposes stated above in this chapter. For the purpose of this chapter, "gross premiums" shall be calculated for insurance companies in the same manner as provided in § 28-37-14 for the applicable period. From and after the transition period, the director of the department of business regulation shall periodically determine the rate of the assessment at levels adequate to allow the fund to service the residual risk market and satisfy the reserve and surplus requirements of § 27-7.2-20.2.

(c) Each insurance company may pass through the entire capital assessment amount to each of its policyholders on a pro rata basis.

(d) In the event that any insurance company deemed by the director of the department of business regulation to have been licensed on January 1, 1991, to write workers' compensation insurance discontinues the issuance of workers' compensation insurance policies in Rhode Island prior to December 31, 1994, that company shall be and remain obligated to pay the capital assessment surcharge through December 31, 1994, calculated on the basis of the average voluntary and residual risk gross premiums received or the average voluntary and residual risk gross losses paid in the thirty six (36) month period prior to its departure from the Rhode Island market.

(d) (e) The fund shall pay an annual fee to the director of the department of labor and training in the amount of two-tenths of one percent (.2%) of the earned premiums of the fund for the prior year in recognition of the continuing obligations of the department of labor and training under § 27-7.2-20.1 subsections (a) and (b) hereof of this section.

27-7.2-20.2. Reserves - Premium to surplus ratio - Insolvency fund. -- (a) From and after January 1, 1995, The fund shall maintain a ratio of premiums on policies written to surplus of not more than three (3) to one, or any greater or lesser ratio that the director of the department of business regulation deems appropriate. In determining the ratio, the director may at all times consider the net present value of future capital assessment amounts as current surplus. To facilitate the ongoing oversight of the fund, the fund shall submit to the department of business regulation quarterly and annual statements in the format and scope specified in § 27-12-2.

(b) The fund shall not participate in, or be subject to, the insurers' insolvency fund established under § 27-34-6.

(c) In the event of the liquidation of the fund pursuant to the Insurers' Rehabilitation and Liquidation Act, R.I. Gen. Laws § 27-14.3 chapter 14.3 of this title, the fund's policy holders, in their capacity as owners of the fund, shall have no distributive claims under § 27-14.3-46(8) to the liquidation estate of the fund and, upon satisfaction of any other class 1 through class 7 claims under § 27-14.3-46, the insurance commissioner, as receiver, shall distribute the residual, if any, of the fund's liquidation estate to the director of the Rhode Island department of labor and training; provided, however, that in no event shall the foregoing affect the validity or priority of: (i) (1) any claims arising from and within the coverage of any policies of the fund; or (ii) (2) claims of the director of the Rhode Island department of labor and training to repayment of the term note of the fund issued pursuant to § 27-7.2-19.

 

SECTION 25. Section 27-9-51 of the General Laws in chapter 27-9 entitled "Casualty Insurance Rating" is hereby amended to read as follows:

 

27-9-51. Excess profits for workers' compensation and employer's liability insurance prohibited. -- (a) Each insurance group shall file with the department prior to July 1 of each year, on a form prescribed by the department, the following data for workers' compensation and employers' liability insurance:

(1) The calendar year earned premium;

(2) Accident year incurred losses and loss adjustment expenses;

(3) The administrative and selling expenses incurred in Rhode Island or allocated to Rhode Island for the calendar year; and

(4) Policyholder dividends applicable to the calendar year.

(b) (1) Excess profit has been realized if the underwriting gain is greater than the anticipated underwriting profit plus five percent (5%) of earned premiums for the three (3) most recent calendar years;

(2) As used in this section with respect to any three (3) year period, "anticipated underwriting profit" means the sum of the dollar amounts obtained by multiplying, for each rate filing of the insurance group in effect during that period, the earned premiums applicable to the rate filing during that period by the percentage factor included in the rate filing for profit and contingencies, the percentage factor having been determined with due recognition to investment income from funds generated by Rhode Island business. Separate calculations need not be made for consecutive rate filings containing the same percentage factor for profits and contingencies.

(c) Each insurance group shall also file a schedule of Rhode Island loss and loss adjustment experience for each of the three (3) most recent accident years. The incurred losses and loss adjustment expenses shall be valued as of December 31 of the accident year, developed to an ultimate basis, and two (2) twelve (12) month intervals thereafter after this, each developed to an ultimate basis so that a total of three (3) evaluations will be provided for each accident year. The first year to be so reported shall be accident year 1982, so that the reporting of three (3) accident years will not take place until accident years 1983 and 1984 have become available. For reporting purposes unrelated to determining excessive profits, the loss and loss adjustment experience of each accident year shall continue to be reported until each accident year has been reported at eight (8) stages of development.

(d) Each insurance group's underwriting gain or loss for each calendar accident year shall be computed as follows: The sum of the accident-year incurred losses and loss adjustment expenses as of December 31 of the year, developed to an ultimate basis, plus the administrative and selling expenses incurred in the calendar year, plus policyholder dividends applicable to the calendar year, shall be subtracted from the calendar year earned premium to determine the underwriting gain or loss.

(e) For the three (3) most recent calendar-accident years, the underwriting gain or loss shall be compared to the anticipated underwriting profit.

(f) If the insurance group has realized an excess profit, the department shall order a return of the excess amounts after affording the insurance group an opportunity for a hearing and otherwise complying with the provisions of the Administrative Procedures Act, chapter 35 of title 42. The excess amounts shall be refunded in all instances unless the insurance group affirmatively demonstrates to the department that the refund of the excess amounts will render the insurance group insolvent under the provisions of this title.

(g) Any excess profit of an insurance group offering workers' compensation or employers' liability insurance shall be returned to policyholders in the form of a cash refund or be returned to policyholders in the form of a credit toward the future purchase of insurance. The excess amount shall be refunded on a pro rata basis in relation to the final compilation year earned premiums to the workers' compensation policyholders of record of the insurance group on December 31 of the final compilation year.

(h) (1) Cash refunds to policyholders may be rounded to the nearest dollar;

(2) Data in required reports to the department may be rounded to the nearest dollar;

(3) Rounding, if elected by the insurance group, shall be applied consistently.

(i) (1) Refunds shall be completed in one of the following ways:

(i) If the insurance group elects to make a cash refund, the refund shall be completed within sixty (60) days of the entry of a final order indicating that excess profits have been realized; or

(ii) If the insurance group elects to make refunds in the form of a credit to renewal policies, the credits shall be applied to policy renewal premium notices which are forwarded to insureds more than sixty (60) calendar days after the entry of a final order indicating that excess profits have been realized. If an insurance group has made this election, but an insured thereafter after this cancels his or her policy or otherwise allows his or her policy to terminate, the insurance group shall make a cash refund not later than sixty (60) days after the termination of the coverage;

(2) Upon completion of the renewal credits or refund payments, the insurance group shall immediately certify to the department that the refunds have been made.

(j) Any refund or renewal credit made pursuant to this section, for the purposes of reporting under this section for subsequent years,. shall be treated as a policyholder dividend applicable to the year in which it is incurred. for the purposes of reporting under this section for subsequent years.

SECTION 26. Section 27-10.1-4 of the General Laws in Chapter 27-10.1 entitled "Motor Vehicle Damage Appraisers" is hereby repealed.

27-10.1-4. Applicability of chapter to present appraisers. -- Persons engaged in the performance of motor vehicle damage appraisal as of May 15, 1973, shall be entitled, upon proof thereof and payment of fees, to be issued a license without examination provided they file an application therefor prior to November 1, 1973.

SECTION 27. Section 27-11.1-6 of the General Laws in chapter 27-11.1 entitled "Investments by Domestic Insurance Companies" is hereby amended to read as follows:

27-11.1-6. Applicability. -- This chapter shall apply to all domestic companies issued a certificate of compliance subsequent to May 8, 1984. Those domestic companies currently in possession of a certificate of compliance shall have three (3) years from May 8, 1984, to be in conformance with the provisions of this chapter.

SECTION 28. Section 27-12-4 of the General Laws in Chapter 27-12 entitled "Annual Reports of Insurance Companies" is hereby amended to read as follows:

27-12-4. Penalty for refusal to answer interrogatories. -- Every insurance producer who shall refuse or neglect to answer any interrogatories required under § 27-12-3 for the space of thirty (30) days, and continues to act as an insurance producer, shall be liable to the penalty prescribed in § 27-2.3-12 [repealed] 27-2.4-14.

SECTION 29. Section 27-13.1-3 of the General Laws in Chapter 27-13.1 entitled "Examinations" is hereby amended to read as follows:

27-13.1-3. Authority, scope, and scheduling of examinations. -- (a) The director or any of his or her examiners may conduct an examination under this chapter of any company as often as the director in his or her sole discretion deems appropriate, but shall, at a minimum, conduct an examination of every insurer licensed in this state not less frequently than once every five (5) years. In scheduling and determining the nature, scope, and frequency of the examinations, the director shall consider such matters as the results of financial statement analyses and ratios, changes in management or ownership, actuarial opinions, reports of independent certified public accountants, and other criteria as set forth in the Examiners' Handbook adopted by the National Association of Insurance Commissioners and in effect when the director exercises discretion under this section.

(b) For the purposes of completing an examination of any company under this chapter, the director may examine or investigate any person, or the business of any person, in so far as the examination or investigation is, in the sole discretion of the director, necessary or material to the examination of the company.

(c) In lieu of an examination under this chapter of any foreign or alien insurer licensed in this state, the director may accept an examination report on the company as prepared by the insurance department for the company's state of domicile or port of entry state until January 1, 1994. Thereafter, the reports may only be accepted if:

(1) (i) The insurance department was at the time of the examination accredited under the National Association of Insurance Commissioners' financial regulation standards and accreditation program; or

(2) (ii) The examination is performed under the supervision of an accredited insurance department or with the participation of one or more examiners who are employed by an accredited state insurance department and who, after a review of the examination work papers and report, state under oath that the examination was performed in a manner consistent with the standards and procedures required by their insurance department.

 

SECTION 30. Section 27-14.3-7 of the General Laws in Chapter 27-14.3 entitled "Insurers' Rehabilitation and Liquidation Act" is hereby repealed.

27-14.3-7. Effective date of chapter and inapplicability to pending delinquency proceedings. -- Every proceeding up to the present time commenced under the laws in effect before the enactment of this chapter shall not be deemed to have commenced under this chapter for the purpose of conducting the proceeding from this time forth. The provisions of this chapter shall apply only to those delinquency proceedings commenced after July 23, 1993. Nothing contained in this chapter shall be construed to create a legal right that is otherwise nonexistent under existing law, and nothing in this chapter shall be construed to deprive a person of any prior existing legal right. Notwithstanding any other provisions of law, for those delinquency proceedings commenced after July 23, 1993, this chapter shall supersede, repeal, and replace all provisions of law pertaining to insurance insolvencies and receiverships contained in chapters 1 and 14.

SECTION 31. Sections 27-16-1.2 and 27-16-5 of the General Laws in Chapter 27-16 entitled "Unauthorized Insurance Business" are hereby amended to read as follows:

27-16-1.2. Certificate of compliance - Exceptions. -- (a) It shall be unlawful for any insurer to transact insurance business in this state as set forth in subsection (b) of this section without a certificate of compliance from the commissioner; provided, however, that this section shall not apply to:

(1) The lawful transaction of surplus lines insurance;

(2) The lawful transaction of reinsurance by insurers;

(3) Transactions in this state involving a policy lawfully solicited, written, and delivered outside of this state covering only subjects of insurance not resident, located, or expressly to be performed in this state at the time of issuance, and which transactions are subsequent to the issuance of the policy;

(4) Attorneys acting in the ordinary relation of attorney and client in the adjustment of claims or losses;

(5) Transactions in this state involving group life and group sickness and accident or blanket sickness and accident insurance or group annuities where the master policy of the groups was lawfully issued and delivered in and pursuant to the laws of a state in which the insurer was authorized to do an insurance business, to a group organized for purposes other than the procurement of insurance, and where the policyholder is domiciled or otherwise has a bona fide situs;

(6) Transactions in this state involving any policy of insurance or annuity contract issued prior to May 15, 1973;

(7) Transactions in this state relative to a policy issued outside of this state involving insurance on vessels, craft, or hulls, cargoes, marine protection, and indemnity or other risk, including strikes and war risks commonly insured under ocean or wet marine forms of policy;

(8) Transactions in this state involving contracts of insurance issued to one or more industrial insureds. An industrial insured is defined as an insured:

(i) Which procures the insurance of any risk by the use of the services of a full-time employee acting as insurance manager or buyer or the services of a regularly and continuously retained qualified insurance consultant;

(ii) Whose aggregate annual premiums on all risks excluding workers' compensation and group total at least twenty-five thousand dollars ($25,000); and

(iii) Which has at least twenty-five (25) full-time employees; and

(9) (i) Transactions in this state involving life insurance, health insurance, or annuities provided to educational or religious or charitable institutions organized and operated without profit to any private shareholder or individual for the benefit of the institutions and individuals engaged in the service of the institutions;

(ii) But This exemption shall be conditional upon the company complying with the following requirements:

(A) Payment of an annual registration fee of five hundred dollars ($500);

(B) Filing a copy of any policy or contract form, including annuities issued to any Rhode Island residents with the commissioner of insurance. Effective January 1, 1997, Each policy and contract form, including annuities, shall contain (on its front and declaration page) in at least twelve (12) point type the following notice:

NOTICE TO RHODE ISLAND RESIDENTS

THIS CONTRACT HAS BEEN PLACED WITH AN INSURER NOT LICENSED TO DO BUSINESS IN THE STATE OF RHODE ISLAND BUT ELIGIBLE AS AN UNLICENSED REGISTERED INSURER PURSUANT TO THE UNAUTHORIZED BUSINESS STATUTE. THE INSURER IS NOT A MEMBER OF THE RHODE ISLAND LIFE AND HEALTH GUARANTY ASSOCIATION. SHOULD THE INSURER BECOME INSOLVENT, THE PROTECTION AND BENEFITS OF THE ASSOCIATION ARE NOT AVAILABLE.

(C) Filing a copy of its annual statement, prepared pursuant to the laws of its state of domicile, as well as and such any other financial material as that may be requested by the commissioner; and further,

(D) Provided The company agrees to appoint the commissioner of insurance, and his or her successors in office, as its attorney to receive service of legal process issued against it in Rhode Island. The appointment is to be irrevocable and to bind the commissioner, and any successors in interest, and to remain in effect as long as there is in force in this state any contract issued by the company or any obligations arising therefrom from a contract.

(10) Rental car companies and their employees principally engaged in the rental of motor vehicles and which offer in connection with and incidental to the rental of motor vehicles various optional insurance coverages during the term of the rental, which shall be no more than forty-five (45) days.

(11) Transactions that are insurance securitizations or reinsurance transactions entered into by a protected cell of a protected cell company organized under the Protected Cell Companies Act, chapter 64 of this title, as those terms are defined or utilized in that act chapter.

(b) Any of the following acts in this state effected by mail or otherwise, by or on behalf of an insurer, is deemed to constitute the transaction of an insurance business in this state. The venue of an act committed by mail is at the point where the matter transmitted by mail is delivered and takes effect. Unless otherwise indicated, the term "insurer," as used in this section, includes all corporations, associations, partnerships, and individuals engaged as principals in the business of insurance and also includes interinsurance exchanges and mutual benefit societies:

(1) The making or proposing to make, as an insurer an insurance contract;

(2) The making of or proposing to make, as guarantor or surety, any contract of guaranty or suretyship as a vocation and not merely incidental to any other legitimate business or activity of the guarantor or surety;

(3) The taking or receiving of any application for insurance;

(4) The receiving or collection of any premium, commission, membership fees, assessments, dues, or other consideration for an insurance or any part thereof of an insurance;

(5) The issuance or delivery of contracts of insurance to residents of this state or to persons authorized to do business in this state;

(6) Directly or indirectly acting as an agent or insurance producer for or otherwise representing or aiding on behalf of another any person or insurer in the solicitation, negotiation, procurement, or effectuation of insurance or renewals thereof of insurance or in the dissemination of information as to coverage or rates, forwarding of applications, delivery of policies or contracts, inspection of risks, fixing of rates or investigation or adjustment of claims or losses, or in the transaction of matters subsequent to effectuation of the contract and arising out of it, or in any other manner representing or assisting a person or insurer in the transaction of insurance with respect to subjects of insurance, resident, located, or to be performed in this state. The provisions of this subsection shall not operate to prohibit full-time salaried employees of a corporate insured from acting in the capacity of an insurance manager or buyer in placing insurance in behalf of the employer;

(7) The transaction of any kind of insurance business specifically recognized as transacting an insurance business within the meaning of the statutes relating to insurance; or

(8) The transacting or proposing to transact any insurance business in substance equivalent to any of the foregoing these in a manner designed to evade the provisions of the statutes.

(c) The failure of an insurer transacting insurance business in this state to obtain a certificate of compliance shall not impair the validity of any act or contract of the insurer and shall not prevent the insurer from defending any action at law or suit in equity in any court of this state, but no insurer transacting insurance business in this state without a certificate of authority shall be permitted to maintain an action in any court of this state to enforce any right, claim, or demand arising out of the transaction of insurance business until the insurer shall have obtained a certificate of authority.

(d) In the event of the failure of any unauthorized insurer to pay any claim or loss within the provisions of the insurance contract, any person who assisted or in any manner aided directly or indirectly in the procurement of the insurance contract shall be liable to the insured for the full amount of the claim or loss in the manner provided by the provisions of the insurance contract.

27-16-5. Acts constituting appointment of attorney to receive process. -- Any of the following acts in this state, effected by mail or otherwise, by an unauthorized foreign or alien insurer is equivalent to and shall constitute an appointment by the insurer of the insurance commissioner and the commissioner's successor or successors in office to be the insurer's true and lawful attorney, upon whom may be served all lawful process in any action, suit, or proceeding instituted by or on behalf of an insured or beneficiary arising out of the contract of insurance, and the act shall be signification of its agreement that service of process is of the same legal force and validity as personal service of process in this state upon the insurer: (1) the issuance or delivery of contracts of insurance or reinsurance to residents of this state or to corporations authorized to do business therein in this state; (2) the solicitation of applications for the contracts; (3) the collection of premiums, membership fees, assessments or other considerations for the contracts; or (4) any other transaction of insurance business; is equivalent to and shall constitute an appointment by the insurer of the insurance commissioner and the commissioner's successor or successors in office to be the insurer's true and lawful attorney, upon whom may be served all lawful process in any action, suit, or proceeding instituted by or on behalf of an insured or beneficiary arising out of the contract of insurance, and the act shall be signification of its agreement that service of process is of the same legal force and validity as personal service of process in this state upon the insurer.

SECTION 32. Sections 27-17-4, 27-17-12, 27-17-14 and 27-17-20 of the General Laws in Chapter 27-17 entitled "Reciprocal Exchanges and Interinsurers" are herby amended to read as follows:

27-17-4. Declaration filed by attorney - Requirements for admission. -- The attorney shall file with the insurance commissioner, herein referred to in this chapter as the "commissioner", a declaration verified by the oath of the attorney, or when the attorney is a corporation, by the oath of its president or oaths of its treasurer and secretary setting forth:

(1) The name of the attorney and the name or designation of the exchange under which the contracts are to be issued, which name or designation shall not be so similar to any other name or designation theretofore previously adopted by an attorney or by any insurance organization in this state so as to confuse or mislead;

(2) The kind or kinds of insurance to be effected or exchanged;

(3) A copy of the form of policy contract or agreement under or by which the insurance is to be effected or exchanged and forms of application therefor for that insurance;

(4) A certified copy of the power of attorney or other authorization of the attorney under or by which the attorney is to effect or exchange the insurance contracts;

(5) The location of the office or offices from which the contracts or agreements are to be issued;

(6) (i) That, except as to the kinds of insurance hereinafter specifically mentioned in this subdivision, applications have been made for insurance upon at least one hundred (100) separate risks, the liability to the exchange for premiums due thereon on the risks shall aggregate not less than six hundred thousand dollars ($600,000), represented by executed contracts or bona fide applications to become concurrently effective, or, in lieu thereof of this amount, the exchange or interinsurer is possessed of a surplus of not less than three hundred thousand dollars ($300,000). The minimum amount of surplus established as a requirement for the writing of other lines of insurance as specified elsewhere in this section shall be in addition to that required by the provisions of this subdivision;

(ii) In the case of employers' liability or workers' compensation insurance, applications shall have been made for indemnity upon at least one hundred (100) separate risks having a total annual premium of not less than two million five hundred thousand dollars ($2,500,000), as represented by executed contracts or bona fide applications to become concurrently effective, or, in lieu thereof of this amount, the exchange or interinsurer is possessed of a surplus of not less than one hundred thousand dollars ($100,000);

(iii) In the case of automobile insurance, applications shall have been made for insurance for at least two hundred (200) separate risks, or for insurance the premiums due the exchange thereon on the risks shall aggregate not less than two hundred thousand dollars ($200,000) represented by executed contracts or bona fide applications to become concurrently effective on any or all classes of automobile insurance effected by the subscribers through the attorney, or, in lieu thereof of this amount, the exchange or interinsurer is possessed of a surplus of not less than one hundred thousand dollars ($100,000);

(iv) The surplus as provided above in this subdivision shall not be acceptable unless invested in securities of the United States of America, the state of Rhode Island, or any other state of the United States or political subdivision thereof of the state;

(7) That there shall be maintained at the exchange, available for the payment of losses, assets conforming to the requirements of §§ 27-17-7 - 27-17-12;

(8) A financial statement under oath in the form prescribed by the commissioner;

(9) An instrument authorizing the service of process as provided for in this chapter; and

(10) A certificate from the proper official of the state where the principal office is maintained, that the subscribers and the attorney have complied with all provisions of law and are authorized in that state to transact the classes of business which are sought to be transacted in this state.

27-17-12. Deficiencies in reserves. -- If at any time the amounts on hand are less than the foregoing requirements specified in this chapter, the subscribers, or their attorney for them, shall make up the deficiency.

27-17-14. Cash premium deposit and contingent liability of subscriber. -- The power of attorney under which any contracts of insurance are exchanged pursuant to this chapter shall provide for a cash premium deposit and a contingent liability of the subscriber during each annual period of the term of each contract of insurance issued to the subscriber to be fixed in the power of attorney, but in an amount not less than one nor more than ten (10) times the amount of the annual portion of the cash premium deposit stated in the contract, except that exchanges which have a required surplus equal to three hundred fifty thousand dollars ($350,000) or to the minimum capital, if any, required of a stock insurance company transacting the same kind or kinds of business, whichever is greater, may issue policies without contingent liability; provided, however, that the exchange which shall have issued policies without contingent liability after the acquisition of the surplus may continue to do so only so long as it maintains a surplus in the above amount required by this section, and no exchange shall issue any non-assessable policies, except during a time as it shall continue to maintain the surplus.

            27-17-20. Application Applicability of insurance producers' laws. -- The provisions of the general insurance laws of this state regarding the appointment, licensing, qualification, and regulation of insurance producers shall not apply to an exchange or its attorney, or to a traveling salaried employee, or to an executive officer of or the attorney if a corporation, but shall apply to any other person, partnership, or corporation representing the reciprocal or interinsurance exchange in soliciting, negotiating, or effecting of business in this state.

            SECTION 33. Sections 27-18-3, 27-18-3.3, 27-18-25, 27-18-30, 27-18-31, 27-18-33, 27-18-33.1, 27-18-34, 27-18-35, 27-18-36, 27-18-38, 27-18-39, 27-18-40, 27-18-41, 27-18-48, 27-18-48.1, 27-18-49, 27-18-52, 27-18-52.1, 27-18-57, 27-18-58 and 27-18-59 of the General Laws in Chapter 27-18 entitled "Accident and Sickness Insurance Policies" are hereby amended to read as follows:

            27-18-3. Required provisions. -- (a) Except as provided in § 27-18-5, each policy delivered or issued for delivery to any person in this state shall contain the provisions specified in this section in the words in which the provisions appear in this section; provided, however, that the insurer may, at its option, substitute, for one or more of the provisions, corresponding provisions of different wording approved by the commissioner which are in each instance not less favorable in any respect to the insured or the beneficiary. The provisions shall be preceded individually by the caption appearing in this subsection or, at the option of the insurer, by the appropriate individual or group captions or subcaptions as the commissioner may approve:

(1) A provision as follows:

"ENTIRE CONTRACT; CHANGES: This policy, including the endorsements and the attached papers, if any, constitutes the entire contract of insurance. No change in this policy shall be valid until approved by an executive officer of the insurer and unless the approval is endorsed hereon on the policy or attached hereto to it. No agent has authority to change this policy or to waive any of its provisions."

(2) A provision as follows:

"TIME LIMIT ON CERTAIN DEFENSES: (a) After three (3) years from the date of issue of this policy no misstatements, except fraudulent misstatements, made by the applicant in the application for this policy shall be used to void the policy or to deny a claim for loss incurred or disability (as defined in the policy) commencing after the expiration of that three-year period."

(The foregoing This policy provision shall not be so construed as to affect any legal requirement for avoidance of a policy or denial of a claim during the initial three (3) year period, nor to limit the application of § 27-18-4(1), (2), (3), (4) and (5) in the event of a misstatement with respect to age or occupation or other insurance.)

(A policy which the insured has the right to continue in force subject to its terms by the timely payment of premium: (A) (i) until at least age fifty (50); or, (B) (ii) in the case of a policy issued after age forty-four (44), for at least five (5) years from its date of issue, may contain in lieu of the foregoing this provision the following provision (from which the clause in parentheses may be omitted at the insurer's option) under the caption "INCONTESTABLE":

"After this policy has been in force for a period of three (3) years during the lifetime of the insured (excluding any period during which the insured is disabled), it shall become incontestable as to the statements contained in the application.")

"(b) No claim for loss incurred or disability (as defined in the policy) commencing after three (3) years from the date of issue of this policy shall be reduced or denied on the ground that a disease or physical condition not excluded from coverage by name or specific description effective on the date of loss had existed prior to the effective date of coverage of this policy."

             (3) A provision as follows:

             "GRACE PERIOD: A grace period of ________" (insert a number not less than "seven" (7) for weekly premium policies, "ten" (10) for monthly premium policies and "thirty-one" (31) for all other policies) "days will be granted for the payment of each premium falling due after the first premium, during which grace period the policy shall continue in force."

             (A policy, which contains a cancellation provision may add, at the end of the above this provision:,

"subject to the right of the insurer to cancel in accordance with the cancellation provision hereof of this policy.")

             (A policy in which the insurer reserves the right to refuse any renewal shall have, at the beginning of the above this provision:,

             "Unless not less than ten (10) days prior to the premium due date the insurer has delivered to the insured or has mailed to his or her last address as shown by the records of the insurer written notice of its intention not to renew this policy beyond the period for which the premium has been accepted,")

             (4) A provision as follows:

             "REINSTATEMENT: If any renewal premium be is not paid within the time granted the insured for payment, a subsequent acceptance of premium by the insurer or by any agent duly authorized by the insurer to accept such this premium, without requiring in connection therewith with this an application for reinstatement, shall reinstate the policy; provided, however, that if the insurer or the agent requires an application for reinstatement and issues a conditional receipt for the premium tendered, the policy will be reinstated upon approval of the application by the insurer or, lacking approval, upon the forty-fifth(45th)day following the date of the conditional receipt unless the insurer has previously notified the insured in writing of its disapproval of the application. The reinstated policy shall cover only loss resulting from such an accidental injury as may be sustained after the date of reinstatement and loss due to such sickness as may begin more than ten (10) days after such this date. In all other respects the insured and insurer shall have the same rights thereunder under this policy as they had under the policy immediately before the due date of the defaulted premium, subject to any provisions endorsed hereon on this policy or attached hereto to it in connection with the reinstatement. Any premium accepted in connection with a reinstatement shall be applied to a period for which the premium has not been previously paid, but not to any period more than sixty (60) days prior to the date of reinstatement."

(The last sentence of the above this provision may be omitted from any policy which the

insured has the right to continue in force subject to its terms by the timely payment of premiums; (A) (i) until at least age fifty (50); or, (B) (ii) in the case of a policy issued after age forty-four (44), for at least five (5) years from its date of issue.")

             (5) A provision as follows:

             "NOTICE OF CLAIM: Written notice of claim must be given to the insurer within twenty (20) days after the occurrence or commencement of any loss covered by the policy, or as soon thereafter after this as is reasonably possible. Notice given by or on behalf of the insured or the beneficiary to the insurer at ________________________" (insert the location of such the office as the insurer may designate for the purpose), "or to any authorized agent of the insurer, with information sufficient to identify the insured, shall be deemed notice to the insurer."

             (In a policy providing a loss of time benefit which may be payable for at least two (2) years, an insurer may at its option insert the following between the first and second sentences of the above this provision:

             "Subject to the qualifications set forth below, if the insured suffers loss of time on account of disability for which indemnity may be payable for at least two (2) years, the insured shall, at least once in every six (6) months after having given notice of claim, give to the insurer notice of continuance of the disability, except in the event of legal incapacity. The period of six (6) months following any filing of proof by the insured or any payment by the insurer on account of the claim or any denial of liability in whole or in part by the insurer shall be excluded in applying this provision. Delay in the giving of notice shall not impair the insured's right to any indemnity which would otherwise have accrued during the period of six (6) months preceding the date on which the notice is actually given.")

            (6) A provision as follows:

             "CLAIM FORMS: The insurer, upon receipt of a notice of claim, will furnish to the claimant such the forms as that are usually furnished by it for filing proofs of loss. If the forms are not furnished within fifteen (15) days after the giving of notice, the claimant shall be deemed to have complied with the requirements of this policy as to proof of loss upon submitting, within the time fixed in the policy for filing proofs of loss, written proof covering the occurrence, the character, and the extent of the loss for which claim is made."

             (7) A provision as follows:

             "PROOFS OF LOSS: Written proof of loss must be furnished to the insurer at its office in the case of a claim for loss for which this policy provides any periodic payment contingent upon continuing loss within ninety (90) days after the termination of the period for which the insurer is liable and in the case of a claim for any other loss within ninety (90) days after the date of the loss. Failure to furnish proof within the time required shall not invalidate nor reduce any claim if it was not reasonably possible to give proof within such this required time, provided the proof is furnished as soon as reasonably possible and in no event, except in the absence of legal capacity, later than one year from the time proof is otherwise required."

             (8) A provision as follows:

             "TIME OF PAYMENT OF CLAIMS: Indemnities payable under this policy for any loss other than loss for which this policy provides any periodic payment will be paid immediately upon receipt of due written proof of such this loss. Subject to due written proof of loss, all accrued indemnities for loss for which this policy provides periodic payment will be paid ________________________" (insert period for payments which must not be less frequently than monthly) "and any balance remaining unpaid upon the termination of liability will be paid immediately upon receipt of due written proof."

             (9) A provision as follows:

             "PAYMENT OF CLAIMS: Indemnity for loss of life will be payable in accordance with the beneficiary designation and the provisions respecting the payment which may be prescribed herein and effective at the time of payment. If no such designation or provision is then effective, indemnity shall be payable to the estate of the insured. Any other accrued indemnities unpaid at the insured's death may, at the option of the insurer, be paid either to the beneficiary or to such the estate. All other indemnities will be payable to the insured."

            (The following provisions, or either of them these provisions, may be included with the foregoing this provision at the option of the insurer:

             "If any indemnity of this policy shall be payable to the estate of the insured, or to an insured or beneficiary who is a minor or otherwise not competent to give a valid release, the insurer may pay the indemnity, up to an amount not exceeding $____________" (insert an amount which shall not exceed one thousand dollars ($1,000)), "to any relative by blood or connection by marriage of the insured or beneficiary who is deemed by the insurer to be equitably entitled thereto to it. Any payment made by the insurer in good faith pursuant to this provision shall fully discharge the insurer to the extent of the payment." "Subject to any written direction of the insured in the application or otherwise, all or a portion of any indemnities provided by this policy on account of hospital, nursing, medical, or surgical services may, at the insurer's option and unless the insured requests otherwise in writing not later than the time of filing proofs of the loss, be paid directly to the hospital or person rendering the services; but it is not required that the service be rendered by a particular hospital or person.")

(10) A provision as follows:

"PHYSICAL EXAMINATIONS AND AUTOPSY: The insurer at its own expense shall have the right and opportunity to examine the person of the insured when and as often as it may reasonably require during the pendency of a claim hereunder and to make an autopsy in case of death where it is not forbidden by law."

(11) A provision as follows:

"LEGAL ACTIONS: No action at law or in equity shall be brought to recover on this policy prior to the expiration of sixty (60) days after written proof of loss has been furnished in accordance with the requirements of this policy. No action shall be brought after the expiration of three (3) years after the time written proof of loss is required to be furnished."

(12) A provision as follows:

"CHANGE OF BENEFICIARY: Unless the insured makes an irrevocable designation of beneficiary, the right to change of beneficiary is reserved to the insured and the consent of the beneficiary or beneficiaries shall not be requisite to surrender or assignment of this policy or to any change of beneficiary or beneficiaries, or to any other changes in this policy."

(The first clause of this provision, relating to the irrevocable designation of beneficiary, may be omitted at the insurer's option.)

(13) A provision as follows:

"'Medical services' means such those professional services and supplies rendered by or under the direction of persons duly licensed under the laws of this state to practice medicine, surgery, or podiatry as may be specified by any medical service plan. Medical service shall not be construed to include hospital services."

(b) (1) Each policy hereafter issued and/or renewed shall contain a minimum home health care benefit as outlined herein below follows:

(i) "Home health care" is defined as a medically necessary program to reduce the length of a hospital stay or to delay or eliminate an otherwise a medically necessary hospital admission;

(ii) The home health care program shall be formulated and supervised by the subscriber's physician;

(iii) TheMinimum home health care coverage shall not exceed six (6) home or office physician's visits per month, and shall not exceed three (3) nursing visits per week, home health aide visits up to twenty (20) hours per week, and the following services as needed: physical or occupational therapy as a rehabilitative service, respiratory service, speech therapy, medical social work, nutrition counseling, prescription drugs and medication, medical and surgical supplies, such as dressings, bandages, and casts, minor equipment such as commodes and walkers, laboratory testing, x-rays and E.E.G. and E.K.G. evaluations; and

(iv) Communicable diseases and/or nervous, emotional and mental illness are excluded from home health care coverage;

(2) The commissioner shall approve the wording in each policy which that in each instance shall not be less favorable in any respect to the insured or the beneficiary, as the benefits are outlined herein above in subdivision (1) of this subsection. Any accident and sickness insurance policy whose benefits are limited to income protection or the furnishing of disability income or a limited benefit health coverage are hereby excluded from this subsection. Notwithstanding the provisions of § 27-18-19(3), as amended, the minimum home health care benefit shall be included in blanket and/or group policies of accident and sickness insurance;.

(3) A "limited benefit policy," for the purposes of this section, is any accident and sickness policy that covers one or more specified risks including, but not limited to, accidental death or injury or specified disease. A policy that broadly covers accident and sickness, but which contains exclusions and limitations with respect to certain risks or services, is not a limited benefit policy;

(4) With respect to blanket and/or group policies, the provisions of this subsection shall apply only to services provided to residents of Rhode Island or employees of Rhode Island employers.

27-18-3.3. Penalties. -- In addition to any other penalty provided by law, any person, firm, or corporation who violates §§ 27-18-3.1 - 27-18-3.5, after a hearing held in accordance with the provisions of § 42-35-9 by the department of business regulation, shall be fined civilly not less than one thousand dollars ($1,000) nor more than two thousand five hundred dollars ($2,500).

27-18-25. Unfair discrimination prohibited. -- Notwithstanding any provision of any policy of insurance, certificate, or service contract issued after May 9, 1968 in this state, whenever the insurance policy, certificate, or service contract provides for reimbursement for any services which may be legally performed by any person licensed under the provisions of chapters 29, 30, 35 and 37 of title 5, reimbursement under the insurance policy, certificate, or service contract shall not be denied because of race, color, or creed, nor shall any insurer make or permit any unfair discrimination against particular individuals or persons licensed under chapters 29, 30, 35 and 37 of title 5.

27-18-30. Health insurance contracts - Infertility. -- (a) Any health insurance contract, plan, or policy delivered or issued for delivery or renewed in this state, on or after December 1, 1989, except contracts providing supplemental coverage to Medicare or other governmental programs, which includes pregnancy related benefits, shall provide coverage for medically necessary expenses of diagnosis and treatment of infertility. To the extent that a health insurance contract provides reimbursement for a test or procedure used in the diagnosis or treatment of conditions other than infertility, the tests and procedures shall not be excluded from reimbursement when provided attendant to the diagnosis and treatment of infertility; provided, that a subscriber copayment not to exceed twenty percent (20%) may be required for those programs and/or procedures the sole purpose of which is the treatment of infertility.

(b) For the purpose of this section, "infertility" shall mean means the condition of an otherwise presumably healthy married individual who is unable to conceive or produce conception during a period of one year.

(c) Notwithstanding the provisions of § 27-18-19 or any other provision to the contrary, this section shall apply to blanket or group policies of insurance.

27-18-31. Insurance coverage for services of licensed midwives. -- (a) For the purposes of this section, "licensed midwives" means any midwife licensed under § 23-13-9.

(b) Every individual or group hospital or medical expense insurance policy or individual or group hospital or medical services plan contract delivered, issued for delivery, or renewed in this state on or after January 1, 1991, shall provide coverage for the services of licensed midwives in accordance with each health insurers' respective principles and mechanisms of reimbursement credentialing and contracting if the services are within the licensed midwives' area of professional competence as defined by regulations promulgated pursuant to § 23-13-9, and are currently reimbursed when rendered by any other licensed health care provider. No insurer or hospital or medical service corporation may require supervision, signature, or referral by any other health care provider as a condition of reimbursement, except when those requirements are also applicable to other categories of health care providers. No insurer or hospital or medical service corporation or patient may be required to pay for duplicate services actually rendered by both a licensed midwife and any other health care provider. Direct payment for licensed midwives will be contingent upon services rendered in a licensed health care facility and for services rendered in accordance with rules and regulations promulgated by the department of health; provided, however, that this provision shall not prohibit payment for services pursuant to § 42-62-26 or for other services reimbursed by third party payors.

27-18-33. Drug coverage. -- No group health insurer subject to the provisions of this chapter that provides coverage for prescription drugs under a group plan master contract delivered, issued for delivery, or renewed in this state on or after July 1, 1991, may require any person covered under the contract to obtain prescription drugs from a mail order pharmacy as a condition of obtaining benefits for the drugs.

27-18-33.1. Insurance coverage for post-partum hospital stays. -- (a) Every individual or group hospital or medical services plan contract delivered, issued for delivery, as renewed in this state on or after September 1, 1996 which provides maternity benefits shall provide coverage for a forty-eight (48) hour time period in a hospital after a vaginal birth and ninety-six (96) hours after a Cesarean section for a mother and her newly born child. Any decision to shorten these minimum coverages shall be made by the attending health care provider in consultation with the mother. The decision shall be made in accordance with the standards for guidelines for perinatal care published by the American College of Obstetrics and Gynecology and the American Academy of Pediatrics. The standards shall be relative to early discharge, defined as less than forty-eight (48) hours for a vaginal delivery and ninety-six (96) for a Cesarean delivery. In the case of early discharge, post-delivery care shall include:, home visits, parent education, assistance and training in breast or bottle feeding and the performance of any necessary and appropriate clinical tests or any other tests or services consistent with the above guidelines.

(b) For the purposes of this section, "attending health care provider" shall include includes the attending obstetrician, pediatrician, family practitioner, general practitioner or certified nurse midwife attending the mother and newly born child.

(c) Any subscriber who is aggrieved by a denial of benefits to be provided under this section may appeal the denial in accordance with regulations of the department of health, which have been promulgated pursuant to chapter 17.12 of title 23. No policy or plan covered under this chapter shall terminate the services, reduce capitation payment, or otherwise penalize an attending physician or other health care provider who orders care consistent with the provisions of this section.

27-18-34. Health insurance contracts - Certified registered nurse practitioners and psychiatric and mental health nurse clinical specialists. -- (a) Every health insurance contract, plan, or policy delivered, issued for delivery, or renewed in this state may, through the period ending January 1, 1995, and thereafter, shall provide coverage for the services of a certified registered nurse practitioner and psychiatric and mental health nurse clinical specialist practicing collaboration with or in the employ of a physician licensed under chapter 37 of title 5 to subscribers, if the services are within the certified registered nurse practitioner's or psychiatric and mental health nurse clinical specialist's area of professional competence as established by education and certification, and are currently reimbursed when rendered by any other licensed health care provider. No insurer or hospital, medical service corporation, or health maintenance organization may require the signature, by any other health care provider as a condition of reimbursement. No insurer or hospital, medical service corporation, or health maintenance organization may be required to pay for duplicative services actually rendered by both a certified registered nurse practitioner and any other health care provider.

(b) Nothing in this chapter shall preclude the conducting of managed care reviews and medical necessity reviews by an insurer or hospital or medical service corporation or health maintenance organization.

27-18-35. Certified counselors in mental health and therapists in marriage and family practice. -- Every health insurance contract plan or policy delivered, issued for delivery or renewed in this state, on or after January 1, 1994, except policies which only provide coverage for specified diseases, fix indemnity, Medicare supplement long term care disability income, or other limited benefit policies, shall provide coverage for the services of counselors in mental health licensed pursuant to § 5-63.2-9 and therapists in marriage and family practice licensed pursuant to § 5-63.2-10 excluding marital and family therapy unless the individual is diagnosed with a mental disorder.

27-18-36. New cancer therapies - Under investigation. -- Every individual or group hospital or medical expense insurance policy or individual or group hospital or medical service plan contract delivered, issued for delivery or renewed in this state, on or after January 1, 1995, except policies which only provide coverage for specified diseases other than cancer, fixed indemnity, disability income, accident only, long-term care Medicare supplement limited benefit health, sickness or bodily injury or death by accident or both, or other limited benefit policies, shall provide coverage for new cancer therapies still under investigation as outlined in this chapter.

27-18-38. Diabetes treatment. -- (a) Every individual or group health insurance contract, plan, or policy delivered, issued for delivery or renewed in this state on or after January 1, 1997, which provides medical coverage that includes coverage for physician services in a physician's office, and every policy which provides major medical or similar comprehensive-type coverage, except for supplemental policies which only provide coverage for specified diseases and other supplemental policies, shall include coverage for the following equipment and supplies for the treatment of insulin treated diabetes, non-insulin treated diabetes, and gestational diabetes, if medically appropriate and prescribed by a physician: blood glucose monitors and blood glucose monitors for the legally blind, test strips for glucose monitors and/or visual reading, insulin, injection aids, cartridges for the legally blind, syringes, insulin pumps and appurtenances thereto to the pumps, insulin infusion devices, and oral agents for controlling blood sugar and therapeutic/molded shoes for the prevention of amputation.

(b) Upon the approval of new or improved diabetes equipment and supplies by the Food and Drug Administration, all policies governed by this act section shall guarantee coverage of new diabetes equipment and supplies when medically appropriate and prescribed by a physician. These policies shall also include coverage, when medically necessary, for diabetes self-management education to ensure that persons with diabetes are instructed in the self-management and treatment of their diabetes, including information on the nutritional management of diabetes. The coverage for self-management education and education relating to medical nutrition therapy shall be limited to medically necessary visits upon the diagnosis of diabetes, where a physician diagnoses a significant change in the patient's symptoms or conditions which necessitate changes in a patient's self-management, or where reeducation or refresher training is necessary. This education when medically necessary and prescribed by a physician, may be provided only by the physician or, upon his/her his or her referral to an appropriately licensed and certified health care provider and may be conducted in group settings. Coverage for self-management education and education relating to medical nutrition therapy shall also include home visits when medically necessary.

(c) Benefit plans offered by an insurer may impose copayment and/or deductibles for the benefits mandated by this chapter;, however, in no instance shall the copayment or deductible amount be greater than the copayment or deductible amount imposed for other supplies, equipment or physician office visits. Benefits for services under this act section shall be reimbursed in accordance with the respective principles and mechanisms of reimbursement for each insurer, hospital, or medical service corporation, or health maintenance organization.

27-18-39. Mastectomy treatment. -- (a) Every individual or group health insurance contract, plan, or policy delivered, issued for delivery or renewed in this state on or after January 1, 1997, which provides medical coverage that includes coverage for physician services in a physician's office, and every policy which provides major medical or similar comprehensive-type coverage excluding supplemental policies which only provide coverage for specified diseases or other supplemental policies, shall include coverage for prosthetic devices and or reconstructive surgery to restore and achieve symmetry for the patient incident to a mastectomy. Coverage for prosthetic devices and reconstructive surgery shall be subject to the deductible and coinsurance conditions applied to the mastectomy and all other terms and conditions applicable to other benefits. Any reconstructive surgery under this section must be performed within eighteen (18) months of the original mastectomy. As used in this section, "mastectomy" means the removal of all or part of the breast to treat breast cancer, tumor, or mass.

(b) Any provision in any contract issued, amended, delivered or renewed in this state on or after January 1, 1997, which is in conflict with this section shall be of no force or effect.

(b) (c) As used in this section, "prosthetic devices" means and includes the provision of initial and subsequent prosthetic devices pursuant to an order of the patient's physician or surgeon.

(c) (d) Nothing in this section shall be construed to require an individual or group policy to cover the surgical procedure known as mastectomy or to prevent application of deductible or copayment provisions contained in the policy or plan, nor shall this section be construed to require that coverage under an individual or group policy be extended to any other procedures.

(d) (e) Nothing in this section shall be construed to authorize an insured or plan member to receive the coverage required by this section if that coverage is furnished by a nonparticipating provider, unless the insured or plan member is referred to that provider by a participating physician, nurse practitioner, or certified nurse midwife providing care.

(e) Nothing in this section shall preclude the conducting of managed care reviews and medical necessity reviews, by an insurer, hospital or medical service corporation or health maintenance organization.

27-18-40. Insurance coverage for mastectomy hospital stays. -- (a) The Rhode Island General Assembly recongnizes recognizes that breast cancer is a unique illness with both a physical and emotional impact on patients. Except as otherwise provided, every individual or group hospital or medical services plan contract delivered, issued for delivery, as renewed in this state on or after September 1, 1997, shall provide coverage for a minimum forty-eight (48) hour time period in a hospital after the surgical procedures known as a mastectomy, and a minimum twenty-four (24) hours after an axilary node dissection.

(b) Provided, however, This section shall not apply to insurance coverage providing benefits for: (1) hospital confinement indemnity; (2) disablity 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. Any decision to shorten these minimum coverages shall be made by the attending physician in consultation with and upon agreement by the patient. If the patient participates in an early discharge, defined as in-patient care following a mastectomy that is less than forty-eight (48) hours and in-patient care following an axilary node dissection that is less than twenty-four (24) hours, coverage shall include a minimum of one home visit conducted by a physician or registered nurse.

(c) (b) Any subscriber who is aggrieved by a denial of benefits to be provided under this section may appeal the denial in accordance with regulations of the department of health, which have been promulgated pursuant to chapter 17.12 of title 23. No policy or plan covered under this chapter shall terminate the services, reduce capitation payment, or otherwise penalize an attending physician or other health care provider who orders care consistent with the provisions of this section.

(d) (c) Notice. All plans subject to this section shall provide notice to each enrollee:

(1) In the next mass mailing made by the plan to the employee; or

(2) As part of any informational packet sent to the enrollee.

27-18-41. Mammograms and pap smears - Coverage mandated. -- (a) Every individual or group hospital or medical expense insurance policy or individual or group hospital or medical services plan contract delivered, issued for delivery, or renewed in this state on or after January 1, 1996, shall provide coverage for mammograms and pap smears, in accordance with guidelines established by the American cancer society.

(b) 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.

27-18-48. Third party reimbursement for services of certain health care workers. -- (a) Every individual or group hospital or medical services plan contract delivered, issued or renewed by an insurer or nonprofit or for profit health service corporation on or after January 1, 1998, which provides benefits to individual subscribers and members within the state, or to all group members having a principal place of employment within the state, shall provide benefits for services rendered by a certified registered nurse anesthetist designated as a certified registered nurse anesthetist by the board of nurse registration and nursing education; provided, however, that the following conditions are met:

(1) The certified registered nurse anesthetist provides certain health care services under the supervision of anesthesiologists, licensed physicians or licensed dentists in accordance with § 5-34.2-2(c), which requires substantial specialized knowledge, judgment and skill related to the administration of anesthesia, including pre-operative and post-operative assessment of patients; administering anesthetics; monitoring patients during anesthesia; management of fluids in intravenous therapy and management of respiratory care; and

(2) The policy or contract currently provides benefits for identical services rendered by a provider of health care licensed by the state; and

(3) The certified registered nurse anesthetist is not a salaried employee of the licensed hospital or facility for which the accident and sickness insurer has an alternative contractual relationship to fund the services of a certified registered nurse anesthetist.

(b) It shall remain within the sole discretion of the health maintenance organization as to which certified registered nurse anesthetists it shall contract with. Reimbursement shall be provided according to the respective principles and policies of the health maintenance organization; provided, however, that no health maintenance organization may be required to pay for duplicative services actually rendered by a certified registered nurse anesthetist and any other health care provider. Nothing contained herein in this section shall preclude the health maintenance organization from conducting managed care, medical necessity or utilization review.

27-18-48.1. Third party reimbursement for services of registered nurse first assistants. -- (a) Every individual or group hospital or medical services plan contract delivered, issued or renewed by an insurer or nonprofit health service corporation on or after January 1, 2000, which provides benefits to individual subscribers and members within the state, or to all group members having a principal place of employment within the state, shall provide benefits for services rendered by a registered nurse first assistant designated as a registered nurse first assistant provided, however, that the following conditions are met:

(1) The registered nurse first assistant provides certain health care services under the supervision of a licensed physician; is currently licensed as a registered nurse in Rhode Island; has successfully completed a course in preparing the registered nurse as a first assistant in accordance with the Association of Operating Room Nurses core curriculum guide for the registered nurse first assistant and includes a minimum of one academic year in a college or university with didactic instruction and clinical internship programs; and is certified in perioperative nursing by the Certification Board Perioperative Nursing (minimum of two years perioperative experience);

(2) The policy or contract, currently provides benefits for identical services rendered by a provider of health care licensed by the state; and

(3) The registered nurse first assistant is not a salaried employee of the licensed hospital or facility for which the accident and sickness insurer has an alternative contractual relationship to fund the services of a registered nurse first assistant.

(b) It shall remain within the sole discretion of the accident and sicknesses insurer as to which registered nurse first assistant it shall contract with. Reimbursement shall be provided according to the respective principles and policies of the health maintenance organization; provided, however, that no accident and sicknesses insurer may be required to provide direct reimbursement, or pay for duplicative services actually rendered by a registered nurse first assistant and any other health care provider. Nothing contained herein in this section shall preclude the health maintenance organization from conducting managed care, medical necessity or utilization review.;

(c) provided, however, that 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.

27-18-49. Human leukocyte antigen testing. -- (a) Every individual or group hospital or medical services plan contract delivered or renewed in this state on or after March 19, 1998, shall include coverage of the cost for human leukocyte antigen testing, also referred to as histocompatibility locus antigen testing, for A, B, and DR antigens for utilization in bone marrow transplantation. The testing must be performed in a facility which is accredited by the American Association of Blood Banks or its successors, and is licensed under the Clinical Laboratory Improvement Act, 42 U.S.C. § 263a, as it may be from time to time amended. At the time of the testing, the person being tested must complete and sign an informed consent form which also authorizes the results of the test to be used for participation in the National Marrow Donor Program. The group hospital or medical services plan contract may limit each subscriber to one of these testings per lifetime.

(b) This section shall not apply to insurance coverage providing benefits for: (i)(1) hospital confinement indemnity; (ii)(2) disability income; (iii)(3) accident only; (iv)(4) long term care; (v)(5) Medicare supplement; (vi)(6) limited benefit health; (vii)(7) specified disease indemnity; (viii)(8) sickness or bodily injury or death by accident or both; and (ix)(9) other limited benefit policies.

27-18-52. Genetic testing. -- (a) Except as provided in chapter 37.3 of title 5, insurance administrators, health plans and providers shall be prohibited from releasing genetic information without prior written authorization of the individual. Written authorization shall be required for each disclosure and include to whom the disclosure is being made. An exception shall exist for those participating in research settings governed by the Federal Policy for the Protection of Human Research Subjects (also known as "The Common Rule"). Tests conducted purely for research are excluded from the definition, as are tests for somatic (as opposed to heritable) mutations, and testing for forensic purposes.

(b) No individual or group health insurance contract, plan, or policy delivered, issued for delivery, or renewed in this state on or after January 1, 1999, which provides health insurance medical coverage that includes coverage for physician services in a physician's office, and every policy which provides major medical or similar comprehensive-type coverage excluding disability income, long term care and insurance supplemental policies which only provide coverage for specified diseases or other supplemental policies, shall:

(1) Use a genetic test or request for genetic tests or the results of a genetic test to reject, deny, limit, cancel, refuse to renew, increase the rates of, affect the terms or conditions of, or otherwise affect a group or an individual health insurance policy, contract, or plan;

            (2) Request or require a genetic test for the purpose of determining whether or not to issue or renew an individual's health benefits coverage, to set reimbursement/co-pay levels or determine covered benefits and services;

(3) Release the results of a genetic test without the prior written authorization of the individual from whom the test was obtained, except in a format whereby individual identifiers are removed, encrypted, or encoded so that the identity of the individual is not disclosed. A recipient of information pursuant to this section may use or disclose such information solely to carry out the purpose for which the information was disclosed. Authorization shall be required for each redisclosure; an exception shall exist for participating in research settings governed by the Federal Policy for the Protection of Human Research Subjects (also known as "The Common Rule").

(4) Request or require information as to whether an individual has ever had a genetic test, or participated in genetic testing of any kind, whether for clinical or research purposes.

(c) For the purposes of this section, "genetic testing" is the analysis of an individual's DNA, RNA, chromosomes, proteins and certain metabolites in order to detect heritable disease-related genotypes, mutations, phenotypes or karyotypes for clinical purposes. Such purposes include predicting risk of disease, identifying carriers, establishing prenatal and clinical diagnosis or prognosis. Prenatal, newborn and carrier screening, as well as testing in high risk families may be included provided there is an approved release by a parent or guardian. Tests for metabolites are covered only when they are undertaken with high probability that an excess of deficiency of the metabolite indicates the presence of heritable mutations in single genes. "Genetic testing" does not mean routine physical measurement, a routine chemical, blood, or urine analysis or a test for drugs or for HIV infections.

27-18-52.1. Genetic information. -- (a) Except as provided in chapter 37.3 of title 5, insurance administrators, health plans and providers shall be prohibited from releasing genetic information without prior written authorization of the individual. Written authorization shall be required for each disclosure and include to whom the disclosure is being made. An exception shall exist for those participating in research settings governed by the Federal Policy for the Protection of Human Research Subjects (also known as "The Common Rule"). Tests conducted purely for research are excluded from the definition, as are tests for somatic (as opposed to heritable) mutations, and testing for forensic purposes.

(b) No individual or group health insurance contract, plan, or policy delivered, issued for delivery, or renewed in this state on or after January 1, 2002, which provides medical coverage that includes coverage for physician services in a physician's office, and every policy which provides major medical or similar comprehensive-type coverage excluding disability income, long term care and insurance supplemental policies which only provide coverage for specified diseases or other supplemental policies, shall:

(1) Use genetic information or request for genetic information or the results of genetic information or other genetic information to reject, deny, limit, cancel, refuse to renew, increase the rates of, affect the terms or conditions of, or otherwise affect a group or an individual's health insurance policy, contract, or plan;

(2) Request or require genetic information for the purpose of determining whether or not to issue or renew an individual's health benefits coverage, to set reimbursement/co-pay levels or determine covered benefits and services;

(3) Release the results of genetic information without the prior written authorization of an individual from whom the information was obtained, except in a format whereby individual identifiers are removed, encrypted, or encoded so that the identity of the individual is not disclosed. A recipient of information pursuant to this section may use or disclose such the information solely to carry out the purpose for which the information was disclosed. Authorization shall be required for each redisclosure. An exception shall exist for participation in research settings governed by the Federal Policy for the Protection of Human Research Subjects (also known as "The Common Rule");

(4) Request or require information as to whether an individual has genetic information, or participated in genetic information of any kind, whether for clinical or research purposes.

(c) For the purposes of this section, "genetic information" is information about genes, gene product, or inherited characteristics that may derive from the individual or a family member.

27-18-57. F.D.A. approved prescription contraceptive drugs and devices. -- (a) Every individual or group health insurance contract, plan, or policy that provides prescription coverage and is delivered, issued for delivery, or renewed in this state on or after January 1, 2001, shall provide coverage for F.D.A. approved contraceptive drugs and devices requiring a prescription. Provided, however, that nothing in this subsection shall be deemed to mandate or require coverage for the prescription drug RU 486.

(b) Notwithstanding any other provision of this section, any insurance company may issue to a religious employer an individual or group health insurance contract, plan, or policy that excludes coverage for prescription contraceptive methods which are contrary to the religious employer's bona fide religious tenets.

(c) As used in this section, "religious employer" means an employer that is a "church or a qualified church-controlled organization" as defined in 26 U.S.C. § 3121.

(d) Provided, however, that This section does 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 diseased indemnity; (8) sickness of bodily injury or death by accident or both; and (9) other limited benefit policies.

(e) very religious employer that invokes the exemption provided under this section shall provide written notice to prospective enrollees prior to enrollment with the plan, listing the contraceptive health care services the employer refuses to cover for religious reasons.

27-18-58. Prostate and colorectal examinations - Coverage mandated. -- Every individual or group hospital or medical expense insurance policy or individual or group hospital or medical services plan contract delivered, issued for delivery, or renewed in this state on or after December 31, 2000, shall provide coverage for prostate and colorectal examinations and laboratory tests for cancer for any nonsymptomatic person covered under that policy or contract, in accordance with the current American Cancer Society guidelines. Provided, however, this section does 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) specific disease indemnity; (8) sickness or bodiy bodily injury or death by accident or both; and (9) other limited benefit policies.

27-18-59. Termination of children's benefits. -- (a) Every individual or group health insurance contract, plan, or policy delivered, issued for delivery, or renewed in this state on or after January 1, 2001, which provides medical coverage that includes coverage for physician services in a physician's office, and every policy which provides major medical or similar comprehensive type coverage, except for supplemental policies which only provide coverage for specified diseases and other supplemental policies, shall include a provision that policyholders shall receive no less than thirty (30) days notice from the accident and sickness insurer that a child covered as a dependent by the policy holder is about to lose his or her coverage as a result of reaching the maximum age for a dependent child, and that the child will only continue to be covered upon documentation being provided of current college enrollment or that the child may purchase a conversion policy if he or she is not a college student. Nothing in this section prohibits an accident and sickness insurer from requiring a policyholder to annually provide proof of a child's current college enrollment in order to maintain the child's coverage. Provided further, nothing in this section requires coverage inconsistent with the membership criteria in effect under the policyholder's health benefits coverage.

(b) Provided, however, that This section does 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 diseased indemnity; or (8) other limited benefit policies.

SECTION 34. Section 27-18.1-3 of the General Laws in Chapter 27-18.2 entitled "Compliance of Health Benefit Contracts and Medical Assistance Program with Federal Law" is hereby amended to read as follows:

27-18.1-3. Exclusions and limitations prohibited. -- No insurance company, health maintenance organization, or nonprofit corporation may issue, deliver, or renew any contract providing a health benefit or benefits on or after October 1, 1979 which contains any provisions excluding or limiting its benefits on account of eligibility for or payment of benefits under 42 U.S.C. § 1396 et seq.; provided, however, that the application of this section shall not increase the personal liability to health care providers of a medical assistance recipient of health services, as those services are defined in § 42-62-4.

SECTION 35. Section 27-18-22 of the General Laws in Chapter 27-18 entitled "Accident and Sickness Insurance Policies" is hereby amended to read as follows:

27-18-22. Effect on other law. -- Nothing in this chapter shall be construed to repeal the provisions of chapter 13 13.1 of this title.

SECTION 36. Sections 27-18.6-1, 27-18.6-3, and 27-18.6-7 of the General Laws in Chapter 27-18.6 entitled "Large Group Health Insurance Coverage" are hereby amended to read as follows:

27-18.6-1. Purpose. -- The purpose of this chapter is to insure compliance of all policies, contracts, certificates, and agreements of group health insurance coverage offered or delivered in this state with the Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191).

 

27-18.6-3. Limitation on preexisting condition exclusion. -- (a) (1) Notwithstanding any of the provisions of this title to the contrary, a group health plan and a health insurance carrier offering group health insurance coverage shall not deny, exclude, or limit benefits with respect to a participant or beneficiary because of a preexisting condition exclusion except if:

(i) The exclusion relates to a condition (whether physical or mental), regardless of the cause of the condition, for which medical advice, diagnosis, care, or treatment was recommended or received within the six (6) month period ending on the enrollment date;

(ii) The exclusion extends for a period of not more than twelve (12) months (or eighteen (18) months in the case of a late enrollee) after the enrollment date; and

(iii) The period of the preexisting condition exclusion is reduced by the aggregate of the periods of creditable coverage, if any, applicable to the participant or the beneficiary as of the enrollment date.

(2) For purposes of this section, genetic information shall not be treated as a preexisting condition in the absence of a diagnosis of the condition related to that information.

(b) With respect to subsection paragraph (a)(1)(iii) of this section, a period of creditable coverage shall not be counted, with respect to enrollment of an individual under a group health plan, if, after that period and before the enrollment date, there was a sixty-three (63) day period during which the individual was not covered under any creditable coverage.

(c) Any period that an individual is in a waiting period for any coverage under a group health plan or for group health insurance or is in an affiliation period shall not be taken into account in determining the continuous period under subsection (b) of this section.

(d) Except as otherwise provided in subsection (e) of this section, for purposes of applying subsection paragraph (a)(1)(iii) of this section, a group health plan and a health insurance carrier offering group health insurance coverage shall count a period of creditable coverage without regard to the specific benefits covered during the period.

(e) (1) A group health plan or a health insurance carrier offering group health insurance may elect to apply subsection paragraph (a)(1)(iii) of this section based on coverage of benefits within each of several classes or categories of benefits. Those classes or categories of benefits are to be determined by the secretary of the United States Department of Health and Human Services pursuant to regulation. The election shall be made on a uniform basis for all participants and beneficiaries. Under the election, a group health plan or carrier shall count a period of creditable coverage with respect to any class or category of benefits if any level of benefits is covered within the class or category.

(2) In the case of an election under this subsection with respect to a group health plan (whether or not health insurance coverage is provided in connection with that plan), the plan shall:

(i) Prominently state in any disclosure statements concerning the plan, and state to each enrollee under the plan, that the plan has made the election; and

(ii) Include in the statements a description of the effect of this election.

(3) In the case of an election under this subsection with respect to health insurance coverage offered by a carrier in the large group market, the carrier shall:

(i) Prominently state in any disclosure statements concerning the coverage, and to each employer at the time of the offer or sale of the coverage, that the carrier has made the election; and

(ii) Include in the statements a description of the effect of the election.

(f) (1) A group health plan and a health insurance carrier offering group health insurance coverage may not impose any preexisting condition exclusion in the case of an individual who, as of the last day of the thirty (30) day period beginning with the date of birth, is covered under creditable coverage.

(2) Subdivision (1) of this subsection shall no longer apply to an individual after the end of the first sixty-three (63) day period during all of which the individual was not covered under any creditable coverage. Moreover, any period that an individual is in a waiting period for any coverage under a group health plan (or for group health insurance coverage) or is in an affiliation period shall not be taken into account in determining the continuous period for purposes of determining creditable coverage.

(g) (1) A group health plan and a health insurance carrier offering group health insurance coverage may not impose any preexisting condition exclusion in the case of a child who is adopted or placed for adoption before attaining eighteen (18) years of age and who, as of the last day of the thirty (30) day period beginning on the date of the adoption or placement for adoption, is covered under creditable coverage. The previous sentence does not apply to coverage before the date of the adoption or placement for adoption.

(2) Subdivision (1) of this subsection shall no longer apply to an individual after the end of the first sixty-three (63) day period during all of which the individual was not covered under any creditable coverage. Moreover, any period that an individual is in a waiting period for any coverage under a group health plan (or for group health insurance coverage) or is in an affiliation period shall not be taken into account in determining the continuous period for purposes of determining creditable coverage.

(h) A group health plan and a health insurance carrier offering group health insurance coverage may not impose any preexisting condition exclusion relating to pregnancy as a preexisting condition.

(i) (1) Periods of creditable coverage with respect to an individual shall be established through presentation of certifications. A group health plan and a health insurance carrier offering group health insurance coverage shall provide certifications:

(i) At the time an individual ceases to be covered under the plan or otherwise becomes covered under a COBRA continuation provision;

(ii) In the case of an individual becoming covered under a continuation provision, at the time the individual ceases to be covered under that provision; and

(iii) On the request of an individual made not later than twenty-four (24) months after the date of cessation of the coverage described in subparagraph paragraph (i) or (ii) of this subdivision, whichever is later.

(2) The certification under this subsection may be provided, to the extent practicable, at a time consistent with notices required under any applicable COBRA continuation provision.

(3) The certification described in this subsection is a written certification of:

(i) The period of creditable coverage of the individual under the plan and the coverage (if any) under the COBRA continuation provision; and

(ii) The waiting period (if any) (and affiliation period, if applicable) imposed with respect to the individual for any coverage under the plan.

(4) To the extent that medical care under a group health plan consists of group health insurance coverage, the plan is deemed to have satisfied the certification requirement under this subsection if the health insurance carrier offering the coverage provides for the certification in accordance with this subsection.

(5) In the case of an election taken pursuant to subsection (e) of this section by a group health plan or a health insurance carrier, if the plan or carrier enrolls an individual for coverage under the plan and the individual provides a certification of creditable coverage, upon request of the plan or carrier, the entity which issued the certification shall promptly disclose to the requisition plan or carrier information on coverage of classes and categories of health benefits available under that entity's plan or coverage, and the entity may charge the requesting plan or carrier for the reasonable cost of disclosing the information.

(6) Failure of an entity to provide information under this subsection with respect to previous coverage of an individual so as to adversely affect any subsequent coverage of the individual under another group health plan or health insurance coverage, as determined in accordance with rules and regulations established by the secretary of the United States Department of Health and Human Services, is a violation of this chapter.

(j) A group health plan and a health insurance carrier offering group health insurance coverage in connection with a group health plan shall permit an employee who is eligible, but not enrolled, for coverage under the terms of the plan (or a dependent of an employee if the dependent is eligible, but not enrolled, for coverage under the terms) to enroll for coverage under the terms of the plan if each of the following conditions are met:

(1) The employee or dependent was covered under a group health plan or had health insurance coverage at the time coverage was previously offered to the employee or dependent;

(2) The employee stated in writing at the time that coverage under a group health plan or health insurance coverage was the reason for declining enrollment, but only if the plan sponsor or carrier (if applicable) required a statement at the time and provided the employee with notice of that requirement (and the consequences of the requirement) at the time;

(3) The employee's or dependent's coverage described in subsection (j)(1):

(i) Was under a COBRA continuation provision and the coverage under that provision was exhausted; or

(ii) Was not under a continuation provision and either the coverage was terminated as a result of loss of eligibility for the coverage (including as a result of legal separation, divorce, death, termination of employment, or reduction in the number of hours of employment) or employer contributions towards the coverage were terminated; and

(4) Under the terms of the plan, the employee requests enrollment not later than thirty (30) days after the date of exhaustion of coverage described in subparagraph paragraph (3)(i) of this subsection or termination of coverage or employer contribution described in subparagraph paragraph (3)(ii) of this subsection.

(k) (1) If a group health plan makes coverage available with respect to a dependent of an individual, the individual is a participant under the plan (or has met any waiting period applicable to becoming a participant under the plan and is eligible to be enrolled under the plan but for a failure to enroll during a previous enrollment period), and a person becomes a dependent of the individual through marriage, birth, or adoption or placement through adoption, the group health plan shall provide for a dependent special enrollment period during which the person (or, if not otherwise enrolled, the individual) may be enrolled under the plan as a dependent of the individual, and in the case of the birth or adoption of a child, the spouse of the individual may be enrolled as a dependent of the individual if the spouse is otherwise eligible for coverage.

(2) A dependent special enrollment period shall be a period of not less than thirty (30) days and shall begin on the later of:

(i) The date dependent coverage is made available; or

(ii) The date of the marriage, birth, or adoption or placement for adoption (as the case may be).

(3) If an individual seeks to enroll a dependent during the first thirty (30) days of a dependent special enrollment period, the coverage of the dependent shall become effective:

(i) In the case of marriage, not later than the first day of the first month beginning after the date the completed request for enrollment is received;

(ii) In the case of a dependent's birth, as of the date of the birth; or

(iii) In the case of a dependent's adoption or placement for adoption, the date of the adoption or placement for adoption.

(l) (1) A health maintenance organization which offers health insurance coverage in connection with a group health plan and which does not impose any preexisting condition exclusion allowed under subsection (a) of this section with respect to any particular coverage option may impose an affiliation period for the coverage option, but only if that period is applied uniformly without regard to any health status-related factors, and the period does not exceed two (2) months (or three (3) months in the case of a late enrollee).

(2) For the purposes of this subsection, an affiliation shall begin on the enrollment date.

(3) An affiliation period under a plan shall run concurrently with any waiting period under the plan.

(4) The director may approve alternative methods from those described under this subsection to address adverse selection.

(m) For the purpose of determining creditable coverage pursuant to this chapter, no period before July 1, 1996, shall be taken into account. However, individuals who need to establish creditable coverage for periods before July 1, 1996, and who would have the coverage credited but for the prohibition in the preceding sentence may be given credit for creditable coverage for those periods through the presentation of documents or other means in accordance with any rule or regulation that may be established by the secretary of the United States Department of Health and Human Services.

(n) (1) Subject to subsection (m), subsection (i) applies to events occurring after June 30, 1996. In no case shall a certification required under subsection (i) of this section be required to be provided before June 1, 1997.

(2) In the case of an event occurring after June 30, 1996, and before October 1, 1996, a certification is not required to be provided under subsection (i) unless an individual (with respect to whom the certification is otherwise required to be made) requests the certification in writing.

(3) In the case of an individual who seeks to establish creditable coverage for any period for which certification is not required because is it relates to an event occurring before June 30, 1996, the individual may present other credible evidence of coverage in order to establish the period of creditable coverage. The group health plan and a health insurance carrier shall not be subject to any penalty or enforcement action with respect to the plan's or carrier's crediting (or not crediting) the coverage if the plan or carrier has sought to comply in good faith with the applicable requirements of this section.

            27-18.6-7. Collective bargaining agreements. -- (a) Notwithstanding anything contained in this chapter to the contrary, except as provided in § 27-18.6-3(n), in the case of a group health plan maintained pursuant to one or more collective bargaining agreements between employee representatives and one or more employers ratified before the date of the enactment of this chapter [July 13, 2000,], this chapter does not apply to plan years beginning before the later of:

(1) The date on which the last of the collective bargaining agreements relating to the plan terminates (determined without regard to any extension of the collective bargaining agreement agreed to after the date of the enactment of this chapter [July 13, 2000);]); or

(2) July 1, 1997.

(b) For purposes of subdivision (a)(1) of this section, any plan amendment made pursuant to a collective bargaining agreement relating to the plan which amends the plan solely to conform to any requirement of this chapter shall not be treated as a termination of the collective bargaining agreement.

 

SECTION 37. Sections 27-19-9, 27-19-23, 27-19-23.1, 27-19-26, 27-19-27, 27-19-32, 27-19-34, 27-19-34.1, 27-19-35, 27-19-40, 27-19-40.1, 27-19-41, 27-19-44.1, 27-19-48, and 27-19-50 of the General Laws in Chapter 27-19 entitled "Nonprofit Hospital Service Corporations" are hereby amended to read as follows:

 

27-19-9. Examination of affairs of corporations. -- It is the duty of the insurance commissioner to make an examination of the financial condition and methods of doing business of every nonprofit hospital service corporation. The examination shall be performed, and the associated costs borne by the company, in accordance with all of the provisions of § 27-13-1 chapter 13.1 of this title.

 

27-19-23. Coverage for infertility. -- (a) Any nonprofit hospital service contract, plan, or insurance policies here and after delivered, issued for delivery, or renewed in this state, on or after December 1, 1989, except contracts providing supplemental coverage to Medicare or other governmental programs, which includes pregnancy related benefits shall provide coverage for medically necessary expenses of diagnosis and treatment of infertility. To the extent that a nonprofit hospital service corporation provides reimbursement for a test or procedure used in the diagnosis or treatment of conditions other than infertility, those tests and procedures shall not be excluded from reimbursement when provided attendant to the diagnosis and treatment of infertility; provided, that a subscriber copayment, not to exceed twenty percent (20%), may be required for those programs and/or procedures the sole purpose of which is the treatment of infertility.

(b) For the purposes of this section, "infertility" shall mean means the condition of an otherwise presumably healthy married individual who is unable to conceive or produce conception during a period of one year.

 

27-19-23.1. Insurance coverage for post-partum hospital stays. -- (a) Every individual or group hospital or medical services plan contract delivered, issued for delivery, as renewed in this state on or after September 1, 1996, shall provide coverage for a forty-eight (48) hour time period in a hospital after a vaginal birth and ninety-six (96) hours for a Cesarean section for a mother and her newly born child. Any decision to shorten these minimum coverages shall be made by the attending health care provider in consultation with the mother. The decision shall be made in accordance with the standards for guidelines for perinatal care published by the American College of Obstetrics and Gynecology and the American Academy of Pediatrics. The standards shall be relative to early discharge, defined as less than forty-eight (48) hours for a vaginal delivery and ninety-six (96) for a cesarean delivery. In the case of early discharge, post-delivery care shall include home visits, parent education, assistance and training in breast or bottle feeding and the performance of any necessary and appropriate clinical tests or any other tests or services consistent with the above guidelines.

(b) For the purposes of this section, "attending health care provider" shall include includes the attending obstetrician, pediatrician, family practioner, general practitioner, or certified nurse midwife attending the mother and newly born child.

(c) Any subscriber who is aggrieved by a denial of benefits to be provided under this section may appeal the denial in accordance with regulations of the department of health, which have been promulaged promulgated pursuant to chapter 17.12 of title 23. No policy or plan covered under this chapter shall terminate the services, reduce capitation payment, or otherwise penalize an attending physician or other health care provider who orders care consistent with the provisions of this section.

 

27-19-26. Drug coverage. -- No group health insurer subject to the provisions of this chapter that provides coverage for prescription drugs under a group plan master contract delivered, issued for delivery, or renewed in this state on or after July 1, 1991, may require any person covered under the contract to obtain prescription drugs from a mail order pharmacy as a condition of obtaining benefits for the drugs.

27-19-27. Certified registered nurse practitioners and psychiatric and mental health nurse clinical specialists. -- (a) Every individual or group hospital or medical expense insurance policy or individual or group hospital or medical service plan contract delivered, issued for delivery, or renewed in this state may through the period ending January 1, 1995, and thereafter shall provide coverage for the services of the certified registered nurse practitioner and psychiatric and mental health nurse clinical specialist practicing in collaboration with or in the employ if a physician licensed under chapter 37 of title 5 to subscribers, if the services are within the certified registered nurse practitioner's or psychiatric and mental health nurse clinical specialist's area of professional competence as established by education and certification, and are currently reimbursed when rendered by any other licensed health care provider. No insurer or hospital or medical service corporation may require signature by any other health care provider as a condition of reimbursement. No insurer or hospital or medical service corporation may be required to pay for duplicative services actually rendered by both a certified nurse practitioner and any other health care provider.

(b) Nothing in this chapter shall preclude the conducting of managed care reviews and medical necessity reviews by an insurer or hospital or medical service corporation or health maintenance organization.

27-19-32. New cancer therapies - Under investigation. -- Every individual or group hospital or medical expense insurance policy or individual or group hospital or medical service plan contract delivered, issued for delivery or renewed in this state on or after January 1, 1995, shall provide coverage for new cancer therapies still under investigation as outlined in this chapter.

27-19-34. Mastectomy treatment. -- (a) Every individual or group health insurance contract, plan, or policy delivered, issued for delivery or renewed in this state on or after January 1, 1997, which provides medical coverage that includes coverage for physician services in a physician's office, and every policy which provides major medical or similar comprehensive-type coverage, shall include coverage for prosthetic devices and/or reconstructive surgery to restore and achieve symmetry for the patient incident to a mastectomy. Coverage for prosthetic devices and reconstructive surgery shall be subject to the deductible and coinsurance conditions applied to the mastectomy and all other terms and conditions applicable to other benefits. Any reconstructive surgery under this section must be performed within eighteen (18) months of the original mastectomy. As used in this section, "mastectomy" means the removal of all or part of the breast to treat a breast cancer, tumor, or mass.

(b) Any provision in any contract issued, amended, delivered or renewed in this state on or after January 1, 1997, which is in conflict with this section shall be of no force or effect.

            (c) As used in this section, "prosthetic devices" means and includes the provisions of initial and subsequent prosthetic devices pursuant to an order of the patient's physician or surgeon.

(d) Nothing in this section shall be construed to require an individual or group policy to cover the surgical procedure known as mastectomy or to prevent the application of deductible or copayment provisions contained in the policy or plan, nor shall this section be construed to require that coverage under an individual or group policy be extended to any other procedures.

(e) Nothing in this section shall be construed to authorize an insured or plan member to receive the coverage required by this section if that coverage is furnished by a nonparticipating provider, unless the insured or plan member is referred to that provider by a participating physician, nurse practitioner, or certified nurse midwife providing care.

            (f) Nothing in this section shall preclude the conducting of managed care reviews and medical necessity reviews, by an insurer, hospital or medical service corporation or health maintenance organization.

27-19-34.1. Insurance coverage for mastectomy hospital stays. -- (a) The Rhode Island General Assembly recongnizes recognizes that breast cancer is a unique illness with both a physical and emotional impact on patients. Every individual or group hospital or medical services plan contract delivered, issued for delivery, as renewed in this state on or after September 1, 1997, shall provide coverage for a minimum forty-eight (48) hour time period in a hospital after the surgical procedures known as a mastectomy, and a minimum twenty-four (24) hours after an axilary node dissection. Any decision to shorten these minimum coverages shall be made by the attending physician in consultation with and upon agreement by the patient. If the patient participates in an early discharge, defined as in-patient care following a mastectomy that is less than forty-eight (48) hours and in-patient care following an axilary node dissection that is less than twenty-four (24) hours, coverage shall include a minimum of one home visit conducted by a physician or registered nurse.

(b) Any subscriber who is aggrieved by a denial of benefits to be provided under this section may appeal the denial in accordance with regulations of the department of health, which have been promulgated pursuant to chapter 17.12 of title 23. No policy or plan covered under this chapter shall terminate the services, reduce capitation payment, or otherwise penalize an attending physician or other health care provider who orders care consistent with the provisions of this section.

(c) Notice. All plans subject to this section shall provide notice to each enrollee:

(1) In the next mass mailing made by the plan to the employee; or

(2) As part of any informational packet sent to the enrollee.

27-19-35. Diabetes treatment. -- (a) Every individual or group health insurance contract, plan, or policy delivered, issued for delivery or renewed in this state on or after January 1, 1997, which provides medical coverage that includes coverage for physician services in a physician's office, and every policy which provides major medical or similar comprehensive-type coverage, shall include coverage for the following equipment and supplies for the treatment of insulin treated diabetes, non-insulin treated diabetes, and gestational diabetes when medically appropriate and prescribed by a physician: blood glucose monitors and blood glucose monitors for the legally blind, test strips for glucose monitors and/or visual reading, insulin, injection aids, cartridges for the legally blind, syringes, insulin pumps and appurtenances thereto to the pumps, insulin infusion devices, and oral agents for controlling blood sugar and therapeutic/molded shoes for the prevention of amputation. Upon the approval of new or improved diabetes equipment and supplies by the Food and Drug Administration, all policies governed by this chapter shall guarantee coverage of new diabetes equipment and supplies when medically appropriate and prescribed by a physician. The policies shall also include coverage, when medically nessary necessary, for diabetes self-management education to ensure that persons with diabetes are instructed in the self-management and treatment of their diabetes, including information on the nutritional management of diabetes. The coverage for self-management education and education relating to medical nutrition therapy shall be limited to medically necessary visits upon the diagnoses of diabetes, where a physician diagnosis a significant change in the patient's symptoms or conditions which necessitate changes in a patient's self-management, or where reeducation or refresher training is necessary. This education, when medically necessary and prescribed by a physician, may be provided only by the physican physician or, upon his/her his or her referral to by an appropriately licensed and certified health care provider and may be conducted in group settings. Coverage for self-management education and education relating to medical nutrition therapy shall also include home visits when medically necessary.

(b) Benefit plans offered by a hospital service corporation may impose copayment and/or deductibles for the benefits mandated by this chapter, however, in no instance shall the copayment or deductible amount be greater than the copayment or deductible amount imposed for other supplies, equipment, or physician office visits. Benefits for services under this chapter shall be reimbursed in accordance with the respective principles and mechanisms of reimbursement for each insurer, hospital, or medical service corporation, or health maintenance organization.

27-19-40. Third party reimbursement for services of certain health care workers. -- (a) Every individual or group health insurance contract, plan or policy delivered, issued or renewed by an insurer or nonprofit or for profit health service corporation on or after January 1, 1998, which provides benefits to individual subscribers and members within the state, or to all group members having a principal place of employment within the state, shall provide benefits for services rendered by a certified registered nurse anesthetist designated as a certified registered nurse anesthetist by the board of nurse registration and nursing education; provided, however, that the following conditions are met:

(1) The certified registered nurse anesthetist provides certain health care services under the supervision of anesthesiologists, licensed physicians or licensed dentists in accordance with § 5-34.2-2(c), which requires substantial specialized knowledge, judgment and skill related to the administration of anesthesia, including pre-operative and post-operative assessment of patients; administering anesthetics, monitoring patients during anesthesia; management of fluids in intravenous therapy and management of respiratory care; and

(2) The policy or contract currently provides benefits for identical services rendered by a provider of health care licensed by the state; and

(3) The certified registered nurse anesthetist is not a salaried employee of the licensed hospital or facility for which the nonprofit hospital service corporation has an alternative contractual relationship to fund the services of a certified registered nurse anesthetist.

(b) It shall remain within the sole discretion of the nonprofit hospital service corporation as to which certified registered nurse anesthetists it shall contract with. Reimbursement shall be provided according to the respective principles and policies of the nonprofit hospital service corporation; provided, however, that no nonprofit hospital service corporation may be required to pay for duplicative services actually rendered by a certified registered nurse anesthetist and any other health care provider. Nothing contained herein in this section shall preclude the nonprofit hospital service corporation from conducting managed care, medical necessity or utilizaton utilization review.

27-19-40.1. Third party reimbursement for services of registered nurse first assistants. -- (a) Every individual or group health insurance contract, plan or policy delivered, issued or renewed by an insurer or nonprofit or for profit health service corporation on or after January 1, 2000, which provides benefits to individual subscribers and members within the state, or to all group members having a principal place of employment within the state, shall provide benefits for services rendered by a registered nurse first assistant designated as a registered nurse first assistant provided, however, that the following conditions are met:

(1) The registered nurse first assistant provides certain health care services under the supervision of a licensed physician; is currently licensed as a registered nurse in Rhode Island; has successfully completed a course in preparing the registered nurse as a first assistant in accordance with the Association of Operating Room Nurses core curriculum guide for the registered nurse first assistant and includes a minimum of one academic year in a college or university with didactic instruction and clinical internship programs; and is certified in perioperative nursing by the Certification Board Perioperative Nursing (minimum of two (2) years perioperative experience);

(2) The policy or contract currently provides benefits for identical services rendered by a provider of health care licensed by the state; and

(3) The registered nurse first assistant is not a salaried employee of the licensed hospital or facility for which the nonprofit hospital service corporation has an alternative contractual relationship to fund the services of a registered nurse first assistant.

(b) It shall remain within the sole discretion of the nonprofit hospital service corporation as to which registered nurse first assistant it shall contract with. Reimbursement shall be provided according to the respective principles and policies of the nonprofit hospital service corporation; provided, however, that no nonprofit hospital service corporation may be required to provide direct reimbursement, or pay for duplicative services actually rendered by a registered nurse first assistant in surgery and any other health care provider. Nothing contained in this section precludes the nonprofit hospital service corporations from conducting managed care, medical necessity or utilization review.

27-19-41. Human leukocyte antigen testing. -- Every individual or group hospital or medical services plan contract delivered or renewed in this state on or after March 19, 1998, shall include coverage of the cost for human leukocyte antigen testing, also referred to as histocompatibility locus antigen testing, for A, B and DR antigens for utilization in bone marrow transplantation. The testing must be performed in a facility which that is accredited by the American Association of Blood Banks or its successors, and is licensed under the Clinical Laboratory Improvement Act, 42 U.S.C. § 263a, as it may be from time to time amended. At the time of the testing, the person being tested must complete and sign an informed consent form which that also authorizes the results of the test to be used for participation in the National Marrow Donor Program. The group hospital or medical services plan contract may limit each subscriber to one of these testings per lifetime.

27-19-44.1. Genetic information. -- (a) Except as provided in chapter 37.3 of title 5, insurance administrators, health plans and providers shall be prohibited from releasing genetic information without prior written authorization of the individual. Written authorization shall be required for each disclosure and include to whom the disclosure is being made. An exception shall exist for those participating in research settings governed by the federal policy for the protection of human research subjects (also known as "The Common Rule"). Tests conducted purely for research are excluded from the definition, as are tests for somatic (as opposed to heritable) mutations, and testing for forensic purposes.

(b) No individual or group health insurance contract, plan, or policy delivered, issued for delivery, or renewed in this state on or after January 1, 2002, which provides medical coverage that includes coverage for physician services in a physician's office, and every policy which provides major medical or similar comprehensive-type coverage excluding disability income, long term care and insurance supplemental policies which only provide coverage for specified diseases or other supplemental policies, shall:

(1) Use genetic information or request for genetic information or the results of genetic information or other genetic information to reject, deny, limit, cancel, refuse to renew, increase the rates of, affect the terms or conditions of, or otherwise affect a group or an individual's health insurance policy, contract, or plan;

            (2) Request or require genetic information for the purpose of determining whether or not to issue or renew an individual's health benefits coverage, to set reimbursement/co-pay levels or determine covered benefits and services;

(3) Release the results of genetic information without the prior written authorization of the individual from whom the information was obtained, except in a format whereby by which individual identifiers are removed, encrypted, or encoded so that the identity of the individual is not disclosed. A recipient of information pursuant to this section may use or disclose such the information solely to carry out the purpose for which the information was disclosed. Authorization shall be required for each redisclosure. An exception shall exist for participation in research settings governed by the federal policy for the protection of human research subjects (also known as "The Common Rule");

(4) Request or require information as to whether an individual has genetic information, or participated in genetic information of any kind, whether for clinical or research purposes.

(c) For the purposes of this section, "genetic information" is information about genes, gene product, or inherited characteristics that may derive from the individual or a family member.

27-19-48. F.D.A. approved prescription contraceptive drugs and devices. -- (a) Every individual or group health insurance contract, plan, or policy that provides prescription coverage and is delivered, issued for delivery, or renewed in this state on or after January 1, 2001, shall provide coverage for F.D.A. approved contraceptive drugs and devices requiring a prescription. Provided, however, that nothing in this subsection shall be deemed to mandate or require coverage for the prescription drug RU 486.

(b) Notwithstanding any other provision of this section, any hospital service corporation may issue to a religious employer an individual or group health insurance contract, plan, or policy that excludes coverage for prescription contraceptive methods which are contrary to the religious employer's bona fide religious tenets.

(c) As used in this section, "religious employer" means an employer that is a "church or a qualified church-controlled organization" as defined in 26 U.S.C. § 3121.

(d) Every religious employer that invokes the exemption provided under this section shall provide written notice to prospective enrollees prior to enrollment with the plan, listing the contraceptive health care services the employer refuses to cover for religious reasons.

27-19-50. Termination of children's benefits. -- (a) Every individual or group health insurance contract, plan, or policy delivered, issued for delivery, or renewed in this state on or after January 1, 2001, which provides medical coverage that includes coverage for physician services in a physician's office, and every policy which provides major medical or similar comprehensive type coverage, except for supplemental policies which only provide coverage for specified diseases and other supplemental policies, shall include a provision that policyholders shall receive no less than thirty (30) days notice from the nonprofit hospital service corporation that a child covered as a dependent by the policyholder is about to lose his or her coverage as a result of reaching the maximum age for a dependent child and that the child will only continue to be covered upon documentation being provided of current college enrollment, or that the child may purchase a conversion policy if he or she is not a college student.

(b) Nothing in this section prohibits a nonprofit hospital service corporation from requiring a policyholder to annually provide proof of a child's current college enrollment in order to maintain the child's coverage. Provided further, nothing in this section requires coverage inconsistent with the membership criteria in effect under the policyholder's health benefits coverage.

 

SECTION 38. Section 27-19-45 of the General Laws in Chapter 27-19 entitled "Nonprofit Hospital Service Corporations" is hereby repealed in its entirety.

            27-19-45. Conditions of coverage for new cancer therapies. -- As provided in § 27-19-32, coverage is extended to new cancer therapies still under investigation when the following circumstances are present:

(1) (a) Treatment is being provided pursuant to a phase II, III or IV clinical trial which has been approved by the National Institutes of Health (NIH) in cooperation with the National Cancer Institute (NCI), community clinical oncology programs; the Food and Drug Administration in the form of an investigational new drug (IND) exemption; the Department of Veterans' Affairs; or a qualified nongovernmental research entity as identified in the guidelines for NCI cancer center support grants;

(2) (b) The proposed therapy has been reviewed and approved by a qualified institutional review board (IRB);

(3) (c) The facility and personnel providing the treatment are capable of doing so by virtue of their experience, training, and volume of patients treated to maintain expertise;

(4) (d) The patients receiving the investigational treatment meet all protocol requirements;

(5) (e) There is no clearly superior, noninvestigational alternative to the protocol treatment;

(6) (f) The available clinical or preclinical data provide a reasonable expectation that the protocol treatment will be at least as efficacious as the noninvestigational alternative; and

(7) (g) The coverage of new cancer therapy treatment provided pursuant to a phase II clinical trial is not required for that portion of that treatment that is provided as part of the phase II clinical trial and is otherwise funded by a national agency, such as the National Cancer Institute, the Veteran's Administration, the Department of Defense, or funded by commercial organizations such as the biotechnical and/or pharmaceutical industry or manufacturers of medical devices. Any portions of a phase II trial which are customarily funded by government, biotechnical and/or pharmaceutical and/or medical device industry sources in Rhode Island or in other states shall continue to be funded in Rhode Island and coverage pursuant to this section supplements, does not supplant customary funding.

SECTION 39. Sections 27-20-5, 27-20-17.1, 27-20-20, 27-20-23, 27-20-29, 27-20-29.1, 27-20-30, 27-20-35, 27-20-35.1, 27-20-36, 27-20-39.1, 27-20-43, and 27-20-45 of the General Laws in Chapter 27-20 entitled "Nonprofit Medical Service Corporations" are hereby amended to read as follows:

            27-20-5. Contracts with subscribers. -- Each nonprofit medical service corporation may contract with its subscribers for any medical service as may be from time to time provided under any nonprofit medical service plan adopted by the corporation; provided, that:

(1) If any medical service as may be provided for from time to time shall include service which may be lawfully performed or rendered by a podiatrist, the contract shall provide for the payment for the service so performed or rendered by a podiatrist;

(2) provided further, that If any medical service as may be provided for from time to time shall include service which may be lawfully performed or rendered by a certified registered nurse practitioner or psychiatric and mental health nurse clinical specialist, the contract will provide for the payment for the service so performed or rendered by a certified registered nurse practitioner or psychiatric and mental health nurse clinical specialist to subscribers. No nonprofit medical service corporation may require supervision, signature, or referral by any other health care provider as a condition of reimbursement to a certified registered nurse practitioner; provided, that no nonprofit medical service corporation may be required to pay for duplicative services actually rendered by both a certified registered nurse practitioner and any other health care provider;

(3) and further provided, that If any medical service as may be provided for from time to time shall include service which may be lawfully performed or rendered by a licensed midwife, the contract delivered, issued for delivery, or renewed in this state on or after January 1991 shall provide for the payment for the service so performed or rendered by a licensed midwife in accordance with each health insurers' respective principles and mechanisms of reimbursement credentialing and contracting if those services are within the licensed midwives' area of professional competence as defined by regulations promulgated pursuant to § 23-13-9, and are currently reimbursed when rendered by any other licensed health care provider. No nonprofit medical service corporation may require supervision, signature, or referral by any other health care provider as a condition of reimbursement except when the requirements are also applicable to other categories of health care providers; provided, no insurer or hospital or medical service corporation or patient may be required to pay for duplicate services actually rendered by both a licensed midwife and any other health care provider. Direct payment for licensed midwives will be contingent upon services rendered in a licensed health care facility and for services rendered in accordance with rules and regulations promulgated by the department of health; provided, however, that this provision shall not prohibit payment for services pursuant to § 42-62-26 or for other services reimbursed by third party payors; and

(4) provided further, that If any medical service which may be provided for from time to time shall include service which may be rendered by a counselor in mental health or a therapist in marriage and family practice, excluding marital and family therapy unless there is an individual diagnosed with a mental disorder, the contract shall provide for payment for the service so performed or rendered when deemed medically necessary by the nonprofit medical service corporation in accordance with its standard medical management protocols and within the nonprofit medical service corporation's subscriber contractual limits. In the case of a limited provider network, it shall remain within the sole discretion of the nonprofit medical service corporation as to which certified counselors in mental health and certified therapists in marriage and family practice with which it shall contract. Nothing contained herein in this subdivision shall require the nonprofit medical service corporation to provide coverage other than in conjunction with a related medical illness.

(5) No contract between a nonprofit medical service corporation and a dentist for the provisions of services to patients may require that the dentist indemnify or hold harmless the nonprofit medical service corporation for any expenses and liabilities, including without limitation, judgments, settlements, attorneys' fees, court costs, and any associated charges, incurred in connection with any claim or action brought against the nonprofit medical service corporation based on the nonprofit medical service corporation's management decisions, or utilization review provisions for any patient.

27-20-17.1. Insurance coverage for post-partum hospital stays. -- (a) Every individual or group hospital or medical services plan contract delivered, issued for delivery, or renewed in this state on or after September 1, 1996 shall provide coverage for a forty-eight (48) hour time period in a hospital after a vaginal birth and ninety-six (96) hours after a Cesarean section for a mother and her newly born child. Any decision to shorten these minimum coverages shall be made by the attending health care provider in consultation with the mother. The decision shall be made in accordance with the standards for guidelines for perinatal care published by the American College of Obstetrics and Gynecology and the American Academy of Pediatrics. The standards shall be relative to early discharge, defined as less than forth-eight (48) hours for a vaginal delivery and ninety-six (96) for a Cesarean delivery. In the case of early discharge, post-delivery care shall include, home visits, parent education, assistance and training in breast or bottle feeding and the performance of any necessary and appropriate clinical tests or any other tests or services consistent with the above guidelines.

(b) For the purposes of this section, "attending health care provider" shall include includes the attending obstetrician, pediatrician, family practitioner, general practitioner or certified nurse midwife attending the mother and newly born child.

(c) Any subscriber who is aggrieved by a denial of benefits to be provided under this section may appeal the denial in accordance with regulations of the department of health, which have been promulgated pursuant to chapter 17.12 of title 23. No policy or plan covered under this chapter shall terminate the services, reduce capitation payment, or otherwise penalize an attending physician or other health care provider who orders care consistent with the provisions of this section.

27-20-20. Coverage for infertility. -- (a) Any nonprofit medical service contract, plan, or insurance policies here and after delivered, issued for delivery, or renewed in this state, on or after December 1, 1989, except contracts providing supplemental coverage to Medicare or other governmental programs, which includes pregnancy related benefits shall provide coverage for the medically necessary expenses of diagnosis and treatment of infertility. To the extent that a nonprofit medical service corporation provides reimbursement for a test or procedure used in the diagnosis or treatment of conditions other than infertility, those tests and procedures shall not be excluded from reimbursement when provided attendant to the diagnosis and treatment of infertility. Provided that, subscriber copayment, not to exceed twenty percent (20%), may be required for those programs and/or procedures the sole purpose of which is the treatment of infertility.

(b) For the purposes of this section, "infertility" shall mean means the condition of an otherwise presumably healthy married individual who is unable to conceive or produce conception during a period of one year.

 

27-20-23. Drug coverage. -- No group health insurer subject to the provisions of this chapter that provides coverage for prescription drugs under a group plan master contract delivered, issued for delivery, or renewed in this state on or after July 1, 1991, may require any person covered under the contract to obtain prescription drugs from a mail order pharmacy as a condition of obtaining benefits for the drugs.

 

27-20-29. Mastectomy treatment. -- (a) Every individual or group health insurance contract, plan or policy delivered, issued for delivery or renewed in this state on or after January 1, 1997, which provides medical coverage that includes coverage for physician services in a physician's office, and every policy which provides major medical or similar comprehensive-type coverage, shall include coverage for prosthetic devices or reconstructive surgery to restore and achieve symmetry for the patient incident to a mastectomy. Coverage for prosthetic devices and reconstructive surgery shall be subject to the deductible and coinsurance conditions applied to the mastectomy and all other terms and conditions applicable to other benefits. Any reconstructive surgery under this section must be performed within eighteen (18) months of the original mastectomy. As used in this section, "mastectomy" means the removal of all or part of the breast to treat a breast cancer, tumor, or mass.

(b) Any provision in any contract issued, amended, delivered or renewed in this state on or after January 1, 1997, which is in conflict with this section shall be of no force or effect.

(c) As used in this section, "prosthetic devices" means and includes the provision of initial and subsequent prosthetic devices pursuant to an order of the patient's physician or surgeon.

            (d) Nothing in this section shall be construed to require an individual or group policy to cover the surgical procedure known as mastectomy or to prevent the application of deductible or copayment provisions contained in the policy or plan, nor shall this section be construed to require that coverage under an individual or group policy be extended to any other procedures.

(e) Nothing in this section shall be construed to authorize an insured or plan member to receive the coverage required by this section if that coverage is furnished by a nonparticipating provider, unless the insured or plan member is referred to that provider by a participating physician, nurse practitioner, or certified nurse midwife providing care.

(f) Nothing in this section shall preclude the conducting of managed care reviews and medical necessity reviews, by an insurer, hospital or medical service corporation or health maintenance organization.

            27-20-29.1. Insurance coverage for mastectomy hospital stays.-- (a) The Rhode Island General Assembly recongnizes recognizes that breast cancer is a unique illness with both a physical and emotional impact on patients. Every individual or group hospital or medical services plan contract delivered, issued for delivery, or renewed in this state on or after September 1, 1997, shall provide coverage for a minimum forty-eight (48) hour time period in a hospital after the surgical procedures known as a mastectomy, and a minimum twenty-four (24) hours after an axilary node dissection. Any decision to shorten these minimum coverages shall be made by the attending physician in consultation with and upon agreement by the patient. If the patient participates in an early discharge, defined as in-patient care following a mastectomy that is less than forty-eight hours and in-patient care following an axilary node dissection that is less than twenty-four (24) hours, coverage shall include a minimum of one home visit conducted by a physician or registered nurse.

(b) Any subscriber who is aggrieved by a denial of benefits to be provided under this section may appeal the denial in accordance with regulations of the department of health, which have been promulgated pursuant to chapter 23 of title 17.12. No policy or plan covered under this chapter shall terminate the services, reduce capitation payment, or otherwise penalize an attending physician or other health care provider who orders care consistent with the provisions of this section.

(c) Notice. All plans subject to this section shall provide notice to each enrollee:

(1) In the next mass mailing made by the plan to the employee; or

(2) As part of any informational packet sent to the enrollee.

 

27-20-30. Diabetes treatment. -- (a) Every individual or group health insurance contract, plan, or policy delivered, issued for delivery or renewed in this state on or after January 1, 1997, which provides medical coverage that includes coverage for physician services in a physician's office, and every policy which provides major medical or similar comprehensive-type coverage, shall include coverage for the following equipment and supplies for the treatment of insulin treated diabetes, non-insulin treated diabetes, and gestational diabetes when medically appropriate and prescribed by a physician: blood glucose monitors and blood glucose monitors for the legally blind, test strips for glucose monitors and/or visual reading, insulin, injection aids, cartidges cartridges for the legally blind, syringes, insulin pumps, and appurtenances thereto to the pumps, insulin infusion devices, and oral agents for controlling blood sugar and therapeutic/molded shoes for the prevention of amputation. Upon the approval of new or improved diabetes equipment and supplies by the Food and Drug Administration, all policies governed by this chapter shall guarantee coverage of new diabetes equipment and supplies when medically appropriate and prescribed by a physician. These policies shall also include coverage, when medically necessary, for diabetes self-management education to ensure that persons with diabetes are instructed in the self-management and treatment of their diabetes, including information on the nutritional management of diabetes. The coverage for self-management education and education relating to medical nutrition therapy shall be limited to medically necessary visits upon the diagnosis of diabetes, where a physician diagnosis a significant change in the patient's symptoms or conditions which necessitate changes in a patient's self-management, or where reeducation or refresher training is necessary. This education, when medically necessary and prescribed by a physician, may be provided only by the physican physician or, upon his/her his or her referral, to an appropriately licensed and certified health care provider, and may be conducted in group settings. Coverage for self-management education and education relating to medical nutrition therapy shall also include home visits when medically necessary.

(b) Benefit plans offered by a hospital service corporation may impose copayment and/or deductibles for the benefits mandated by this chapter, however, in no instance shall the copayment or deductible amount be greater than the copayment or deductible amount imposed for other supplies, equipment, or physician office visits. Benefits for services under this chapter shall be reimbursed in accordance with the respective principles and mechanisms of reimbursement for each insurer, hospital, or medical service corporation, or health maintenance organization.

 

27-20-35. Third party reimbursement for services of certain health care workers. -- (a) Every individual or group health insurance contract, plan or policy delivered, issued or renewed by an insurer or nonprofit or for profit health service corporation on or after January 1, 1998, which provides benefits to individual subscribers and members within the state, or to all group members having a principal place of employment within the state, shall provide benefits for services rendered by a certified registered nurse anesthetist designated as a certified registered nurse anesthetist by the board of nurse registration and nursing education; provided, however, that the following conditions are met:

(1) The certified registered nurse anesthetist provides certain health care services under the supervision of anesthesiologists, licensed physicians or licensed dentists in accordance with § 5-34.2-2(c), which requires substantial specialized knowledge, judgment and skill related to the administration of anesthesia, including pre-operative and post-operative assessment of patients; administering anesthetics; monitoring patients during anesthesia; management of fluids in intravenous therapy and management of respiratory care; and

(2) The policy or contract currently provides benefits for identical services rendered by a provider of health care licensed by the state; and

(3) The certified registered nurse anesthetist is not a salaried employee of the licensed hospital or facility for which the nonprofit medical service corporation has an alternative contractual relationship to fund the services of a certified registered nurse anesthetist.

(b) It shall remain within the sole discretion of the nonprofit medical service corporation as to which certified registered nurse anesthetists it shall contract with. Reimbursement shall be provided according to the respective principles and policies of the nonprofit medical service corporation; provided, however, that no nonprofit medical service corporation may be required to pay for duplicative services actually rendered by a certified registered nurse anesthetist and any other health care provider. Nothing contained herein in this section shall preclude the nonprofit medical service corporation from conducting managed care, medical necessity or utilizaton utilization review.

            `27-20-35.1. Third party reimbursement for services of registered nurse first assistants. -- (a) Every individual or group health insurance contract, plan or policy delivered, issued or renewed by an insurer or nonprofit or for profit health service corporation on or after January 1, 2000, which provides benefits to individual subscribers and members within the state, or to all group members having a principal place of employment within the state, shall provide benefits for services rendered by a registered nurse first assistant, provided, however, that the following conditions are met:

(1) The registered nurse first assistant provides certain health care services under the supervision of a licensed physician; is currently licensed as a registered nurse in Rhode Island; has successfully completed a course in preparing the registered nurse as a first assistant in accordance with the Association of Operating Room Nurses core curriculum guide for the registered nurse first assistant and includes a minimum of one academic year in a college or university with didactic instruction and clinical internship programs; and is certified in perioperative nursing by the Certification Board of Perioperative Nursing (minimum of two years perioperative experience);

(2) The policy or contract currently provides benefits for identical services rendered by a provider of health care licensed by the state; and

(3) The registered nurse first assistant is not a salaried employee of the licensed hospital or facility for which the nonprofit hospital service corporation has an alternative contractual relationship to fund the services of a registered nurse first assistant.

(b) It remains within the sole discretion of the nonprofit medical service corporation as to which registered nurse first assistant in surgery it contracts with. Reimbursement is provided according to the respective principles and policies of the nonprofit medical service corporation: provided, however, that no nonprofit medical service corporation is required to provide direct reimbursement, or pay for duplicative services actually rendered by a registered nurse first assistant and any other health care provider. Nothing contained in this section precludes the nonprofit medical service corporations from conducting managed care, medical necessity or utilization review.

27-20-36. Human leukocyte antigen testing. -- Every individual or group hospital or medical services plan contract delivered or renewed in this state on or after March 19, 1998, shall include coverage of the cost for human leukocyte antigen testing, also referred to as histocompatibility locus antigen testing, for A, B, and DR antigens for utilization in bone marrow transplantation. The testing must be performed in a facility which is accredited by the American Association of Blood Banks or its successors, and is licensed under the Clinical Laboratory Improvement Act, 42 U.S.C. § 263a, as it may be from time to time amended. At the time of the testing, the person being tested must complete and sign an informed consent form which also authorizes the results of the test to be used for participation in the National Marrow Donor Program. The group hospital or medical services plan contract may limit each subscriber to one of these testings per lifetime.

27-20-39.1. Genetic information. -- (a) Except as provided in chapter 37.3 of title 5, insurance administrators, health plans and providers shall be prohibited from releasing genetic information without prior written authorization of the individual. Written authorization shall be required for each disclosure and include to whom the disclosure is being made. An exception shall exist for those participating in research settings governed by the federal policy for the protection of human research subjects (also known as "The Common Rule"). Tests conducted purely for research are excluded from the definition, as are tests for somatic (as opposed to heritable) mutations, and testing for forensic purposes.

(b) No individual or group health insurance contract, plan, or policy delivered, issued for delivery, or renewed in this state on or after January 1, 2002, which provides medical coverage that includes coverage for physician services in a physician's office, and every policy which provides major medical or similar comprehensive-type coverage excluding disability income, long term care and insurance supplemental policies which only provide coverage for specified diseases or other supplemental policies, shall:

(1) Use genetic information or request for genetic information or the results of genetic information or other genetic information to reject, deny, limit, cancel, refuse to renew, increase the rates of, affect the terms or conditions of, or otherwise affect a group or an individual's health insurance policy, contract, or plan;

(2) Request or require genetic information for the purpose of determining whether or not to issue or renew a group or individual's health benefits coverage, to set reimbursement/co-pay levels or determine covered benefits and services;

(3) Release the results of genetic information without the prior written authorization of the individual from whom the information was obtained, except in a format whereby by which individual identifiers are removed, encrypted, or encoded so that the identity of the individual is not disclosed. A recipient of information pursuant to this section may use or disclose the information solely to carry out the purpose for which the information was disclosed. Authorization shall be required for each redisclosure. An exception shall exist for participation in research settings governed by the federal policy for the protection of human research subjects (also known as "The Common Rule");

(4) Request or require information as to whether an individual has genetic information, or participated in genetic information of any kind, whether for clinical or research purposes.

(c) For the purposes of this section, "genetic information" is information about genes, gene product, or inherited characteristics that may derive from the individual or a family member.

27-20-43. F.D.A. approved prescription contraceptive drugs and devices. -- (a) Every individual or group health insurance contract, plan, or policy that provides prescription coverage and is delivered, issued for delivery, or renewed in this state on or after January 1, 2001, shall provide coverage for F.D.A. approved contraceptive drugs and devices requiring a prescription. Provided, however, that nothing in this subsection shall be deemed to mandate or require coverage for the prescription drug RU 486.

(b) Notwithstanding any other provision of this section, any medical service corporation may issue to a religious employer an individual or group health insurance contract, plan, or policy that excludes coverage for prescription contraceptive methods which are contrary to the religious employer's bona fide religious tenets.

(c) As used in this section, "religious employer" means an employer that is a "church or a qualified church-controlled organization" as defined in 26 U.S.C. § 3121.

(d) Every religious employer that invokes the exemption provided under this section shall provide written notice to prospective enrollees prior to enrollment with the plan, listing the contraceptive health care services the employer refuses to cover for religious reasons.

27-20-45. Termination of children's benefits. -- (a) Every individual or group health insurance contract, plan, or policy delivered, issued for delivery, or renewed in this state on or after January 1, 2001, which provides medical coverage that includes coverage for physician services in a physician's office, and every policy which provides major medical or similar comprehensive type coverage, except for supplemental policies which only provide coverage for specified diseases and other supplemental policies, shall include a provision that policyholders shall receive no less than thirty (30) days notice from the nonprofit medical service corporation that a child covered as a dependent by the policyholder is about to lose his or her coverage as a result of reaching the maximum age for a dependent child and that the child will only continue to be covered upon documentation being provided of current college enrollment, or that the child may purchase a conversion policy if he or she is not a college student.

(b) Nothing in this section prohibits a nonprofit medical service corporation from requiring a policyholder to annually provide proof of a child's current college enrollment in order to maintain the child's coverage. Provided further, nothing in this section requires coverage inconsistent with the membership criteria in effect under the policyholder's health benefits coverage.

SECTION 40. Section 27-20.1-17 of the General Laws in Chapter 27-20.1 entitled "Nonprofit Dental Service Corporations" is hereby amended to read as follows:

27-20.1-17. Termination of children's benefits. -- (a) Every individual or group health insurance contract, plan, or policy delivered, issued for delivery, or renewed in this state on or after January 1, 2001, which provides medical coverage that includes coverage for physician services in a physician's office, and every policy which provides major medical or similar comprehensive type coverage, except for supplemental policies which only provide coverage for specified diseases and other supplemental policies, shall include a provision that policyholders shall receive no less than thirty (30) days notice from the nonprofit dental service corporation that a child covered as a dependent by the policyholder is about to lose his or her coverage as a result of reaching the maximum age for a dependent child and that the child will only continue to be covered upon documentation being provided of current college enrollment, or that the child may purchase a conversion policy if he or she is not a college student.

(b) Nothing in this section prohibits a nonprofit dental service corporation from requiring a policyholder to annually provide proof of a child's current college enrollment in order to maintain the child's coverage. Provided further, nothing in this section requires coverage inconsistent with the membership criteria in effect under the policyholder's health benefits coverage.

SECTION 41. Sections 27-20.2-9 and 27-20.2-14 of the General Laws in Chapter 27-20.2 entitled "Nonprofit Optometric Service Corporations" are hereby amended to read as follows:

27-20.2-9. Adoption of chapter by hospital service corporation -- Any nonprofit hospital service corporation organized pursuant to the provisions of chapter 19 of this title, which first obtains authorization to do so by the Rhode Island Optometric Association as evidenced by the affidavit of the president and secretary of the society association, may amend its articles of association to adopt the provisions of this chapter, and thereupon upon that adoption the corporation shall have and exercise all of the powers and be subject to all of the duties and responsibilities of a nonprofit optometric service corporation to the same extent as though it had been incorporated as a nonprofit optometric service corporation.

27-20.2-14. Termination of children's benefits. -- (a) Every individual or group health insurance contract, plan, or policy delivered, issued for delivery, or renewed in this state on or after January 1, 2001, which provides medical coverage that includes coverage for physician services in a physician's office, and every policy which provides major medical or similar comprehensive type coverage, except for supplemental policies which only provide coverage for specified diseases and other supplemental policies, shall include a provision that policyholders shall receive thirty (30) days notice from the nonprofit optometric service corporation that a child covered as a dependent by the policyholder is about to lose his or her coverage as a result of reaching the maximum age for a dependent child and that the child will only continue to be covered upon documentation being provided of current college enrollment, or that the child may purchase a conversion policy if he or she is not a college student.

(b) Nothing in this section prohibits a nonprofit optometric service corporation from requiring a policyholder to annually provide proof of a child's current college enrollment in order to maintain the child's coverage. Provided further, nothing in this section requires coverage inconsistent with the membership criteria in effect under the policyholder's health benefits coverage.

 

SECTION 42. Section 27-20.6-6 of the General Laws in Chapter 27-20.6 entitled "Health Care Insurers - Coordination of Benefits" is hereby amended to read as follows:

27-20.6-6. Rules and regulations. -- On or before October 1, 1989, The director of the department of business regulation shall, upon twenty (20) days prior notice published in the Providence Journal, hold a hearing to consider promulgating promulgate rules and regulations, using the NAIC coordination of benefits model regulations as a guideline, which shall address: (1) the necessity and/or reasonableness of administrative penalties by entities subject to this chapter; (2) other procedures which may be necessary to carry out the provisions of this chapter.

SECTION 43. Section 27-20-40 of the General Laws in Chapter 27-20 entitled "Nonprofit Medical Service Corporations" is hereby repealed in its entirety.

27-20-40. Conditions of coverage. -- As provided in § 27-20-27, coverage is extended to new cancer therapies still under investigation when the following circumstances are present:

(a) Treatment is being provided pursuant to a phase II, III or IV clinical trial which has been approved by the National Institutes of Health (NIH) in cooperation with the National Cancer Institute (NCI), community clinical oncology programs; the Food and Drug Administration in the form of an investigational new drug (IND) exemption; the Department of Veterans' Affairs; or a qualified nongovernmental research entity as identified in the guidelines for NCI cancer center support grants;

(b) The proposed therapy has been reviewed and approved by a qualified institutional review board (IRB);

(c) The facility and personnel providing the treatment are capable of doing so by virtue of their experience, training, and volume of patients treated to maintain expertise;

(d) The patients receiving the investigational treatment meet all protocol requirements;

(e) There is no clearly superior, noninvestigational alternative to the protocol treatment;

(f) The available clinical or preclinical data provide a reasonable expectation that the protocol treatment will be at least as efficacious as the noninvestigational alternative; and

(g) The coverage of new cancer therapy treatment provided pursuant to a phase II clinical trial is not required for only that portion of that treatment as is provided as part of the phase II clinical trial and is otherwise funded by a national agency, such as the National Cancer Institute, the Veteran's Administration, the Department of Defense, or funded by commercial organizations such as the biotechnical and/or pharmaceutical industry or manufacturers of medical devices. Any portions of a phase II trial which are customarily funded by government, biotechnical and/or pharmaceutical and/or medical device industry sources in Rhode Island or in other states shall continue to be funded in Rhode Island and coverage pursuant to this section supplements, does not supplant customary funding.

 

            SECTION 44. Section 27-18-4 of the General Laws in Chapter 27-18 entilted "Accident and Sickness Insurance Policies" is hereby amended to read as follows:

27-18-4. Optional provisions. -- Except as provided in § 27-18-5, no policy delivered or issued for delivery to any person in this state shall contain provisions respecting the matters set forth below in this section unless the provisions are in the words in which they appear in this section; provided, however, that the insurer may, at its option, use in lieu of any provision a corresponding provision of different wording approved by the commissioner which is not less favorable in any respect to the insured or the beneficiary. The provision contained in the policy shall be preceded individually by the appropriate caption appearing in this section or, at the option of the insurer, by any appropriate individual or group captions or subcaptions as the commissioner may approve:

(1) A provision as follows:

"CHANGE OF OCCUPATION: If the insured be is injured or contracts sickness after having changed his or her occupation to one classified by the insurer as more hazardous than that stated in this policy or while doing for compensation anything pertaining to an occupation so classified, the insurer will pay only that portion of the indemnities provided in this policy as the premium paid would have purchased at the rates and within the limits fixed by the insurer for the more hazardous occupation. If the insured changes his or her occupation to one classified by the insurer as less hazardous than that stated in this policy, the insurer, upon receipt of proof of the change of occupation, will reduce the premium rate accordingly, and will return the excess pro rata unearned premium from the date of change of occupation or from the policy anniversary date immediately preceding receipt of the proof, whichever is the more recent. In applying this provision, the classification of occupational risk and the premium rates shall be such as have been last filed by the insurer, prior to the occurrence of the loss for which the insurer is liable or prior to the date of proof of change in occupation, with the state official having supervision of insurance in the state where the insured resided at the time this policy was issued; but, if the filing was not required, then the classification of occupational risk and the premium rates shall be those last made effective by the insurer in the state prior to the occurrence of the loss or prior to the date of proof of change in occupation."

(2) A provision as follows:

"MISSTATEMENT OF AGE: If the age of the insured has been misstated, all amounts payable under this policy shall be such as the premium paid would have purchased at the correct age."

(3) A provision as follows:

"OTHER INSURANCE IN THIS INSURER: If an accident or sickness or accident and sickness policy or policies previously issued by the insurer to the insured be is in force concurrently herewith with this policy, making the aggregate indemnity for . . . . . . . . . . ." (insert type of coverage or coverages) "in excess of $. . . . . . . ." (insert maximum limit of indemnity or indemnities) "the excess insurance shall be void and all premiums paid for the excess shall be returned to the insured or to his or her estate," or, in lieu thereof:

"Insurance effective at any one time on the insured under a like policy or policies in this insurer is limited to the one such policy elected by the insured, his or her beneficiary or his or her estate, as the case may be, and the insurer will return all premiums paid for all other like policies."

(4) A provision as follows:

"INSURANCE WITH OTHER INSURERS: If there be is other valid coverage, not with this insurer, providing benefits for the same loss on a provision of service basis or on an expense incurred basis and of which this insurer has not been given written notice prior to the occurrence or commencement of loss, the only liability under any expense incurred coverage of this policy shall be for the proportion of the loss as the amount which would otherwise have been payable hereunder plus the total of the like amounts under all the other valid coverages for the same loss of which this insurer had notice bears to the total like amounts under all valid coverages for the loss, and for the return of the portion of the premiums paid as shall exceed the pro rata portion for the amount so determined. For the purpose of applying this provision when other coverage is on a provision of service basis, the "like amount" of the other coverage shall be taken as the amount which the services rendered would have cost in the absence of the coverage."

(If the foregoing this policy provision is included in a policy which also contains the next following policy provision, there shall be added to the caption of the foregoing this provision the phrase " - EXPENSE INCURRED BENEFITS." The insurer may, at its option, include in this provision a definition of "other valid coverage", approved as to form by the commissioner, which definition shall be limited in subject matter to coverage provided by organizations subject to regulation by insurance law or by insurance authorities of this or any other state of the United States or any province of Canada, and by hospital or medical service organizations, and to any other coverage the inclusion of which may be approved by the commissioner. In the absence of the definition, the term shall not include group insurance, automobile medical payments insurance, or coverage provided by hospital or medical service organizations or by union welfare plans or employer or employee benefit organizations. For the purpose of applying the foregoing this policy provision with respect to any insured, any amount of benefit provided for the insured pursuant to any compulsory benefit statute, including any workers' compensation or employer's liability statute, whether provided by a governmental agency or otherwise, shall in all cases be deemed to be "other valid coverage" of which the insurer has had notice. In applying the foregoing this policy provision, no third party liability coverage shall be included as "other valid coverage".)

(5) A provision as follows:

"INSURANCE WITH OTHER INSURERS: If there be is other valid coverage, not with this insurer, providing benefits for the same loss on other than an expense incurred basis and of which this insurer has not been given written notice prior to the occurrence or commencement of loss, the only liability for those benefits under this policy shall be for the proportion of the indemnities otherwise provided hereunder for the loss as the like indemnities of which the insurer had notice (including the indemnities under this policy) bear to the total amount of all like indemnities for the loss, and for the return of the portion of the premium paid as shall exceed the pro rata portion for the indemnities thus determined."

(If the foregoing this policy provision is included in a policy which also contains the next preceding policy provision, there shall be added to the caption of the foregoing this provision the phrase " - OTHER BENEFITS." The insurer may, at its option, include in this provision a definition of "other valid coverage", approved as to form by the commissioner, which definition shall be limited in subject matter to coverage provided by organizations subject to regulation by insurance law or by insurance authorities of this or any other state of the United States or any province of Canada, and to any other coverage the inclusion of which may be approved by the commissioner. In the absence of the definition, such term shall not include group insurance, or benefits provided by union welfare plans or by employer or employee benefit organizations. For the purpose of applying the foregoing this policy provision with respect to any insured, any amount of benefit provided for the insured pursuant to any compulsory benefit statute, including any workers' compensation or employer's liability statute, whether provided by a governmental agency or otherwise, shall in all cases be deemed to be "other valid coverage" of which the insurer has had notice. In applying the foregoing this policy provision, no third party liability coverage shall be included as "other valid coverage".)

(6) A provision as follows:

"RELATION OF EARNINGS TO INSURANCE: If the total monthly amount of loss of time benefits promised for the same loss under all valid loss of time coverage upon the insured, whether payable on a weekly or monthly basis, shall exceed the monthly earnings of the insured at the time disability commenced or his or her average monthly earnings for the period of two (2) years immediately preceding a disability for which claim is made, whichever is the greater, the insurer will be liable only for the proportionate amount of the benefits under this policy as the amount of the monthly earnings or the average monthly earnings of the insured bears to the total amount of monthly benefits for the same loss under all the coverage upon the insured at the time the disability commences, and for the return of the part of the premiums paid during the two (2) years that exceeds the pro rata amount of the premiums for the benefits actually paid under this policy; but this shall not operate to reduce the total monthly amount of benefits payable under all the coverage upon the insured below the sum of two hundred dollars ($200) or the sum of the monthly benefits specified in the coverages, whichever is the lesser, nor shall it operate to reduce benefits other than those payable for loss of time."

(The foregoing This policy provision may be inserted only in a policy which the insured has the right to continue in force subject to its terms by the timely payment of premiums: (A) (i) until at least age fifty (50); or, (B) (ii) in the case of a policy issued after age forty-four (44), for at least five (5) years from its date of issue. The insurer may, at its option, include in this provision a definition of "valid loss of time coverage", approved as to form by the commissioner, which definition shall be limited in subject matter to coverage provided by governmental agencies or by organizations subject to regulation by insurance law or by insurance authorities of this or any other state of the United States or any province of Canada, or to any other coverage the inclusion of which may be approved by the commissioner or any combination of those this coverages. In the absence of a definition, the term shall not include any coverage provided for the insured pursuant to any compulsory benefit statute, including any workers' compensation or employer's liability statute, or benefits provided by union welfare plans or by employer or employee benefit organizations.)

(7) A provision as follows:

"UNPAID PREMIUM: Upon the payment of a claim under this policy, any premium then due and unpaid or covered by any note or written order may be deducted therefrom from the payment."

(8) A provision as follows:

"CANCELATION CANCELLATION: The insurer may cancel this policy at any time by written notice delivered to the insured, or mailed to his or her last address as shown by the records of the insurer, stating when, not less than ten (10) days thereafter after this, the cancelation cancellation shall be effective; and, after the policy has been continued beyond its original term, the insured may cancel this policy at any time by written notice delivered or mailed to the insurer, effective upon receipt or on a later date as may be specified in the notice. In the event of cancellation cancellation, the insurer will return promptly the unearned portion of any premium paid. If the insured cancels, the earned premium shall be computed by the use of the short-rate table last filed with the state official having supervision of insurance in the state where the insured resided when the policy was issued. If the insurer cancels, the earned premium shall be computed pro rata. Cancelation Cancellation shall be without prejudice to any claim originating prior to the effective date of cancellation cancellation."

(9) A provision as follows:

"CONFORMITY WITH STATE STATUTE: Any provision of this policy which, on its effective date, is in conflict with the statutes of the state in which the insured resides on that date, is hereby amended to conform to the minimum requirements of those statutes."

(10) A provision as follows:

"ILLEGAL OCCUPATION: The insurer shall not be liable for any loss to which a contributing cause was the insured's commission of or attempt to commit a felony or to which a contributing cause was the insured's being engaged in an illegal occupation."

(11) A provision as follows:

"INTOXICANTS AND NARCOTICS: The insurer shall not be liable for any loss sustained or contracted in consequence of the insured's being intoxicated or under the influence of any narcotic unless administered on the advice of a physician."

SECTION 45. Section 21-2-11 of the General Laws in Chapter 21-2 entitled "Milk Sanitation Code" is hereby amended to read as follows:

21-2-11. Emergency powers. -- (a) In the event of any serious disaster, such as conflagration, enemy attack, earthquake, flood, hurricane, tornado, drought, or other emergency, which shall result in an unusual nonseasonal shortage in the milk supply in the state of Rhode Island, the director shall have power, upon issuance of an order by him or her specifying the nature and extent of such the emergency and without notice: (1)(a) to suspend part or all of the regulations made under authority of this chapter; (2)(b) to promulgate other or additional emergency regulations; and (3)(c) to suspend part or all of the requirements of this chapter pertaining to inspection and the obtaining of permits by milk plants located outside the state of Rhode Island from which milk is derived for sale in the state of Rhode Island and pertaining to inspection of their milk producers and haulers.;

(b) and In the case of any such special emergency, the director may issue emergency permits for the importation of milk into the state of Rhode Island which has not been inspected at the source in accordance with this statute and the regulations thereunder pursuant to this chapter; provided, however, that the director shall be satisfied that any such source of milk so admitted by emergency permit shall not constitute a threat to the health of the people of Rhode Island, and provided that environmental conditions surrounding the production, transportation, and processing of the imported milk shall reasonably have been subject to inspection at its source under authority of law other than that of the state of Rhode Island.

(c) The suspension and emergency regulations shall be for the duration of the emergency or forty (40) days, whichever period shall be shorter.

(d) The director is further empowered in the event of any contamination or threat of contamination of the milk supply, alone to promulgate additional emergency regulations pertaining to the treatment and conditions of production, distribution, and sale of milk, the regulations to go into effect forthwith immediately without a hearing. The emergency regulations shall be in effect forty (40) days or the duration of the emergency, whichever period shall be shorter. The director shall promulgate the emergency regulations by filing a copy thereof of them in the secretary of state's office and having copies available for public inspection. As soon as practicable, the director shall give notice of the promulgation of the emergency regulations.

            SECTION 46. Section 21-9-13 of the General Laws in Chapter 21-9 entitled "Frozen Desserts" is hereby amended to read as follows:

21-9-13. Regulations. -- (a) The authority to promulgate regulations for the efficient enforcement of this chapter is hereby vested in the director of health, and he or she is hereby authorized to promulgate, among others, regulations, definitions, and standards which are not inconsistent with the provisions of this chapter to govern the manufacture, labeling, transportation, advertising, and sale of frozen desserts and frozen dessert mixes, and the employee health standards and the sanitary conditions of the buildings, grounds, equipment, containers, and vehicles where such those products are handled, manufactured, transported, sold, and/or stored.

(b) Whenever such the action will promote honesty and fair dealing in the interest of consumers, the director of health shall promulgate regulations fixing and establishing for frozen desserts and frozen dessert mixes definitions and standards of identity and quality and reasonable standards of fill of containers. In prescribing a definition and standard of identity for frozen desserts and frozen dessert mixes in which optional ingredients are permitted, the director of health shall, for the purpose of promoting honesty and fair dealing in the interest of consumers, designate the optional ingredients which shall be named on the label.

(c) The definitions and standards promulgated under the provisions of this chapter shall conform as far as practicable to the definitions and standards promulgated under the authority of 21 U.S.C. § 341. which are in effect as of April 19, 1962.

(d) Hearings authorized or required by this chapter shall be conducted by the director of health or such any officer, agent, or employee as that the director of health may designate for the purpose.

(e) The adoption of regulations shall be in accordance with chapter 35 of title 42.

            SECTION 47. Section 21-11-3 of the General Laws in Chapter 21-11 entitled "Meats" is hereby amended to read as follows:

21-11-3. License required for processing and packing houses. -- No person, firm, association, or corporation shall operate within this state any establishment for the purpose of slaughtering any animal for human consumption, or for canning, curing, smoking, salting, packing, rendering, or otherwise handling the carcass of any animal or part thereof of the carcass, or for the manufacturing of any meat product or meat food product, until that person, firm, association, or corporation shall have obtained a license from the state department of health. This section shall not apply to a retail market offering for sale only those primal parts commonly known in the trade as sides, quarters, shoulders, hams, backs, bellies, tongues, livers, or similar parts, or meat, meat products, or meat food products, which have been obtained from the establishment of a person, firm, association, or corporation licensed in accordance with provisions of this section, nor to any retail market as heretofore defined wherein where meat processing consists solely of grinding meat for sale on the premises.

SECTION 48. Section 21-16-1 of the General Laws in Chapter 21-16 entitled "Kosher Foods" is hereby amended to read as follows:

21-16-1. Violations or deception as to religious dietary laws by dealers in meats. -- A person, firm, or corporation shall be guilty of a misdemeanor:

(1)(a) Who shall knowingly sell or expose for sale any meat or meat preparation, either raw or prepared for human consumption, and falsely represent the same it to be kosher or as having been prepared under the supervision of a rabbi or as a product or products sanctioned by the traditional or orthodox Hebrew religious requirements and dietary laws;, or

(2)(b) Who shall falsely represent any food product or the contents of any package or container to be so constituted and prepared, by having or permitting to be inscribed thereon the word "kosher" in any language;, or

(3)(c) Who shall sell or expose for sale in the same place of business both kosher and non-kosher meat or meat preparation, either raw or prepared for human consumption, who fails to indicate on the window signs and all display advertising, in block letters at least four inches (4”) in height, "kosher and non-kosher meat sold here"; or

(4)(d) Who shall expose for sale in any show window or place of business both kosher and non-kosher meat or meat preparation, either raw or prepared for human consumption, who fails to display over each kind of meat or meat preparation so exposed a sign in block letters at least four inches (4”) in height reading "kosher meat" or "non-kosher meat," as the case may be;, or

(5)(e) Who shall, while dealing or purporting to deal in kosher meat or meat preparations, prepare or handle or sell, or cause to be prepared or handled or sold, any food product which, when so prepared or handled or sold together with kosher meat or meat preparation, constitutes a violation of the traditional or orthodox Hebrew religious requirements and dietary laws, and thereby render such by which renders the kosher meat or meat preparation, so prepared or handled or sold in conjunction therewith, non-kosher;, or

(6)(f) Who shall otherwise in the preparation, handling, or sale of kosher meat or meat preparation fail to comply strictly with the religious requirements and dietary laws necessary to constitute the meat or meat preparation genuinely kosher;, or

(7)(g) Who shall, without complying with such Hebrew religious or dietary laws, issue or maintain any sign or advertisement in any language purporting to represent that he or she sells or deals in kosher meat or meat preparations;, or

(8)(h) Who shall display on his or her window, door, or in his or her place of business, words or letters in the Hebrew language, or any sign, emblem, insignia, symbol, or mark in simulation of Hebrew words or letters, the display of which might reasonably be calculated to deceive or lead a person to believe that a representation, express or implied, is being made that the meat or meat preparation exposed for sale is kosher and in conformity with the traditional or orthodox Hebrew religious requirements.

            SECTION 49. Sections 21-23-3 and 21-23-4 of the General Laws in Chapter 21-23 entitled "Nonalcoholic Bottled Beverages, Drinks and Juices" are hereby amended to read as follows:

21-23-3. Suspension or revocation of permits. -- Permits granted under this chapter may be suspended or revoked by the department of health for violation of any provision of this chapter or the regulations promulgated pursuant thereto to this chapter or of chapter 27 of this title or chapter 31 of this title.

21-23-4. Adoption of regulations. -- All nonalcoholic beverage, drink, or juice regulations and any amendments thereto, to them adopted pursuant to the Federal Food, Drug and Cosmetic Act, [21 U.S.C. §§ 301-392], which are in effect on May 8, 1979, or which are adopted on or after such date 21 U.S.C. § 301 et seq., are the bottled beverage regulations in this state. The department may, by regulation, provide for modification or deviation from such those regulations, whether or not such the modifications or deviations are in accordance with the regulations adopted pursuant to the Federal Food, Drug, and Cosmetic Act.

The director of health is further authorized to adopt any other regulations for bottled beverages he or she deems necessary in accordance with authority granted under this chapter, § 21-23-7, chapter 27 of this title and § 23-1-18(5).

            SECTION 50. Section 21-5-8 of the general Laws in Chapter 21-5 entitled "Analysis of Milkfat Content in Milk or Milk Products" is hereby repealed in its entirety.

21-5-8. Inspection. -- The director shall inspect, or cause to be inspected, at least once each year, each Babcock or other centrifugal machine used within the state of Rhode Island for the purpose of analysis or inspection of milk.

            SECTION 51. Sections 21-24-2 and 21-24-4 of the General Laws in Chapter 21-24 entitled "Flour and Bread" are hereby amended to read as follows:

 

21-24-2. Regulations. -- All bakery products, cereal flours, and related products regulations and any amendments thereto to them adopted by the federal government pursuant to the Food, Drug, and Cosmetic Act, CFR 21, Parts 136, entitled "Bakery Products," and 137, entitled "Cereal Flours and Related Products," on May 11, 1982, or which are adopted on or after that date, are the regulations in this state. The department may by regulation provide for modification or deviation from the aforesaid regulation where the interest of Rhode Island consumers may warrant, whether or not the modifications or deviations are in accordance with the regulations adopted pursuant to the Federal Food, Drug, and Cosmetic Act, [21 U.S.C. §§ 301 to 392 et seq.;], provided, the amendments do not interfere with interstate commerce. A federal regulation automatically adopted pursuant to this chapter takes effect in this state on the date it becomes effective as a federal regulation. The director shall publish a notice of the adoption in a newspaper having general circulation throughout the state. A person who may be adversely affected by a regulation may, within thirty (30) days after a federal regulation is automatically adopted, file with the director, in writing, objections and a request for a hearing. The timely filing of substantial objections to a federal regulation automatically adopted stays the effect of the regulation. If no substantial objections are received and no hearing is requested within thirty (30) days after publication of a notice of the adoption of a federal regulation, it shall be effective as of the date it was adopted by the federal government. If timely substantial objections are made to a federal regulation within thirty (30) days after it is automatically adopted, the director, after notice, shall conduct a public hearing in accordance with the provisions of chapter 35 of title 42. The director of health is further authorized to adopt any regulations for bakery products, cereal flours, and related products that he or she deems necessary in accordance with authority granted under this chapter, chapter 31 of this title, chapter 27 of this title, and § 23-1-18(5).

 

`           21-24-4. Enforcement of provisions. -- Enforcement of this chapter shall be in accordance with the provisions of §§ 23-1-20 - 23-1-24.

 

            SECTION 52. Section 21-26-1 of the General Laws in Chapter 21-26 entitled "Soda and Cream of Tartar" is hereby amended to read as follows:

 

21-26-1. Appointment of municipal inspectors. -- The city council of Providence shall, and the town councils of the several cities and towns may, appoint an inspector of saleratus, bicarbonate of soda, and cream of tartar for the city cities and towns., respectively.

 

            SECTION 53. Section 21-27.1-3 (Effective until January 7, 2003) and 21-27.1-3 (Effective January 7, 2003) of the General Laws in Chapter 21-27 entitled "Plastic Recycling and Litter Act" are hereby amended to read as follows:

 

21-27.1-3. Plastic recycling and litter commission. [Effective until January 7, 2003.] -- (a) There is hereby created a permanent commission consisting of thirteen (13) members: one of whom shall be the director of the department of environmental management or his or her designee, who shall act as chairperson of the commission; one of whom shall be the director of the solid waste management corporation or his or her designee; one of whom shall be the chairperson of the source reduction task force or his or her designee; one of whom shall be a state senator appointed by the senate majority leader; one of whom shall be a state representative appointed by the speaker; one of whom shall be a representative of the plastic packaging industry, appointed by the governor; one of whom shall be a distributor of plastic/foam food service products, appointed by the lieutenant governor; one of whom shall be a retailer who sells plastic/foam food service products, appointed by the senate majority leader; one of whom shall be a fast food service representative or owner, appointed by the speaker; one of whom shall be a representative of a hospital or hospital organization, appointed by the governor; two (2) of whom shall be representatives of environmental groups involved with litter issues; one of whom shall be appointed by the lieutenant governor and the other appointed by the senate majority leader; one of whom shall be a representative from an educational institution food service, appointed by the speaker.

(b) The purpose of the commission shall be to produce a plan which shall be submitted to the governor and the general assembly on or before January 1, 1991, which plan will provide for the maximum recycling of plastic and foam food service products. For those products which cannot be recycled, the commission will develop guidelines for the use of photodegradable and biodegradable products wherever feasible. These guidelines would take effect January 1, 1992.

(c) The commission shall continue thereafter to monitor the plan and guidelines and study and update its findings and recommendations on a continuing basis.

 

21-27.1-3. Plastic recycling and litter commission. [Effective January 7, 2003.] -- (a) There is hereby created a permanent commission consisting of thirteen (13) members: one of whom shall be the director of the department of environmental management or his or her designee, who shall act as chairperson of the commission; one of whom shall be the director of the solid waste management corporation or his or her designee; one of whom shall be the chairperson of the source reduction task force or his or her designee; one of whom shall be a state senator appointed by the president of the senate; one of whom shall be a state representative appointed by the speaker; one of whom shall be a representative of the plastic packaging industry, appointed by the governor; one of whom shall be a distributor of plastic/foam food service products, appointed by the lieutenant governor; one of whom shall be a retailer who sells plastic/foam food service products, appointed by the president of the senate; one of whom shall be a fast food service representative or owner, appointed by the speaker; one of whom shall be a representative of a hospital or hospital organization, appointed by the governor; two (2) of whom shall be representatives of environmental groups involved with litter issues; one of whom shall be appointed by the lieutenant governor and the other appointed by the president of the senate; one of whom shall be a representative from an educational institution food service, appointed by the speaker.

(b) The purpose of the commission shall be to produce a plan which shall be submitted to the governor and the general assembly on or before January 1, 1991, which plan will provide for the maximum recycling of plastic and foam food service products. For those products which cannot be recycled, the commission will develop guidelines for the use of photodegradable and biodegradable products wherever feasible. These guidelines would take effect January 1, 1992.

(c) The commission shall continue thereafter to monitor the plan and guidelines and study and update its findings and recommendations on a continuing basis.

 

            SECTION 54. Sections 28-28-2.10, 21-28-3.05, 21-28-3.18, 21-28-4.01, 21-28-4.15, 21-28-4.17.1, 21-28-5.04, 21-28-5.05, 21-28-5.07, 21-28-5.07.2, 21-28-5.07.3, 21-28-5.07.4, and 21-28-5.07.5 of the General Laws in Chapter 21-28 entitled "Uniform Controlled Substances Act" are hereby amended to read as follows:

21-28-2.10. Exemption of dextromethorphan. -- Dextromethorphan shall not be deemed to be included in any schedule by reason of enactment of this chapter unless controlled after the date of such enactment pursuant to the foregoing provisions of this article.

21-28-3.05. Order to show cause. -- (a) Before denying, suspending, or revoking a registration, or refusing a renewal of a registration, the director of health shall serve upon the applicant or registrant an order to show cause why the registration should not be denied, revoked, or suspended, or why the renewal should not be refused. The order to show cause shall contain a statement of the basis thereof of the order and shall call upon the applicant or registrant to appear before the director of health at a time and place stated in the order but in no event less than thirty (30) days after the date of receipt of the order. Proceedings to deny, suspend, or revoke shall be conducted pursuant to this section in accordance with chapter 35 of title 42, ( the Administrative Procedures Act.). The proceedings shall be independent of, and not in lieu of, criminal prosecution or other proceedings under this chapter or any law of the state.

(b) The director of health may suspend for a period of ten (10) days any registration simultaneously with the institution of proceedings under this section in cases where he or she finds that there is an imminent danger to the public health or safety. The suspension shall continue in effect until the conclusion of the proceedings, including judicial review thereof of them, shall continue in effect until the conclusion, unless sooner withdrawn by the director of health or dissolved by a court of competent jurisdiction.

 

21-28-3.18. Prescriptions. -- (a) An apothecary in good faith may sell and dispense controlled substances in schedule II to any person upon a written prescription, by a practitioner licensed by law to prescribe or administer such those substances, dated and signed by the person prescribing on the day when issued and bearing the full name and address of the patient to whom, or of the owner of the animal for which the substance is dispensed and the full name, address and registration number under the federal law of the person prescribing, if he or she is required by that law to be so registered. If the prescription is for an animal, it shall state the species of the animal for which the substance is prescribed.

(b) The apothecary filling the prescription shall sign his or her full name and shall write the date of filling on the face of the prescription.

(c) The prescription shall be retained on file by the proprietor of the pharmacy in which it was filled for a period of two (2) years so as to be readily accessible for inspection by any public officer or employee engaged in the enforcement of this chapter.

(d)(1) Prescriptions for controlled substances in schedule II shall be filed separately and shall not be refilled. The form of record for prescription slips for controlled substances in schedule II shall consist of two (2) parts, an original and a duplicate which are required to be presented to the pharmacy by the ultimate user or his or her representative.

Pharmacies dispensing controlled substances in schedule II are required to deliver to the director of health all duplicate copies of such the prescriptions on or before the fifth day of the month following the date of dispensing. The prescription slip shall be a form provided by the director of health.

(2) The director of health may, after appropriate notice and hearing pursuant to § 42-35-3, promulgate rules and regulations for the purpose of adopting a system for electronic data transmission of prescriptions for controlled substances in schedule II and III, and needles and syringes. Such a This system, when operational, shall negate the necessity to utilize the two-part prescription described above in subdivision (1) of this subsection.

(e) A prescription for a schedule II narcotic substance to be compounded for the direct administration to a patient by parenteral, intravenous, intramuscular, subcutaneous, or intraspinal infusion, may be transmitted by the practitioner or practitioner's agent to the pharmacy by facsimile. The facsimile will serve as the original prescription.

(f) A prescription written for a schedule II substance for a resident of a long term care facility may be transmitted by the practitioner or the practitioner's agent to the dispensing pharmacy by facsimile. The facsimile serves as the original prescription.

(g) A prescription for a schedule II narcotic substance for a patient residing in a hospice certified by Medicare under title XVII XVIII of the Social Security Act, 42 U.S.C. § 1395 et seq., or licensed by the state, may be transmitted by the practitioner or practitioner's agent to the dispensing pharmacy by facsimile. The practitioner or the practitioner's agent will note on the prescription that the patient is a hospice patient. The facsimile serves as the original written prescription.

(h) An apothecary, in lieu of a written prescription, may sell and dispense controlled substances in schedules III, IV, and V to any person, upon an oral prescription of a practitioner. In issuing an oral prescription the prescriber shall furnish the apothecary with the same information as is required by subsection (a) of this section in the case of a written prescription for controlled substances in schedule II, except for the written signature of the person prescribing, and the apothecary who fills the prescription, shall immediately reduce the oral prescription to writing and shall inscribe the information on the written record of the prescription made. This record shall be filed and preserved by the proprietor of the pharmacy in which it is filled in accordance with the provisions of subsection (c) of this section. In no case may a prescription for a controlled substance listed in schedules III, IV, or V be filled or refilled more than six (6) months after the date on which the prescription was issued and no prescription shall be authorized to be refilled more than five (5) times. Each refilling shall be entered on the face or back of the prescription and note the date and amount of controlled substance dispensed, and the initials or identity of the dispensing apothecary.

(i) In the case of an emergency situation as defined in federal law, an apothecary may dispense a controlled substance listed in schedule II upon receiving an oral authorization of a prescribing practitioner provided that:

(1) The quantity prescribed and dispensed is limited to the amount adequate to treat the patient during the emergency period and dispensing beyond the emergency period must be pursuant to a written prescription signed by the prescribing practitioner.

(2) The prescription shall be immediately reduced to writing and shall contain all the information required in subsection (a) of this section.

(3) The prescription must be dispensed in good faith in the normal course of professional practice.

(4) Within seven (7) days after authorizing an emergency oral prescription, the prescribing practitioner shall cause a written prescription for the emergency quantity prescribed to be delivered to the dispensing apothecary. The prescription shall have written on its face "Authorization for emergency dispensing" and the date of the oral order. The written prescription upon receipt by the apothecary shall be attached to the oral emergency prescription which had earlier been reduced to writing.

(j) (1) The partial filling of a prescription for a controlled substance listed in schedule II is permissible, if the apothecary is unable to supply the full quantity called for in a written prescription or emergency oral prescription and he or she makes a notation of the quantity supplied on the face of the written prescription or oral emergency prescription which has been reduced to writing. The remaining portion of the prescription may be filled within seventy-two (72) hours of the first partial filling, however, if the remaining portion is not, or cannot be filled within seventy-two (72) hours, the apothecary shall notify the prescribing practitioner. No further quantity may be supplied beyond seventy-two (72) hours without a new prescription.

(2)(i) A prescription for a schedule II controlled substance written for a patient in a long term care facility (LTCF), or for a patient with a medical diagnosis documenting a terminal illness, may be filled in partial quantities to include individual dosage units. If there is a question whether a patient may be classified as having a terminal illness, the pharmacist must contact the practitioner prior to partially filling the prescription. Both the pharmacist and the prescribing practitioner have a corresponding responsibility to assure that the controlled substance is for a terminally ill patient.

(ii)(A) The pharmacist must record on the prescription whether the patient is "terminally ill" or an "LTCF patient." A prescription that is partially filled, and does not contain the notation "terminally ill" or "LTCF patient", shall be deemed to have been filled in violation of the act this chapter.

(iii)(B) For each partial filling, the dispensing pharmacist shall record on the back of the prescription (or on another appropriate record, uniformly maintained, and readily retrievable), the:

(A)(1) Date of the partial filling;

(B)(2) Quantity dispensed;

(C)(3) Remaining quantity authorized to be dispensed; and

(D)(4) Identification of the dispensing pharmacist.

(iv)(C) The total quantity of schedule II controlled substances dispensed in all partial fillings, must not exceed the total quantity prescribed.

(v)(D) Schedule II prescriptions for patients in a LTCF, or patients with a medical diagnosis documenting a terminal illness, are valid for a period not to exceed sixty (60) days from the issue date, unless sooner terminated by the discontinuance of medication.

(k) Automated data processing systems. As an alternative to the prescription record keeping provision of subsection (h) of this section, an automated data processing system may be employed for the record keeping system, if the following conditions have been met:

(1) The system shall have the capability of producing sight-readable documents of all original and refilled prescription information. The term "sight-readable" means that an authorized agent shall be able to examine the record and read the information. During the course of an on-site inspection, the record may be read from the CRT, microfiche, microfilm, printout, or other method acceptable to the director. In the case of administrative proceedings, records must be provided in a paper printout form.

(2) Such The information shall include, but not be limited to, the prescription requirements and records of dispensing as indicated in subsection (h) of this section.

(3) The individual pharmacist responsible for completeness and accuracy of the entries to the system must provide documentation of the fact that prescription information entered into the computer is correct. In documenting this information, the pharmacy shall have the option to either:

(i)(A) Maintain a bound log book, or separate file, in which each individual pharmacist involved in the dispensing shall sign a statement each day, attesting to the fact that the prescription information entered into the computer that day has been reviewed and is correct as shown. The book or file must be maintained at the pharmacy employing such a that system for a period of at least two (2) years after the date of last dispensing; or

(ii)(B) Provide a printout of each day's prescription information. That printout shall be verified, dated, and signed by the individual pharmacist verifying that the information indicated is correct. The printout must be maintained at least two (2) years from the date of last dispensing.

(4) An auxiliary record keeping system shall be established for the documentation of refills, if the automated data processing system is inoperative for any reason. The auxiliary system shall ensure that all refills are authorized by the original prescription, and that the maximum number of refills is not exceeded. When this automated data processing system is restored to operation, the information regarding prescriptions filled and refilled during the inoperative period, shall be entered into the automated data processing system within ninety-six (96) hours.

(5) Any pharmacy using an automated data processing system must comply with all applicable state and federal laws and regulations.

(6) A pharmacy shall make arrangements with the supplier of data processing services or materials to ensure that the pharmacy continues to have adequate and complete prescription and dispensing records if the relationship with such the supplier terminates for any reason. A pharmacy shall ensure continuity in the maintenance of records.

(7) The automated data processing system shall contain adequate safeguards for security of the records, to maintain the confidentiality and accuracy of the prescription information. Safeguards against unauthorized changes in data after the information has been entered and verified by the registered pharmacist shall be provided by the system.

(l) Prescriptions for controlled substances as found in schedules II, III and IV of § 21-28-2.08 will become void unless dispensed within thirty (30) days of the original date of the prescription. The prescriptions in schedules III, IV, and V cannot be written for more than one hundred (100) dosage units and not more than one hundred (100) dosage units may be dispensed at one time. For purposes of this section, a dosage unit shall be defined as a single capsule, tablet or suppository, or not more than one (1) teaspoon of an oral liquid.

(m) Prescriptions for controlled substances as found in schedule II may be written for up to a 30-day supply, with a maximum of two hundred and fifty (250) dosage units, as determined by the prescriber's directions for use of the medication. In no event shall more than a 30-days' supply, up to a maximum of two hundred and fifty (250) dosage units, be dispensed at one time.

 

            21-28-4.01. Prohibited acts A - Penalties. -- (a)(1) Except as authorized by this chapter, it shall be unlawful for any person to manufacture, deliver, or possess with intent to manufacture or deliver a controlled substance.

(2)(1) Any person who is not a drug dependent person, as defined in § 21-28-1.02(15) 21-28-1.02(18), who violates this subsection with respect to a controlled substance classified in schedule I or II, except the substance classified as marijuana, is guilty of a crime and upon conviction may be imprisoned to a term up to life, or fined not more than five hundred thousand dollars ($500,000) nor less than ten thousand dollars ($10,000), or both.

(3) Provided, however, that Where the deliverance as prohibited herein in this subsection shall be the proximate cause of death to the person to whom the controlled substance is delivered, it shall not be a defense that the person delivering the substance was at the time of delivery, a drug dependent person as defined in § 21-28-1.02(15) 21-28-1.02(18).

(4)(2) Any person, except as provided for in subsection (A)(1) subdivision (2) of this subsection, who violates this subsection with respect to:

(i)(a) A controlled substance classified in schedule I or II, is guilty of a crime and upon conviction may be imprisoned for not more than thirty (30) years, or fined not more than one hundred thousand dollars ($100,000) nor less than three thousand dollars ($3,000), or both;

(ii)(b) A controlled substance classified in schedule III or IV, is guilty of a crime and upon conviction may be imprisoned for not more than twenty (20) years, or fined not more than forty thousand dollars ($40,000), or both; provided, however, with respect to a controlled substance classified in schedule III(d), upon conviction may be imprisoned for not more than five (5) years, or fined not more than twenty thousand dollars ($20,000), or both.

(iii)(c) A controlled substance classified in schedule V, is guilty of a crime and upon conviction may be imprisoned for not more than one year, or fined not more than ten thousand dollars ($10,000), or both.

(b)(1) Except as authorized by this chapter, it is unlawful for any person to create, deliver, or possess with intent to deliver, a counterfeit substance.

(2)(1) Any person who violates this subsection with respect to:

(i)(a) A counterfeit substance classified in schedule I or II, is guilty of a crime and upon conviction may be imprisoned for not more than thirty (30) years, or fined not more than one hundred thousand dollars ($100,000), or both;

(ii)(b) A counterfeit substance classified in schedule III or IV, is guilty of a crime and upon conviction may be imprisoned for not more than twenty (20) years, or fined not more than forty thousand dollars ($40,000), or both; provided, however, with respect to a controlled substance classified in schedule III(d), upon conviction may be imprisoned for not more than five (5) years, or fined not more than twenty thousand dollars ($20,000) or both.

(iii)(c) A counterfeit substance classified in schedule V, is guilty of a crime and upon conviction may be imprisoned for not more than one year, or fined not more than ten thousand dollars ($10,000), or both.

(c)(1) It shall be unlawful for any person knowingly or intentionally to possess a controlled substance, unless the substance was obtained directly from or pursuant to, a valid prescription or order of a practitioner while acting in the course of his or her professional practice, or except as otherwise authorized by this chapter.

(2)(1) Any person who violates this subsection with respect to:

(i)(a) A controlled substance classified in schedules I, II and III, IV, and V, except the substance classified as marijuana, is guilty of a crime and upon conviction may be imprisoned for not more than three (3) years or fined not less than five hundred dollars ($500) nor more than five thousand dollars ($5,000), or both;

(ii)(b) A controlled substance classified in schedule I as marijuana is guilty of a misdemeanor and upon conviction may be imprisoned for not more than one year or fined not less than two hundred dollars ($200) nor more than five hundred dollars ($500), or both.;

(3)(2) Additionally every person convicted or who pleads nolo contendere under subsection (C)(1)(a) paragraph (2)(i) of this subsection or convicted or who pleads nolo contendere a second or subsequent time under subsection (C)(1)(b) above paragraph (2)(ii) of this subsection, who is not sentenced to a term of imprisonment to serve for the offense, shall be required to:

(i)(a) Perform no less than one hundred (100) hours of community service;

(ii)(b) Be referred to Treatment Alternatives to Street Crime (TASC) to determine the existence of problems of drug abuse. Should TASC determine the person needs treatment, it will arrange for said the treatment to be provided and after completion of said the treatment, the person shall perform his or her required community service and attend the drug education program;.

(iii)(c) Attend and complete a drug counseling and education program as prescribed by the director of the department of health and pay the sum of four hundred dollars ($400) to help defray the costs of this program which shall be deposited as general revenues. Failure to attend may result after hearing by the court in jail sentence up to one year;

(iv)(d) The court shall not suspend any part or all of the imposition of the fee required by this subsection, unless the court finds an inability to pay;.

(v)(e) If the offense involves the use of any automobile to transport the substance or the substance is found within an automobile, then a person convicted or who pleads nolo contendere under those subsections paragraphs (2)(i) and (ii) of this subsection shall be subject to a loss of license for a period of six (6) months for a first offense and one year for each offense thereafter.

(4)(3) All fees assessed and collected pursuant to subsection (C)(2)(c) paragraph (3)(iii) of this subsection shall be deposited as general revenues and shall be collected from the person convicted or who pleads nolo contendere before any other fines authorized by this chapter.

(d) It shall be unlawful for any person to manufacture, distribute, or possess with intent to manufacture or distribute, an imitation controlled substance. Any person who violates this subsection is guilty of a crime, and upon conviction shall be subject to the same term of imprisonment and/or fine as provided by this chapter for the manufacture or distribution of the controlled substance which the particular imitation controlled substance forming the basis of the prosecution was designed to resemble and/or represented to be; but in no case shall the imprisonment be for more than five (5) years nor the fine for more than twenty thousand dollars ($20,000).

(e) It shall be unlawful for a practitioner to prescribe, order, distribute, supply, or sell an anabolic steroid or human growth hormone for: (1)(i) enhancing performance in an exercise, sport, or game, or (2)(ii) hormonal manipulation intended to increase muscle mass, strength, or weight without a medical necessity. Any person who violates this subsection is guilty of a misdemeanor and upon conviction may be imprisoned for not more than six (6) months or a fine of not more than one thousand dollars ($1,000), or both.

 

21-28-4.15. Employment of person under age eighteen (18). -- (a)(1) It shall be unlawful for any person eighteen (18) years of age or older to hire, employ or otherwise use any person under eighteen (18) years of age who is at least three (3) years his or her junior to manufacture, transport, carry, sell, prepare for sale or offer for sale a controlled substance; provided, however, that the provisions of this subsection shall not apply to individuals enrolled in a pharmacy training program approved by the director.

(b)(2) Any person who violates this section with respect to:

(1)(a) A controlled substance classified in schedules I and II, except the substance classified as marijuana, is guilty of a crime and upon conviction shall be imprisoned for not less than fifteen (15) years and may be imprisoned for a term up to life and fined not more than five hundred thousand dollars ($500,000). In all such cases, the justice imposing sentence shall impose a minimum sentence of fifteen (15) years imprisonment and may only impose a sentence less than that minimum if he or she finds that substantial and compelling circumstances exist which justify imposition of the alternative sentence. The finding may be based upon the character and background of the defendant, the corporation cooperation of the defendant with law enforcement authorities, the nature and circumstances of the offense, and/or the nature and quality of the evidence presented at trial. If a sentence which is less than imprisonment for a term of fifteen (15) years is imposed, the trial justice shall set forth on the record the circumstances which he or she found as justification for imposition of the lesser sentence;.

(2)(b) A controlled substance classified in schedule III or IV, is guilty of a crime and upon conviction may be imprisoned for not more than twenty (20) years or fined not more than forty thousand dollars ($40,000) or both;

(3)(c) A controlled substance classified in schedule V or marijuana, is guilty of a crime and upon conviction may be imprisoned for not more than one year or fined not more than ten thousand dollars ($10,000) or both.

 

            21-28-4.17.1. Assessment for drug education, counseling and treatment. -- Any person convicted of any offense under Article IV of the Uniform Controlled Substances Act this article, other than the possession offenses described in § 21-28-4.01(c), shall, in addition to any other sentence and/or fine imposed, be assessed four hundred dollars ($400) by the court and the assessment shall be collected from the person convicted before any other fines authorized by this chapter. The court shall not suspend any part or all of the imposition of the assessment required by this subsection, unless the court finds an inability to pay. The assessment shall be deposited in the "drug education, assessment and treatment account" to be used by the department of mental health, retardation and hospitals (MHRH) and the department of health for the purposes provided for in § 21-28-4.01(C)(3) purpose of administration, drug education, and treatment.

21-28-5.04. Forfeiture of property and money. -- (a) Any property, real or personal, including, but not limited to, vessels, vehicles, or aircraft, and money or negotiable instruments, securities, or other things of value or any property constituting, or derived from any proceeds, furnished or intended to be furnished by any person for the transportation of or in exchange for a controlled substance and which has been or is being used in violation of § 21-28-4.01(a) or (b) or in, upon or by means of which any violation of § 21-28-4.01(a) or (b) or § 21-28-4.01.1 or § 21-28-4.01.2 has taken or is taking place, and all real property including any right, title, and interest in the whole of any lot or tract of land and any appurtenances or improvements, which is used in the commission of a violation of § 21-28-4.01(a) or (b) or § 21-28-4.01.1 or § 21-28-4.01.2, or which was purchased with funds obtained as a result of the commission of a violation of § 21-28-4.01(a) or (b) or § 21-28-4.01.1 or § 21-28-4.01.2, shall be seized and forfeited; provided that no property or money, as enumerated above, used by any person shall be forfeited under the provisions of this chapter unless it shall appear that the owner of the property or money had knowledge, actual or constructive, and was a consenting party to the alleged illegal act. All moneys, coin and currency, found in close proximity to forfeitable controlled substances, to forfeitable drug manufacturing or distributing paraphernalia, or to forfeitable records of the importation, manufacture, or distribution of controlled substances, are presumed to be unlawfully furnished in exchange for a controlled substance or otherwise used in violation of this chapter. The burden of proof is upon claimants of the property to rebut this presumption.

(b) Property taken or detained under this section shall not be repleviable, but shall be deemed to be in the custody of the law enforcement agency making the seizure and whenever property or money is forfeited under this chapter it shall be utilized as follows:

(1) Where the seized property is a vessel, vehicle, aircraft, or other personal property it may be retained and used by the law enforcement agency that seized the property where the use of the property is reasonably related to the law enforcement duties of the seizing agency. If the seized property is a motor vehicle which is inappropriate for use by law enforcement agency due to style, size, or color, the seizing agency shall be allowed to apply the proceeds of sale or the trade in value of the vehicle towards the purchase of an appropriate vehicle for use for activities reasonably related to law enforcement duties.

(2) The law enforcement agency may sell any forfeited property which is not required by this chapter to be destroyed and which is not harmful to the public. The proceeds from the sale are to be distributed in accordance with subdivision (3) of this subsection.

(3) As to the proceeds from the sale of seized property as referred to above in subsection (b)(2) subdivision (2) of this subsection and as to moneys, coin and currency, negotiable instruments, securities, or other things of value as referred to in subsection (a) of this section, the distribution shall be as follows:

(i)(A)(A) (i) All proceeds of the forfeiture of real or personal property shall be distributed as follows: All costs of advertising administrative forfeitures shall first be deducted from the amount forfeited. Of the remainder, twenty percent (20%) of the proceeds shall be provided to the attorney general's department to be used for further drug-related law enforcement activities including, but not limited to, investigations, prosecutions and the administration of this chapter; seventy percent (70%) of the proceeds shall be divided among the state and local law enforcement agencies proportionately based upon their contribution to the investigation of the criminal activity related to the asset being forfeited; and ten percent (10%) of the proceeds shall be provided to the department of health for distribution to substance abuse treatment programs.

(B)(ii) The law enforcement agencies involved in the investigation with the assistance of the attorney general shall by agreement determine the respective proportionate share to be received by each such agency. If the agencies are unable to reach agreement, application shall be made by one or more of the agencies involved to the presiding justice of the superior court, who shall determine the respective proportionate share attributable to each law enforcement agency. The proceeds from all forfeitures shall be held by the general treasurer in a separate account until such time as an allocation is determined by agreement of the agencies or by the presiding justice. It shall be the duty and responsibility of the general treasurer to disburse the allocated funds from the separate account to the respective law enforcement agencies.

(ii)(B) Each state or local law enforcement agency shall be entitled to keep the forfeited money or the proceeds from sales of forfeited property. The funds shall be used for law enforcement purposes and investigations of violations of this chapter. The funds received by a state law enforcement agency shall be maintained in a separate account by the general treasurer. The funds received by a local law enforcement agency shall be maintained in a separate account by the local agency's city or town treasurer.

(c)(1) There is hereby established in the state's treasury a special fund to be known as the asset forfeiture fund in which shall be deposited the excess proceeds of forfeitures arising out of criminal acts occurring before July 1, 1987. The asset forfeiture fund shall be used to fund drug-related law enforcement activity and the treatment and rehabilitation of victims of drug abuse. The fund shall be administered through the office of the general treasurer. The presiding justice of the superior court shall have the authority to determine the feasibility and amount of disbursement to those state or local law enforcement agencies which have made application.

(2) Upon the application of any law enforcement agency of the state of Rhode Island when a special need exists concerning the enforcement of the provisions of this chapter, the attorney general or his or her designee may apply to the presiding justice of the superior court for the release from the general treasury sums of money. When the presiding justice upon consideration of the reasons set forth by that agency deems them to be reasonable and necessary to the accomplishment of a goal within the powers and duties of that law enforcement agency, he or she may issue an order ex parte providing for the release of the funds.

(d) Each law enforcement agency making any seizure(s) which result(s) in a forfeiture pursuant to this section shall certify and file with the state treasurer between January 1 and January 30 an annual report detailing the property or money forfeited during the previous calendar year and the use or disposition of the property or money. The report shall be made in such the form and manner as may be provided or specified by the treasurer and the aforementioned annual law enforcement agency reports shall be provided to the local governmental body governing the agency and to the house and senate judiciary committees.

(e) Any law enforcement agency whose duty it is to enforce the laws of this state relating to controlled substances is empowered to authorize designated officers or agents to carry out the seizure provisions of this chapter. It shall be the duty of any officer or agent so authorized or designated or authorized by law, whenever he or she shall discover any property or monies which have been or are being used in violation of any of the provisions of this chapter, or in, upon or by means of which any violation of this chapter has taken or is taking place, to seize such the property or monies and to place it in the custody of such the person as may be authorized or designated for that purpose by the respective law enforcement agency pursuant to those provisions.

 

            21-28-5.05. Forfeiture of controlled substances, related materials and other property, equipment and records. -- (a) The following shall be subject to forfeiture to the state and no property right shall exist in them:

(1) All controlled substances which have been manufactured, distributed, dispensed, or acquired in violation of this chapter.

(2) All raw materials, products, and equipment of any kind which are used, or intended for use, in manufacturing, compounding, processing, delivering, importing, or exporting any controlled substance in violation of this chapter.

(3) All property which is used, or intended for use, as a container for property described in subsection (a)(1) or (2) subdivision (1) or (2) of this subsection, subject to the limitations of § 21-28-5.04.

(4) All books, records and research, including formulas, microfilm, tapes, and data which are used, or intended for use, in violation of this chapter.

(5) All imitation controlled substances which have been manufactured, distributed, or acquired in violation of this chapter.

(b) Property taken or detained under this section shall not be repleviable, but shall be deemed to be in the custody of the law enforcement agency making the seizure. Whenever property is forfeited under this chapter the law enforcement agency may:

(1) Retain the property for official use;

(2) Sell any forfeited property which is not required by this chapter to be destroyed and which is not harmful to the public, but the proceeds of the sale, after first deducting an amount sufficient for all proper expenses of the proceedings for forfeiture and sale, including expenses of seizure, maintenance of custody, advertising, and court costs, shall be paid to the general treasurer for the use thereof of the state.

21-28-5.07. Disposition of controlled substances. -- (a) Any person lawfully in possession of excess or undesired controlled substances shall dispose of such the controlled substances in a manner established in regulation by the director which shall include, but not be limited to, requirements that such the person shall keep a full and complete record of all controlled substances received and of all controlled substances disposed of, showing: (1) the exact kinds, quantities, and forms of the controlled substances; (2) the persons from whom received and to whom delivered;, (3) by whose authority received, delivered, and destroyed; and (4) the date of the receipt, disposal or destruction, which record shall be open to inspection by all federal or state officers, including the director of health and the director's delegated personnel, charged with the enforcement of federal law or of this chapter.

(b) [Deleted by P.L. 1997, ch. 30, art. 28, § 5.] Controlled substances and imitation controlled substances seized by or in the possession of the Rhode Island state police shall be distributed or destroyed as hereinafter provided by regulation. The superintendent of state police shall keep a full and complete record of all controlled substances received and of all controlled substances disposed of, showing: (1) the exact kinds, quantities, and forms of the controlled substances; (2) the persons from whom received and to whom delivered; (3) by whose authority received, delivered, and destroyed; and (4) the dates of the receipt, disposal, or destruction, which record shall be open to inspection by all federal or state officers charged with the enforcement of federal law or of this chapter.

(c) Controlled substances and imitation controlled substances seized by or in the possession of any municipal or state law enforcement agency other than the Rhode Island state police shall be distributed or destroyed as hereinafter provided by regulation. The chief law enforcement official of each such agency shall keep a full and complete record of all controlled substances received and of all controlled substances disposed of, showing: (1) the exact kinds, quantities, and forms of the controlled substances; (2) the persons from whom received and to whom delivered; (3) by whose authority received, delivered, and destroyed; and (4) the dates of the receipt, disposal, or destruction, which record shall be open to inspection by all federal or state officers charged with the enforcement of federal law or of this chapter.

(d) The director of health or his or her designee is authorized: (1) to enter any premises where controlled substances are brought for disposal pursuant to this section; (2) to inspect any and all aspects of the disposal process and related records; and (3) to obtain and test samples of any and all controlled substances being processed for disposal for the purpose of determining compliance with state and federal law.

 

21-28-5.07.2. Issuance of orders. -- Upon such an application as provided in § 21-28-5.07.1 the presiding justice of the superior court, or the senior associate justice of the superior court when the presiding justice shall disqualify himself or herself from entering such the order, may enter an ex parte order, authorizing the use of controlled substances seized as contraband if the justice determines on the basis of the evidence submitted that:

(1) There is probable cause to believe that a particular, identified individual is committing, has committed or is about to commit a particular designated offense;

(2) It has been demonstrated that the use of such the controlled substances will assist law enforcement officials in the investigation of felony violations of the uniform controlled substances act this chapter or felony violations of other criminal laws of this state and that normal investigative procedures have been tried and have failed or reasonably appear to be unlikely to succeed if tried or to be too dangerous.

 

            21-28-5.07.3. Disclosure. -- Notwithstanding the decision of the justice, any materials submitted or testimony offered pursuant to § 21-28-5.07.1 shall be kept under seal and not available for inspection, except after hearing by the issuing justice who shall determine, prior to their release, that the sealing of the records is no longer necessary for the protection of the integrity of the investigation or the protection of any sources of information which contributed to the investigation will not be compromised thereby by the release.

 

            21-28-5.07.4. Control of controlled substance. -- (a) Any controlled substance which has been authorized to be used by the state police, local police or investigator appointed pursuant to § 42-9-8.1 designated by the attorney general in investigations of controlled substance violations, shall be kept under the physical control of the requesting law enforcement agency until the said controlled substance is to be used in an investigation.

(b) When used in an investigation, at no time shall any substantial amount of the controlled substance be physically delivered to a person unless the police intend to and are able to immediately arrest said the person to whom the controlled substance was delivered for commission of a felony criminal offense.

(c) Upon final disposition of all matters regarding the use of any controlled substances in accordance with this section § 21-28-5.07.1, such the controlled substance shall be destroyed in accordance with the provisions of § 21-28-5.07.

 

            21-28-5.07.5. Rules and regulations. -- The department of attorney general shall promulgate rules and regulations in furtherance of the administration of their his or her responsibilities pursuant to this chapter and concerning the custody and control of all controlled substances utilized pursuant to this section § 21-28-5.07.1 and no application for use of controlled substances shall be applied for until the rules and regulations have been formally approved by the attorney general.

 

            SECTION 55. Sections 21-28-6.01 and 21-28-6.02 of the General Laws in Chapter 21-28 entitled "Uniform Controlled Substances Act" are hereby repealed in their entirety.

 

21-28-6.01. Pending proceedings. (a) Prosecutions for any violations of law occurring prior to July 1, 1974, shall not be affected by these repealers or amendments, or abated by reason thereof of them.

(b) Civil seizures or forfeitures and injunctive proceedings commenced prior to July 1, 1974, shall not be affected by these repealers or amendments, or abated by reason thereof of them.

(c) All administrative proceedings pending before the department on July 1, 1974, shall be continued and brought to final determination in accord with laws and regulations in effect prior to July 1, 1974. Drugs placed under control prior to July 1, 1974, which are not listed within schedules I through V inclusive, shall automatically be controlled and listed in the appropriate schedule.

(d) The provisions of this chapter shall be applicable to violations of law, seizures and forfeiture, injunctive proceedings, administrative proceedings, and investigations which occur following July 1, 1974.

 

            21-28-6.02. Continuation of regulations. -- Any orders, rules and regulations which have been promulgated under any law affected by this chapter and which are in effect on June 30, 1974 shall continue in effect until notified, superseded, or repealed by the director.

21-28-5.04.2. Civil forfeiture procedure.

            SECTION 56. Section 21-28-5.04.2 of the General Laws in Chapter 21-28 entitled "Uniform Controlled Substances Act" is hereby amended to read as follows:       

21-28-5.04.2 Civil forfeiture procedure. -- (a) In addition to or in lieu of the criminal forfeiture procedures of this chapter, any property described in § 21-28-5.04 except as designated in subsection (b) of this section, is subject to civil forfeiture to the state. Civil forfeiture proceedings shall be in the nature of an action in rem and shall be governed by the civil rules for in rem proceedings.

(b) All property described in § 21-28-5.04 is subject to civil forfeiture except that:

(1) No conveyances used by any person as a common carrier in the transaction of business as a common carrier shall be forfeited under the provisions of this section unless it appears that the owner or other person in charge of the conveyance was a consenting party or privy to the covered offense charged;

(2) No conveyance shall be forfeited under the provisions of this section by reason of any act or omission established by the owner thereof of it to have been committed or omitted by any person other than the owner while the conveyance was unlawfully in the possession of a person other than the owner in violation of the criminal laws of this state or of the United States; and

(3) No property shall be forfeited under this section, to the extent of the interest of an owner, by reason of any act or omission established by that owner to have been committed or omitted without knowledge or consent of that owner.

(c) Property subject to forfeiture under this section may be seized by a law enforcement officer:

(1) Upon process issued pursuant to the Rules of Civil Procedure applicable to in rem proceedings;

(2) Upon process issued pursuant to a legally authorized search warrant; or

(3) Without such court process when:

(i)(A) The seizure is incident to a lawful arrest or search;

(ii)(B) The property subject to seizure has been the subject of a prior judgment in favor of the state in a controlled substance act;

(iii)(C) The law enforcement officer has probable cause to believe that the property is directly or indirectly dangerous to health or safety; or

(iv)(D) The law enforcement officer has probable cause to believe that the property is forfeitable under § 21-28-5.04.

(d) In the event of a seizure under § 21-28-5.04 the property shall not be subject to sequestration or attachment but is deemed to be in the custody of the law enforcement agency making the seizure, subject only to the order of the court. When property is seized under this section, pending forfeiture and final disposition, the law enforcement agency making the seizure may:

(1) Place the property under seal;

(2) Remove the property to a storage area for safekeeping;

(3) Remove the property to a place designated by the court; or

(4) Request another agency authorized by law to take custody of the property and remove it to an appropriate location within the jurisdiction of the court.

(e) As soon as practicable after seizure, the seizing agency shall conduct an inventory upon and cause the appraisal of the property seized.

(f) In the event of a seizure under this section, the seizing agency shall within thirty (30) days send to the attorney general a written request for forfeiture, which shall include a statement of all facts and circumstances including the names of all witnesses then known, the appraised value of the property and the statutory provision relied upon for forfeiture.

(g) The attorney general shall immediately examine the facts and applicable law of the cases referred to him or her pursuant to this section, and if it is probable that the property is subject to forfeiture shall forthwith immediately cause the initiation of administrative or judicial proceedings against the property. If, upon inquiry and examination, the attorney general determines that such those proceedings probably cannot be sustained or that justice does not require the institution of such the proceedings, he or she shall make a written report of such those findings, transmit a copy to the seizing agency, and forthwith immediately authorize the release of the property.

(h) If the value of any personal property seized does not exceed twenty thousand dollars ($20,000), the attorney general may forfeit the property administratively in the following manner:

(1) The attorney general shall provide notice of intention to forfeit property administratively by publication in a local newspaper of general circulation, one day per week for three (3) consecutive weeks.

(2) In addition, to the extent practicable, the attorney general shall provide notice by registered mail of intent to forfeit the property administratively to all known interested parties and all parties whose identity is reasonably subject to discovery who may have an interest in the property seized.

(3) Notice by publication and by mail shall include:

(i)(A) A description of the property;

(ii)(B) The appraised value of the property;

(iii)(C) The date and place of seizure;

(iv)(D) The violation of law alleged against the subject property;

(v)(E) The instructions for filing claim and cost bond or a petition for remission or mitigation; and

(vi)(F) A notice that the property will be forfeited to the state if a petition for remission or mitigation or a claim and cost bond has not been timely filed.

(4) Persons claiming an interest in the property may file petitions for remission or mitigation of forfeiture or a claim and cost bond with the attorney general within thirty (30) days of the final notice by publication or receipt of written notice, whichever is earlier.

(5) The attorney general shall inquire into the facts and circumstances surrounding petitions for remission or mitigation of forfeiture.

(6) The attorney general shall provide the seizing agency and the petitioner a written decision on each petition for remission or mitigation within sixty (60) days of receipt of the petition unless the circumstances of the case require additional time, in which case the attorney general shall notify the petitioner in writing and with specificity within the sixty (60) day period that the circumstances of the case require additional time and further notify the petitioner of the expected decision date.

(7) Any person claiming seized property under this subsection may institute de novo judicial review of the seizure and proposed forfeiture by timely filing with the attorney general a claim and bond to the state in the amount of ten percent (10%) of the appraised value of the property or in the penal sum of two hundred fifty dollars ($250), whichever is greater, with sureties to be approved by the attorney general, upon condition that in the case of forfeiture the claimant shall pay all costs and expenses of the proceedings at the discretion of the court. Upon receipt of the claim and bond, or if he or she otherwise so elects, the attorney general shall file with the court a complaint in rem in accordance with the procedures set forth in this section. Any funds received by the attorney general as cost bonds shall be placed in an escrow account pending final disposition of the case.

(8) If no petitions or claims with bonds are timely filed, the attorney general shall prepare a written declaration of forfeiture of the subject property to the state and dispose of the property in accordance with this chapter.

(9) If the petition is denied, the attorney general shall prepare a written declaration of forfeiture to the state and dispose of the property in accordance with this chapter and the attorney general's regulations, if any, promulgated thereunder pursuant to this chapter.

(10) A written declaration of forfeiture signed by the attorney general pursuant to this chapter shall be deemed to provide good and sufficient title to the forfeited property.

(i) If the value of any personal property seized exceeds twenty thousand dollars ($20,000), the attorney general shall file a complaint in rem against the property within twenty (20) days of the receipt of the report referred to in subsection (f) of this section and thereafter provide notice of intention to forfeit by publication in a local newspaper of general circulation for a period of at least once per week for three (3) consecutive weeks. The notice shall include:

(1)(A) A description of the property;

(2)(B) The appraised value of the property;

(3)(C) The date and place of seizure;

(4)(D) The violation of law alleged against the subject property.;

(j)(1) The case may be tried by a jury, if in the superior court, upon the request of either party, otherwise by the court, and the cause of forfeiture alleged being proved, the court which shall try the case shall enter upon judgment for the forfeiture and disposition of such the property according to law.

(2)(1) An appeal may be claimed by either party from any judgment of forfeiture rendered by the district court, to be taken in like manner as by defendants in criminal cases within the jurisdiction of the district court to try and determine, to the superior court for the same county in which the division of the district court rendering judgment is situated and like proceedings may be had therein as in cases of informations for forfeitures originally filed in that court.

(3)(2) The judgment of the superior court shall be final in all cases of such the forfeitures, whether originally commenced in that court or brought there by appeal, unless a new trial be ordered, for cause shown by the supreme court.

(k) The in rem action shall be brought in the district court if the value of the property seized is less than two hundred fifty thousand dollars ($250,000), otherwise the in rem action shall be brought in the superior court. The attorney general shall also, to the extent practicable, provide written notice of the action in rem to all known interested parties and all persons whose identity is reasonably subject to discovery who may have an interest in the property.

(l) Persons claiming an interest in the property may file claims against the property within thirty (30) days of the final notice by publication or receipt of written notice, whichever is earlier. The claims shall be filed and adjudicated in the manner set forth for petitions in criminal proceedings in § 21-28-5.04.1(f).

(m) If the property sought to be forfeited is real property, the attorney general shall file a complaint in rem in the superior court against the property. In addition to providing notice as required by this chapter, the attorney general shall file a lis pendens with respect to the property with the recorder of deeds in the city or town in which the property is located.

(n) Upon order of the court forfeiting the subject property to the state, the state shall have clear title to the forfeited property, and the attorney general may transfer good and sufficient title to any subsequent purchaser or transferee. Title to the forfeited property shall be deemed to have vested in the state upon the commission of the act giving rise to the forfeiture under this chapter.

(o) Upon entry of judgment for the claimant in any proceeding to forfeit property under this chapter, the property shall be returned forthwith immediately to the claimant. If it appears that there was reasonable cause for the seizure of or the filing of the complaint, the court shall cause a proper certificate thereof of that to be entered, and the claimant shall not, in that case, be entitled to costs or damages, nor shall the person or agency who made the seizure, nor the attorney general not nor the prosecutor, be liable to suit or judgment on account of the seizure, suit, or prosecution.

(p) In any action brought under this section, the state shall have the initial burden of showing the existence of probable cause for seizure or arrest of the property. Upon such a that showing by the state, the claimant shall have the burden of showing by a preponderance of evidence that the property was not subject to forfeiture under this section.

 

SECTION 57. Section 31-41.1-4 of the General Laws in Chapter 31-41.1 entitled "Adjudication of Traffic Offenses" is hereby amended to read as follows:

 

31-41.1-4. Schedule of violations. -- (a) The penalties for violations of the enumerated sections, listed in numerical order, correspond to the fines described; provided, however, those offenses for which punishments which may vary according to the severity of the offense, or punishment which require the violator to perform a service, shall be heard and decided by the traffic tribunal or municipal court. The following violations may be handled administratively through the method prescribed in this chapter; provided, however, this list is not exclusive and jurisdiction may be conferred on the traffic tribunal with regard to other violations.

 

 

VIOLATIONS SCHEDULE

 

Section of General Laws

 

Total Fine

08-08.2-02

DOT, DEM, or other agency and department violations

$50.00

24-10-17

Soliciting rides in motor vehicles

50.00

24-10-18

Backing up prohibited

50.00

24-10-20

Park and ride lots

50.00

31-03-12

Visibility of plates

50.00

31-03-18

Display of plates

50.00

31-03-32

Driving with expired registration

50.00

31-03-34

Failure to notify division of change of address

50.00

31-03-35

Notice of change of name

50.00

31-03-40

Temporary plates - dealer issued

50.00

31-04-03

Temporary registration - twenty (20) day bill of sale

50.00

31-07-01

Operating on foreign registration

50.00 up to $500.00

31-08-01

Operating without evidence of registration

50.00

31-10.0-10

Rules as to armed forces license

50.00

31-10.0-30

Driving on expired license

50.00

31-10.0-32

Notice of change of address

50.00

31-10.1-04

No motorcycle helmet (operator)

50.00

31-10.1-05

Motorcycle handlebar violation

50.00

31-10.1-06

No motorcycle helmet (passenger)

50.00

31-10.1-07

Inspection of motorcycle required

50.00

31-12-12

Local motor vehicle ordinance

50.00

31-13-04

Obedience to devices

50.00

31-13-06(3)(i)

Eluding traffic light

50.00

31-13-09

Flashing signals

50.00

31-13-11

Injury to signs or devices

50.00

31-14-01

Reasonable and prudent speed

50.00

31-14-03

Condition requiring reduced speed

50.00

31-14-09

Below minimum speed

50.00

31-14-12

Speed limit on bridges and structures

50.00

31-15-01

Leaving lane of travel

50.00

31-15-02

Slow traffic to right

50.00

31-15-03

Operator left of center

50.00

31-15-04

Overtaking on left

50.00

31-15-05(a)

Overtaking on right

50.00

31-15-06

Clearance for overtaking

50.00

31-15-07

Places where overtaking prohibited

50.00

31-15-08

No passing zone

50.00

31-15-09

One way highways

50.00

31-15-10

Rotary traffic islands

50.00

31-15-11

Laned roadway violation

50.00

31-15-12

Following too closely

50.00

31-15-12.1

Entering intersection

50.00

31-15-13

Crossing center section of divided highway

50.00

31-15-14

Entering or leaving limited access roadways

50.00

31-15-16

Use of emergency break-down lane for travel

50.00

31-16-01

Care in starting from stop

50.00

31-16-02

Manner of turning at intersection

50.00

31-16-04

U turn where prohibited

50.00

31-16-05

Turn signal required

50.00

31-16-06

Time of signaling turn

50.00

31-16-07

Failure to give stop signal

50.00

31-16-08

Method of giving signals

50.00

31-17-01

Failure to yield right of way

50.00

31-17-02

Vehicle turning left

50.00

31-17-03

Yield right of way (intersection)

50.00

31-17-04

Obedience to stop signs

50.00

31-17-05

Entering from private road or driveway

50.00

31-17-08

Vehicle within right of way, rotary

50.00

31-18-03

Right of way in crosswalks

50.00

31-18-05

Crossing other than at crosswalks

50.00

31-18-08

Due care by drivers

50.00

31-18-12

Hitchhiking

50.00

31-18-18

Right of way on sidewalks

50.00

31-19.0-03

Traffic laws applied to bicycles

50.00

31-19.0-20

Sale of new bicycles

50.00

31-19.0-21

Sale of used bicycles

50.00

31-19.1-02

Operating motorized bicycle on an interstate highway

50.00

31-19.2-02

Operating motorized tricycle on an interstate highway

50.00

31-20-01

Failure to stop at railroad crossing

50.00

31-20-02

Driving through railroad gate

50.00

31-20-09

Obedience to stop sign

50.00

31-21-04

Places where parking or stopping prohibited

50.00

31-21-14

Opening of vehicle doors

50.00

31-22-02

Improper backing up

50.00

31-22-04

Overloading vehicle

50.00

31-22-05

Violation of safety zone

50.00

31-22-06

Coasting

50.00

31-22-07

Following fire apparatus

50.00

31-22-08

Crossing fire hose

50.00

31-22-09

Throwing debris on highway - snow removal

50.00

31-22-11.5

Improper use of school bus

- not to exceed five hundred dollars ($500) for each day of improper use

31-22-22(b)

No child restraint

50.00

31-22-22(c)

Child restraint/seat belt but not in back seat

50.00

31-22-22(e), (l k)

No seat belt - passenger

50.00

31-22-22(f)

No seat belt operator

50.00

31-22-23 (b)

Tow trucks - proper identification

50.00 250.00

31-22-23 (c)

Tow trucks - "limited towing" identification

 

31-22-23 (c)

First offense

Not more than 100.00

31-22-23 (c)

Second offense

Not more than 250.00

31-22-23 (c)

Third offense

Not more than 500.00

31-22-24

Operation of interior lights

50.00

31-22-28 (b)

Transporting animals - first offense

Not more than 50.00

31-22-28 (b)

Second and subsequent offenses

Not more than 200.00

31-23-01(b)

U.S. department of transportation motor carrier safety rules and regulations

50.00 not less than 25.00 or more than 500.00

31-23-01 (b)(4)

Unauthorized removal of "out of service vehicle" sticker

100.00

31-23-01 (b)(5)

Operation of "out of service vehicle"

100.00

31-23-04

Brake equipment required

50.00

31-23-08

Horn required

50.00

31-23-10

Sirens prohibited

50.00

31-23-13

Muffler required

50.00

31-23-13.1

Altering height or operating a motor vehicle with an altered height

 50.00

31-23-14

Prevention of excessive fumes or smoke

50.00

31-23-15

Rear view mirror

50.00

31-23-16

Windshield and window stickers (visibility)

50.00

31-23-17

Windshield wipers

50.00

31-23-19

Metal tires prohibited

50.00

31-23-20

Protuberances on tires

50.00

31-23-26

Fenders and wheel flaps required

50.00

31-23-27

Rear wheel flaps on buses, trucks and trailers

50.00

31-23-29

Flares or red flag required over four thousand pounds (4,000 lbs.)

 50.00

31-23-38

Television receivers prohibited

50.00 not more than 100.00

31-23-40

Approved types of seat belt requirements

50.00

31-23-42.1

Special mirror - school bus

50.00

31-23-43

Chocks required (1 pair) - over four thousand pounds (4,000 lbs.)

50.00

31-23-45

Tire treads - defective tires

50.00

31-23-47

Slow moving emblem required

50.00

31-23-49

Transportation of gasoline - passenger vehicle

50.00

31-23-51 (1)

Operating bike or motor vehicle wearing ear phones (first offense)

50.00

31-23-51 (2)

Second offense

70.00

31-23-51 (3)

Third and subsequent offenses

140.00

31-24-01 through

31-24-53 54

Times when lights required

50.00

 

Safety lights required on food vending vehicles

 

31-24-05

Headlamp required on motorcycle

50.00

31-24-31

Flashing lights - permit required

50.00

31-24-34

Failure to dim lights

50.00

31-24-45

Red flag required, load projecting four feet (4') rear

50.00

31-25-03

Maximum width of one hundred and two inches (102") exceeded

50.00

31-25-04

Maximum height of one hundred sixty-two inches (162") exceeded

50.00

31-25-06

Maximum number and length of coupled vehicles

500.00

31-25-07

Load extending three feet (3') front, six feet (6') rear exceeded

50.00

31-25-09

Leaking load

50.00

31-25-10 (d)(1)

Fastening of load and covering - first offense

50.00 not more than 100.00

31-25-10 (d) (1)

Second and subsequent offenses

Not less than 100.00 or more than 500.00

31-25-11

Connections between coupled vehicles

50.00

31-25-12

Towing chain, twelve inch (12") square flag required

50.00

31-25-12.1 (b)(1)

Tow truck - use of lanes (first offense)

50.00

31-25-12.1 (b)(2)

Second offense

75.00

31-25-12.1 (b)(3)

Third offense and subsequent offenses

100.00

31-25-13

Axle load limit

150.00

31-25-14(d)(1)

Maximum weight and tandem axles

100.00

31-25-14(d)(2)

Maximum weight and tandem axles

100.00

31-25-14(d)(3)

Maximum weight and tandem axles

100.00

31-25-16(c)(1)

Maximum weight shown in registration

30.00 40.00 per thousand lbs. overweight or portion thereof

31-25-16(c)(2)

Maximum weight shown in registration

60.00 80.00 per thousand lbs. overweight or portion thereof

31-25-16(c)(3)

Maximum weight shown in registration

1,000 plus $60.00 per thousand pounds overweight or portion therof

31-25-17

Identification of trucks and truck-tractors (first offense)

50.00

31-25-24

Carrying and inspection of excess load limit

150.00

31-27-02.3

Refusal to take preliminary breath test

50.00

31-28-07(bd)(4)

Wrongful use of handicapped parking placard

100.00

31-28-07(df)

Handicapped parking space violation

 

31-28-07(f)(1)

First offense

75.00

31-28-07(f)(2)

Second offense

150.00

31-28-07(f)(3)

Third offense and subsequent offenses

300.00

31-28-07 (j)

Counterfeit handicapped parking placard

Up to $500.00

31-28-07.1(e)

Wrongful use of institutional handicapped parking placard

100.00

31-33-02

Failure to file accident report

50.00

31-36.1-17 (a)(1)

No fuel tax stamp (out-of-state) - first violation

50.00

31-36-17 (a)(2)

Second and subsequent violations

Not exceeding 100.00

31-38-03

No inspection sticker

50.00

31-38-04

Violation of inspection laws

50.00

31-45-01

Noise limits

50.00

31-45-05

Audio Systems

50.00

31-47.2-06

Heavy-duty vehicle emission inspections

 

31-47.2-06 (a)(1)

First offense

100.00

31-47.2-06 (a)(2)

Second offense

500.00

31-47.2-06 (a)(3)

Third offense

1,000.00

37-15-07(a)

Littering - first offense

Not less than 50.00 nor more than 500.00

37-15-07(b)

Littering - second offense

Not less than three hundred dollars ($300) nor more than five hundred dollars ($500)

39-12-26

Public carriers violation

50.00

 

SPEEDING

Fine

(A) One to fifteen miles per hour (1-15 mph) in excess of posted speed limit

$50.00

(B) Sixteen miles per hour (16 mph) in excess of posted speed limit with a fine of ten dollars ($10.00) per mile in excess of speed limit shall be assessed.

160.00 minimum

 

            (b) In addition to any other penalties provided by law, a judge may impose the following penalties for speeding:

(i) For speeds up to and including fifteen miles per hour (15 mph) over the posted speed limit on public highways, a fine as provided for in subsection (a) of this section for the first offense, ten dollars ($10.00) per mile for each mile in excess of the speed limit for the second offense if within twelve (12) months of the first offense, and fifteen dollars ($15.00) per mile for each mile in excess of the speed limit for the third and subsequent offense if within twelve (12) months of the first offense. In addition, the license may be suspended up to thirty (30) days.

(ii) For speeds in excess of fifteen miles per hour (15 mph) over the posted speed limit on public highways, a mandatory fine of ten dollars ($10.00) for each mile over the speed limit for the first offense, fifteen dollars ($15.00) per mile for each mile in excess of the speed limit for the second offense if within twelve (12) months of the first offense, and twenty dollars ($20.00) per mile for each mile in excess of the speed limit for the third and subsequent offense if within twelve (12) months of the first offense. In addition, the license may be suspended up to sixty (60) days.

(c) Any person charged with a violation who pays the fine administratively pursuant to chapter 8.2 of title 8 is not subject to any additional costs or assessments, including but not limited to the hearing fee established in § 8-18-4 or assessment for substance abuse prevention.

 

SECTION 58. Sections 27-25-10, 27-25-13, 27-25-19, 27-25-27 and 27-25-44 of the General Laws in Chapter 27-25 entitled "Rhode Island Fraternal Code" are hereby amended to read as follows:

 

27-25-10. Organization. -- A domestic society organized on or after January 1, 1985, shall be formed as follows:

(1) Seven (7) or more citizens of the United States, a majority of whom are citizens of this state, who desire to form a fraternal benefit society, may make, sign, and acknowledge before some officer competent to take acknowledgment of deeds, articles of incorporation, in which shall be stated:

(i) The proposed corporate name of the society, which shall not so closely resemble the name of any society or insurance company as to be misleading or confusing;

(ii) The purposes for which it is being formed and the mode in which its corporate powers are to be exercised. Those purposes shall not include more liberal powers than are granted by this chapter; and

(iii) The names and residences of the incorporators and the names, residences, and official titles of all the officers, trustees, directors, or other persons who are to have and exercise the general control of the management of the affairs and funds of the society for the first year or until the ensuing election at which all of the officers shall be elected by the supreme governing body, which election shall be held not later than one year from the date of the issuance of the permanent certificate of authority;

(2) The articles of incorporation, duly certified copies of the society's bylaws and rules, copies of all proposed forms of certificates, applications therefor for them, and circulars to be issued by the society and a bond conditioned upon the return to applicants of the advanced payments if the organization is not completed within one year, shall be filed with the commissioner of insurance, who may require any further information the commissioner deems necessary. The bond with sureties approved by the commissioner of insurance shall be in an amount, not less than three hundred thousand dollars ($300,000) nor more than one million five hundred thousand dollars ($1,500,000), as required by the commissioner of insurance. All documents filed are to be in the English language. If the purposes of the society conform to the requirements of this chapter and all of the provisions of the law have been complied with, the commissioner of insurance shall so certify, retain, and file the articles of incorporation and furnish the incorporators with a preliminary certificate of authority authorizing the society to solicit members;

(3) No preliminary certificate of authority granted under the provisions of this section shall be valid after one year from its date or after a further period, not exceeding one year, as may be authorized by the commissioner of insurance upon cause shown, unless the five hundred (500) applicants have been secured and the organization has been completed as herein provided in this section. The articles of incorporation and all other proceedings thereunder under the articles shall become null and void in one year from the date of the preliminary certificate of authority, or at the expiration of the extended period, unless the society shall have completed its organization and received a certificate of authority to do business;

(4) Upon receipt of a preliminary certificate of authority from the commissioner of insurance, the society may solicit members for the purpose of completing its organization, shall collect from each applicant the amount of not less than one regular monthly premium in accordance with its table of rates, and shall issue to each applicant a receipt for the amount so collected. No society shall incur any liability other than for the return of the advance premium, nor issue any certificate, nor pay, allow, or offer or promise to pay or allow, any benefit to any person until:

(i) Actual bona fide applications for benefits have been secured on not less than five hundred (500) applicants, and any necessary evidence of insurability has been furnished to and approved by the society;

(ii) At least ten (10) subordinate lodges have been established into which the five hundred (500) applicants have been admitted;

(iii) There has been submitted to the commissioner of insurance, under oath of the president or secretary or corresponding officer of the society, a list of the applicants, giving their names, addresses, date each was admitted, name and number of the subordinate lodge of which each applicant is a member, amount of benefits to be granted and premiums therefor for the benefits; and

(iv) It shall have been shown to the commissioner of insurance, by sworn statement of the treasurer or corresponding officer of the society, that at least five hundred (500) applicants have each paid in cash at least one regular monthly premium as herein provided in this section, which premiums in the aggregate shall amount to at least one hundred and fifty thousand dollars ($150,000). The advance premiums shall be held in trust during the period of organization and if the society has not qualified for a certificate of authority within one year, the premiums shall be returned to the applicant;

(5) The commissioner of insurance may make any examination and require any further information as the commissioner deems advisable. Upon presentation of satisfactory evidence that the society has complied with all of the provisions of law, the commissioner shall issue to the society a certificate of authority to that effect and that the society is authorized to transact business pursuant to the provisions of this chapter. The certificate of authority shall be prima facie evidence of the existence of the society at the date of the certificate. The commissioner of insurance shall cause a record of the certificate of authority to be made. A certified copy of the record may be given in evidence with like effect as the original certificate of authority; and

(6) Any incorporated society authorized to transact business in this state at the time this chapter becomes effective shall not be required to reincorporate.

 

27-25-13. Reinsurance. -- (a) A domestic society may, by a reinsurance agreement, cede any individual risk or risks in whole or in part to an insurer, other than another fraternal benefit society, having the power to make reinsurance and authorized to do business in this state, or, if not so authorized, one which is approved by the commissioner of insurance, but no society may reinsure substantially all of its insurance in force without the written permission of the commissioner of insurance. It may take credit for the reserves on the ceded risks to the extent reinsured, but no credit shall be allowed as an admitted asset or as a deduction from liability, to a ceding society for reinsurance made, ceded, or renewed, or otherwise becoming effective after January 1, 1985, unless the reinsurance is payable by the assuming insurer on the basis of the liability of the ceding society under the contract or contracts reinsured without diminution because of the insolvency of the ceding society.

(b) Notwithstanding the limitation in subsection (a) of this section, a society may reinsure the risks of another society in a consolidation or merger approved by the commissioner of insurance under § 27-25-14.

 

            27-25-19. The benefit contract. -- (a) Every society authorized to do business in this state shall issue to each owner of a benefit contract a certificate specifying the amount of benefits provided thereby by the contract. The certificate, together with any riders or endorsements attached thereto to it, the laws of the society, the application for membership, the application for insurance and declaration of insurability, if any, signed by the applicant, and all amendments to each, shall constitute the benefit contract, as of the date of issuance, between the society and the owner, and the certificate shall so state. A copy of the application for insurance and declaration of insurability, if any, shall be endorsed upon or attached to the certificate. All statements on the application shall be representations and not warranties. Any waiver of this provision shall be void.

(b) Any changes, additions, or amendments to the laws of the society duly made or enacted subsequent to the issuance of the certificate, shall bind the owner and the beneficiaries, and shall govern and control the benefit contract in all respects the same as though those changes, additions, or amendments had been made prior to and were in force at the time of the application for insurance, except that no change, addition, or amendment shall destroy or diminish benefits which the society contracted to give the owner as of the date of issuance.

            (c) Any person upon whose life a benefit contract is issued prior to attaining the age of majority shall be bound by the terms of the application and certificate and by all the laws and rules of the society to the same extent as though the age of majority had been attained at the time of application.

(d) A society shall provide in its laws that if its reserves as to all or any class of certificates become impaired its board of directors or corresponding body may require that there shall be paid by the owner to the society the amount of the owner's equitable proportion of the deficiency as ascertained by its board, and that if the payment is not made either (1) it shall stand as an indebtedness against the certificate and draw interest not to exceed the rate specified for certificate loans under the certificates; or (2) in lieu of or in combination with clause subdivision (1) of this subsection, the owner may accept a proportionate reduction in benefits under the certificate. The society may specify the manner of the election and which alternative is to be presumed if no election is made.

(e) Copies of any of the documents mentioned in this section, certified by the secretary or corresponding officer of the society, shall be received in evidence of the terms and conditions thereof of the documents.

(f) No certificate shall be delivered or issued for delivery in this state unless a copy of the form has been filed with the commissioner of insurance in the manner provided for like policies issued by life insurers in this state. Every life, accident, health, or disability insurance certificate and every annuity certificate issued on or after January 1, 1986, shall meet the standard contract provision requirements not inconsistent with this chapter for like policies issued by life insurers in this state, except that a society may provide for a grace period for the payment of premiums of one full month in its certificate. The certificate shall also contain a provision stating the amount of premiums which are payable under the certificate and a provision reciting or setting forth the substance of any sections of the society's laws or rules in force at the time of issuance of the certificate which, if violated, will result in the termination or reduction of benefits payable under the certificate. If the laws of the society provide for expulsion or suspension of a member, the certificate shall also contain a provision that any member so expelled or suspended, except for nonpayment of a premium or within the contestable period for material misrepresentations in the application for membership or insurance, shall have the privilege of maintaining the certificate in force by continuing payment of the required premium.

(g) Benefit contracts issued on the lives of persons below the society's minimum age for adult membership may provide for the transfer of control or ownership to the insured at an age specified in the certificate. A society may require approval of an application for membership in order to effect this transfer, and may provide in all other respects for the regulation, government, and control of the certificates and all of the rights, obligations, and liabilities incident thereto to and connected therewith with the certificates. Ownership rights prior to the transfer shall be specified in the certificate.

(h) A society may specify the terms and conditions on which benefit contracts may be assigned.

27-25-27. Annual license. -- (a) The authority of existing societies and all societies hereafter licensed shall be continuous unless sooner revoked or suspended as provided in this chapter. For each license the society shall pay the commissioner of insurance one hundred dollars ($100). The society shall further pay a license fee of one hundred dollars ($100) annually prior to April 30 of each year. A duly certified copy or duplicate of the license shall be prima facie evidence that the licensee is a fraternal benefit society within the meaning of this chapter.

(b) The commissioner may assess a late fee of ten dollars ($10.00) per day for each day the society is late in remitting its annual license fee.

 

27-25-44. Fraternal benefit society assessment. -- (a) Notwithstanding any other provisions of law, each domestic fraternal benefit society shall be charged an assessment to partially support the activities of the division of insurance in the department of business regulation.

(b) Commencing in fiscal year 1990-1991, Each society's assessment shall be determined in accordance with the following ratio: (1) by dividing the society's total direct premiums, including annuities, less policyholder dividends by total direct premiums, including annuties annuities, less policyholder dividends of all domestic insurance companies plus the total direct premiums of domestic companies licensed or regulated pursuant to chapters 19, 20, 20.1, 20.2, 20.3, 25, and 41 of this title, and chapter 62 of title 42, and then by (2) multiplying the resulting ratio times two hundred thousand dollars ($200,000).

(c) The minimum assessment charged shall be the greater of the sum determined by subsection (b) of this section or one thousand dollars ($1,000).

 

SECTION 59. Section 27-29-11 of the General Laws in Chapter 27-29 entitled "Unfair Competition and Practices" is hereby amended to read as follows:

 

27-29-11. Immunity from prosecution. -- If any person shall ask to be excused from attending and testifying or from producing any books, papers, records, correspondence or other documents at any hearing on the ground that the testimony or evidence required may tend to incriminate or subject the person to a penalty or forfeiture, and shall notwithstanding be directed to give the testimony or produce the evidence, the person shall nonetheless comply with the direction, but shall not thereafter be prosecuted or subjected to any penalty or forfeiture for on account of any transaction, matter, or thing concerning on which the person may testify or produce evidence, thereto, and no testimony so given or evidence produced shall be received against the person upon any criminal action, investigation, or proceeding.; provided, however However, that no person so testifying shall be exempt from prosecution or punishment for any perjury committed while so testifying and the testimony or evidence so given or produced shall be admissible against the person upon any criminal action, investigation, or proceeding concerning that perjury, nor shall the person be exempt from the refusal, revocation, or suspension of any license, permission, or authority conferred, or to be conferred, pursuant to the insurance law of this state. Any person may execute, acknowledge, and file in the office of the commissioner a statement expressly waiving this immunity or privilege in respect to any transaction, matter, or thing specified in the statement and thereupon the testimony of the person or the evidence in relation to the transaction, matter, or thing may be received or produced before any judge or justice, court, tribunal, grand jury, or otherwise, and if so received or produced the person shall not be entitled to any immunity or privilege on account of any testimony the person may so give or evidence so produced.

 

SECTION 60. Section 27-32-8.1 of the General Laws in Chapter 27-32 entitled "Pension, Profit Sharing or Annuity Plans" is hereby amended to read as follows:

 

27-32-8.1. Individual variable life insurance. -- Notwithstanding the provisions of § 27-32-8, the provisions of §§ 27-4-14 and 27-4-15 shall not apply to a variable life insurance policy; provided, however, Any individual variable life insurance contract delivered or issued for delivery in this state shall contain nonforfeiture provisions appropriate to this a type of contract as approved by the director of business regulation.

 

SECTION 61. Sections 27-34-5, 27-34-7, 27-34-8 and 27-34-9 of the General Laws in Chapter 27-34 entitled "Rhode Island Insurers' Insolvency Fund" are 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 an insolvent insurer on December 31 of the year next preceding the date the insurer becomes an insolvent insurer;

(3) "Claimant" means any insured making a first party claim or any person instituting a liability claim; provided that no person who is an affiliate of the insolvent insurer may be a claimant;

(4) "Commercial lines excess liability insurance" means any commercial lines liability insurance written over an underlying policy with policy limits of at least $300,000 or a self-insured retention of at least $300,000;

(5) "Commercial lines insurance" means any insurance to which this chapter applies which is not personal lines insurance;

(6) "Commissioner" means the commissioner of insurance;

(7) "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 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;

(8) "Covered claim" means 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 issued by an insurer, if the insurer becomes an insolvent insurer on or after July 1, 1988 and:

(i) 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 or insured is the state in which its principal place of business is located at the time of the insured event; or

(ii) The property from which the claim arises is permanently located in this state. "Covered claim" shall not include any amount:

(A) Awarded as punitive or exemplary damages;

(B) Sought as a return of premium under any retrospective rating plan; or

(C) Due any reinsurer, insurer, insurance pool, or underwriting association, as subrogation recoveries or otherwise; provided, that a claim for any amount, asserted against a person insured under a policy issued by an insurer which has become an insolvent insurer, which, if it were not a claim by or for the benefit of a reinsurer, insurer, insurance pool, or underwriting association, would be a "covered claim", may be filed directly with the receiver of the insolvent insurer, but in no event may any the claim be asserted against the insured of the insurer;

(9) "Fund" means the Rhode Island insurers' insolvency fund created under § 27-34-6;

(10) "Insolvent insurer" means an insurer licensed to transact in this state any of the kinds of insurance within the scope of this chapter, either at the time the policy was issued or when the insured event occurred, against which an order of liquidation with a finding of insolvency has been entered on or after July 1, 1988, by a court of competent jurisdiction in the insurer's state of domicile or in this state under the provision(s) of chapter 14.3 of this title which order of liquidation has not been stayed or been the subject of a writ of supersedeas or other comparable order;

(11) "Member insurer" means any person who:

(i) Writes any kind of insurance to which this chapter applies, including the exchange of reciprocal or interinsurance contracts; and

(ii) Is licensed to transact insurance in this state;

(12) " Net direct written premiums" means direct gross premiums written in this state on insurance policies to which this chapter applies, less return premiums thereon on those policies and dividends or unabsorbed premiums paid or credited to policyholders on the direct business. "Net direct written premiums" does not include premiums on contracts between insurers or reinsurers;

(13) "Person" means any individual, corporation, partnership, association, or voluntary organization;

(14) "Personal lines insurance" means any insurance to which this chapter applies issued for personal, family, or household purposes;

(15) "Pleasure craft" means watercraft, other than a seaplane on the water or a houseboat, not greater than thirty-five (35) feet in length used solely for pleasure and not used for:

(i) Charter or hire; or

(ii) To carry persons or property for fee or any commercial use; and

(16) "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.

 

27-34-7. Board of directors. -- (a) The board of directors of the fund shall consist of not less than five (5) nor more than nine (9) persons serving terms as established in the plan of operation. The members of the board shall be selected by member insurers subject to the approval of the commissioner. Vacancies on the board shall be filled for the remaining period of the term by a majority vote of the remaining board members subject to the approval of the commissioner. If no members are selected within sixty (60) days after July 1, 1988, the commissioner may appoint the initial members of the board of directors.

(b) In approving selections to the board, the commissioner shall consider among other things whether all member insurers are fairly represented.

(c) Members of the board of directors may be reimbursed from the assets of the fund for expenses incurred by them as members of the board of directors.

27-34-8. Powers and duties of the fund. -- (a) The fund shall:

(1) Be obligated to pay covered claims existing prior to the determination of the insolvency of a member insurer or arising within sixty (60) days after the determination of the insolvency or before the policy expiration date if less than sixty (60) days after the determination of insolvency or before the insured replaces the policy or causes its cancellation if he or she does so within sixty (60) days of the determination. The

obligations shall be satisfied by paying to the claimant an amount as follows:

(i) The full amount of a covered claim for benefits under a workers' compensation insurance coverage;

(ii) An amount not exceeding ten thousand dollars ($10,000), per policy for a covered claim for the return of unearned premium;

(iii) An amount not exceeding three hundred thousand dollars ($300,000), per claimant for all other covered claims. In no event shall the fund be obligated to pay a claimant an amount in excess of the obligation of the insolvent insurer under the policy or coverage from which the claim arises. Notwithstanding any other provision of this chapter, a covered claim shall not include any claim filed with the fund after the final date set by the court for the filing of claims against the liquidator or receiver of an insolvent insurer. The fund shall pay only that amount of each unearned premium, which is in excess of one hundred dollars ($100);

(2) Be deemed the insurer to the extent of its obligation on the covered claims and to that extent shall have all of the rights, duties and obligations of the insolvent insurer as if the insurer had not become insolvent;

(3) Allocate claims paid and expenses incurred among the three (3) accounts separately, and assess member insurers separately for each account amounts necessary to pay the obligations of the fund under subsection (a) subdivision (1) of this subsection subsequent to an insolvency, the expenses of handling covered claims subsequent to an insolvency and other expenses authorized by this chapter. The assessments of each member insurer shall be in the proportion that the net direct written premiums of the member insurer for the calendar year preceding the assessment on the kinds of insurance in the account bears to the net direct written premiums of all member insurers for the calendar year preceding the assessment on the kinds of insurance in the account. Each member insurer shall be notified of the assessment not later than thirty (30) days before it is due. No member insurer may be assessed in any one year on any account an amount greater than two percent (2%) of that member insurer's net direct written premiums for the calendar year preceding the assessment on the kinds of insurance in the account. If the maximum assessment, together with the other assets of the fund in any account, does not provide in any one year in any account an amount sufficient to make all necessary payments from that account, each member insurer shall be assessed the additional amount that must be obtained to make all necessary payments of the underfunded account from the other two accounts, subject to the same limitation of two percent (2%) of that member insurer's net direct written premiums for the calendar year preceding the assessment on the kinds of insurance in the account, subject to the limitation that the ability to assess from different accounts to make all necessary payments from any underfunded account shall lapse on December 31, 1998. The additional assessments shall be considered loans by and between the separate accounts. Amounts borrowed under this subsection shall be paid back to the separate accounts from which they were borrowed, out of assets, including, but not limited to, existing and future assessments in the account receiving the loan. An interest charge shall be levied on all amounts borrowed under this subsection based on the average prime rate of interest for each year the money remains unpaid. If the amounts borrowed remain unpaid on the seventh yearly anniversary as a result of the inability of the borrowing account to make repayment, then the amount borrowed and interest which is not repaid, starting with the principal and interest of the first year, shall be considered uncollectible. The funds available shall be prorated and the unpaid portion shall be paid as soon thereafter as funds become available. The fund shall pay claims in any order which it deems reasonable, including the payment of claims as they are received from the claimants or in groups or categories of claims. The fund may exempt or defer, in whole or in part, the assessment of any member insurer if the assessment would cause the member insurer's financial statement to reflect amounts of capital or surplus less than the minimum amounts required for a certificate of authority by any jurisdiction in which the member insurer is authorized to transact insurance; provided, however, that. However, during the period of deferment, no dividends shall be paid to shareholders or policyholders. Deferred assessments shall be paid when the payment will not reduce capital or surplus below required minimums. The payments shall be refunded to those companies receiving larger assessments by virtue of the deferment, or, at the election of any company, credited against future assessments.

(4) Investigate claims brought against the fund and adjust, compromise, settle, and pay covered claims to the extent of the fund's obligation and deny all other claims, and may review settlements, releases, and judgments to which the insolvent insurer or its insureds were parties, to determine the extent to which the settlements, releases, and judgments may be properly contested;

(5) Notify the insureds as the commissioner directs under § 27-34-10(b)(1);

(6) Handle claims through its employees or through one or more insurers or other persons designated as servicing facilities. Designation of a servicing facility is subject to the approval of the commissioner, but the designation may be declined by a member insurer;

(7) Reimburse each servicing facility for obligations of the fund paid by the facility and for expenses incurred by the facility while handling claims on behalf of the fund and shall pay the other expenses of the fund authorized by this chapter; and

(8) (i) Within thirty (30) days after June 18, 1991 Obtain an irrevocable line of credit agreement from each member insurer in an amount not to exceed the member insurer's maximum assessment pursuant to subsection (a) subdivision (3) of this subsection to ensure the immediate availability of funds for the purposes of future claims and expenses attributable to an insurer insolvency;

(ii) Any amount drawn from the fund under any line of credit shall be considered a payment toward the member insurer's assessment provided for in subsection (a) subdivision (3) of this subsection;

(iii) The member insurer shall provide funding to the fund under the line of credit within three (3) business days of receipt of a written request from the fund for a draw-down under the line of credit;

(iv) The line of credit agreement shall be subject to prior review and approval by the commissioner at the time of origination and any subsequent renewal. It shall include any commercially reasonable provisions the fund or the commissioner may deem advisable, including a provision that the line of credit is irrevocable or for a stated period of time and provides for thirty (30) day notice to the fund and the commissioner that the line is being terminated or not renewed;

(v) If a line of credit is not given as provided for in this section, the member insurer shall be responsible for the payment of an assessment of up to the member's proportionate share of the applicable maximum as set forth in this subsection which shall be paid into a pre-insolvency assessment fund in each account.

(b) The fund may:

(1) Employ or retain those persons necessary to handle claims and perform other duties of the fund;

(2) Borrow funds necessary to effect the purposes of this chapter in accord with the plan of operation;

(3) Sue or be sued;

(4) Negotiate and become a party to any contracts necessary to carry out the purpose of this chapter;

(5) Perform any other acts necessary or proper to effectuate the purpose of this chapter; and

(6) Refund to the member insurers in proportion to the contribution of each member insurer to that account that amount by which the assets of the account exceed the liabilities, if, at the end of any calendar year, the board of directors finds that the assets of the fund in any account exceed the liabilities of that account as estimated by the board of directors for the coming year.

 

27-34-9. Plan of operation. -- (a) The fund shall submit to the commissioner a plan of operation and any amendments thereto to the plan necesssary necessary or suitable to assure the fair, reasonable, and equitable administration of the fund. The plan of operation and any amendments thereto to it shall become effective upon approval in writing by the commissioner.

(b) If the fund fails to submit a suitable plan of operation within ninety (90) days after July 1, 1988, or if at any time thereafter the fund fails to submit suitable amendments to the plan, the commissioner shall, after notice and hearing, adopt and promulgate any reasonable rules necessary or advisable to effectuate the provisions of this chapter. The rules shall continue in force until modified by the commissioner or superseded by a plan or amendments thereto to it submitted by the fund and approved by the commissioner.

(c) All member insurers shall comply with the plan of operation.

(d) The plan of operation shall:

(1) Establish the procedures where all of the powers and duties of the fund under § 27-34-8 will be performed;

(2) Establish the procedures for handling the assets of the fund;

(3) Establish the amount and method of reimbursing members of the board of directors under § 27-34-7;

(4) Establish procedures by which claims may be filed with the fund and establish acceptable forms of proof of covered claims. Notice of claims to the receiver or liquidator of the insolvent insurer shall be deemed notice to the fund or its agent, and a list of claims shall be periodically submitted to the fund or similar organization in another state by the receiver or liquidator;

(5) Establish regular places and times for meetings of the board of directors;

(6) Establish procedures for records to be kept of all financial transactions of the fund, its agents, and the board of directors;

(7) Provide that any member insurer aggrieved by any final action or decision of the fund may appeal to the commissioner within thirty (30) days after the action or decision;

(8) Establish the procedures whereby by which selections for the board of directors will be submitted to the commissioner; and

(9) Contain additional provisions necessary or proper for the execution of the powers and duties of the fund.

(e) The plan of operation may provide that any or all powers and duties of the fund, except those under §§ 27-34-8(a)(3) and 27-34-8(b)(2), may be delegated to a corporation, association, or other organization which performs or will perform functions similar to those of the fund, or its equivalent, in two or more states. That corporation, association, or organization shall be reimbursed as a servicing facility would be reimbursed and shall be paid for its performance of any other functions of the fund. A delegation under this subsection shall take effect only with the approval of both the board of directors and the commissioner, and may be made only to a corporation, association, or organization which extends protection not substantially less favorable and effective than that provided by this chapter.

 

SECTION 62. Section 21-28.2-3 of the General Laws in Chapter 21-28.2 entitled "Drug Abuse Control" is hereby amended to read as follows:

 

21-28.2-3. Admission of narcotic addict on civil certification. -- A justice of the family court or a judge of the district court may certify a narcotic addict to the care and custody of the department in the following manner:

(1)(a) Except as provided hereafter in this section, whenever any narcotic addict desires to obtain treatment for his or her addiction, whenever a related individual has reason to believe that any person is a narcotic addict, or whenever the director of health has reason to believe that any person is a narcotic addict, the addict, related individual, or director of health may apply for an order certifying that person to the care and custody of the department by presenting a verified petition setting forth knowledge, information, or belief that the person is a narcotic addict, together with a statement of the facts upon which that knowledge, information, or belief is based. When such a the petition is presented, the court may examine the petitioner, or any witness, under oath and shall determine whether there are reasonable grounds to believe that the person in whose behalf the application is made is a narcotic addict. If the court determines that there are reasonable grounds to believe that the person is a narcotic addict, and if the person is not also the petitioner, it shall issue an order in accordance with subdivision (b) (2) of this section; provided, however, that if the court further determines that the person would not comply with any such the order the court shall issue, in lieu of an order, a warrant in accordance with subdivision (c) (3) of this section. When the alleged addict is the petitioner and the court determines that there are reasonable grounds to believe that the person is a narcotic addict, the court shall immediately proceed in accordance with subdivision (d) (4) of this section. The state shall be a party in all proceedings pursuant to this section and shall act on the relation of the petitioner. The attorney general shall represent the state.

(2)(b) An order issued pursuant to this section shall direct the alleged narcotic addict to appear at a specified time before the court for a determination whether there are reasonable grounds to order that person to undergo a medical examination at a facility or by two (2) physicians designated by the director. The court shall direct that the order and petition be served upon the alleged narcotic addict personally or by registered mail and the court may further direct that the order and petition be served personally or by mail upon the husband or wife, father or mother, or next of kin of the alleged narcotic addict.

(3)(c) A warrant issued pursuant to this section shall be directed to any police officer in the state commanding the officer: (i) to take the alleged narcotic addict into custody, and (ii) to bring the alleged narcotic addict forthwith immediately before the court for a determination whether there are reasonable grounds to order him or her to undergo a medical examination at a facility designated by the department. If the court is not then in session, the alleged narcotic addict may be held at a facility designated by the department or at any other detention facility until the court is in session. In such a case, the head of the facility or a duly appointed representative shall advise the alleged addict of the nature of the proceeding, the reason for his or her detention, and that he or she will appear before a judge at the next court session in connection with the allegation that he or she is a narcotic addict. This person shall also inform the alleged addict that he or she has the right to the aid of counsel at every stage of the proceedings, and that if the person desires the aid of counsel and is financially unable to obtain counsel, counsel shall be assigned by the court, and that he or she is entitled to communicate free of charge, by telephone or letter, in order to obtain counsel and in order to inform a relative or friend of the proceeding. Such a The warrant may be executed on any day including Saturdays, Sundays, and holidays and the alleged narcotic addict shall not be subjected to any more restraint than is necessary for the purposes specified in the warrant. The police officer shall exhibit the warrant to the alleged narcotic addict, and inform the alleged addict of the purpose for which he or she is being taken into custody. The officer shall not break open any outer or inner door or window of a building, or any part of the building, or anything therein in a building, to execute the warrant unless, if, after notice of the officer's authority and purpose, he or she is refused admittance. The warrant must be executed within thirty (30) days after its date and if not so executed shall be void.

(4)(d) Upon the appearance of the alleged narcotic addict the court shall provide the alleged addict with a copy of any paper not yet served upon him or her and shall explain that, if the court finds reasonable grounds to believe that the person is a narcotic addict, it shall order him or her to undergo a medical examination at a facility or by two (2) physicians designated by the department. The court shall then advise the alleged narcotic addict that if such the medical examination is ordered the alleged addict shall appear before the court after such the examination as provided in subdivision (e)(1) paragraph (5)(i) of this section, and, if the petition and the report of the medical examination set forth reasonable grounds to believe that the person is a narcotic addict, he or she may thereafter be certified to the care and custody of the department for an indefinite period not exceeding three (3) years and that he or she shall have a right to a hearing prior to the certification. If the alleged narcotic addict appears without counsel, the court shall advise the person that he or she has the right to the aid of counsel at every stage of the proceedings, and that if he or she desires the aid of counsel and is financially unable to obtain counsel, then counsel shall be assigned. The court shall allow the alleged narcotic addict a reasonable time to send for counsel and shall adjourn the proceedings for that purpose. The court shall inform the alleged addict, if the person is being held in custody, that he or she is entitled to communicate free of charge, by letter or telephone, in order to obtain counsel and in order to inform a relative or friend of the proceeding. If the alleged narcotic addict does not desire the aid of counsel the court must determine that the person waived counsel having knowledge of the significance of his or her act. If the court is not satisfied that the alleged narcotic addict knows the significance of his or her act in waiving counsel, the court shall assign counsel.

(5) (i)(e) (1) If the court, after the appearance of the alleged addict, is satisfied that there are reasonable grounds to believe that the person is a narcotic addict it shall issue an order directing the person to appear on a specified date and place for a medical examination in accordance with § 21-28.2-4. of this chapter. A copy of this order shall be given to the person and a copy of the order and of any order or warrant issued in accordance with subdivisions (b), (c), or (f) (2), (3), or (6) of this section shall be furnished to the department.

(ii)(2) If the court has reason to believe that the person will fail to appear for the medical examination, the order shall make provision commanding any police officer of the state to take the person into custody and deliver him or her forthwith immediately to the place specified for the medical examination.

(iii)(3) Any order issued pursuant to this paragraph subdivision shall direct the person to appear before the court within seven (7) days, exclusive of Saturdays, Sundays, and holidays, after the person's admission for the medical examination.

(6)(f) If the alleged narcotic addict fails to appear as directed by an order pursuant to this section, and the court is satisfied that timely service has been made or that service cannot be effected with due diligence, it may issue a warrant directed to any police officer in the state commanding the officer: (i) to take the alleged narcotic addict into custody, and (ii) to bring such the alleged addict forthwith immediately to a specified place for a specific purpose, which shall be the place and purpose specified in the order. If the warrant commands the officer to bring the alleged addict to court and the court is not then in session, the alleged addict may be held at a facility designated by the department or at any other detention facility until the court is in session. The warrant shall be executed in the same manner and subject to the same restrictions as provided in subdivision (c) (3) of this section.

 

SECTION 63. Sections 21-30-6 and 21-30-7 of the General Laws in Chapter 21-30 entitled "Drugs and Poisons Generally" are hereby amended to read as follows:

 

21-30-6. Labeling of poisons - Registration of sales - Prescriptions. -- No person shall hereafter sell, either by wholesale or retail, any of the poisons enumerated in § 21-30-7, without distinctly labeling the bottle, box, vessel, or paper and wrapper or cover in which the poison is contained with the name of the article, the word "poison," and the name and place of business of the seller; and every registered pharmacist selling or dispensing any of these poisons shall first enter in a book, to be kept for that purpose only, and subject always to inspection by the board of pharmacy or any officer or agent thereof of the board or other proper authority, and to be preserved for at least five (5) years, a record of the sale or dispensing; in accordance with § 21-30-8 [Repealed.]; provided, that if any of the poisons form a part of the ingredients of any medicine or medicines compounded in accordance with the written prescription of a medical practitioner, the medicine need not be labeled with the word "poison"; but all prescriptions, whether or not composed in part or in whole of any of these ingredients, shall be carefully kept by the pharmacist on a file or in a book used for that purpose only and numbered in the order in which they are received or dispensed, and every box, bottle, vial, vessel, or packet containing medicines so dispensed shall be labeled with the name and place of business of the registered pharmacist so dispensing the medicine, and be numbered with a number corresponding with that on the original prescription retained by the pharmacist on the book or file. Such The prescriptions shall be preserved at least five (5) years and shall be open to the inspection of the writer thereof of them, and a copy shall be furnished free of expense whenever demanded by either the writer or the purchaser.

21-30-7. Poisons subject to labeling and registration. -- The following substances are poisons subject to labeling as provided in § 21-30-6:

(1)(a) Arsenic and its preparations.

(2)(b) Carbolic acid.

(3)(c) Corrosive sublimate.

(4)(d) Cotton root and its preparations.

(5)(e) Cyanide of potassium.

(6)(f) Ergot and its preparations.

(7)(g) Hydrocyanic acid.

(8)(h) Opium and its preparations, paregoric excepted.

(9)(i) Oxalic acid.

(10)(j) Savin.

(11)(k) Strychnia.

(12)(l) Volatile oil of bitter almonds, of pennyroyal, of savin, and of tansy.

(13)(m) Proprietary or secret medicines recommended, sold or advertised as emmenagogues and parturients.

 

SECTION 64. Sections 21-31-3 and 21-31-15 of the General Laws in Chapter 21-15 entitled "Rhode Island Food, Drugs, and Cosmetics Act" are hereby amended to read as follows:

21-31-3. Prohibited acts. -- The following acts and the causing thereof of those acts within the state of Rhode Island are hereby prohibited:

(1)(a) The manufacture, sale, or delivery, or holding or offering for sale of any food, drug, device, or cosmetic that is adulterated or misbranded.

(2)(b) The adulteration or misbranding of any food, drug, device, or cosmetic.

(3)(c) The receipt in commerce of any food, drug, device, or cosmetic that is adulterated or misbranded, and the delivery or proferred delivery thereof of it for pay or otherwise.

(4)(d) The sale, delivery for sale, holding for sale, or offering for sale of any article in violation of § 21-31-12 or 21-31-16.

(5)(e) The dissemination of any false advertisement.

(6)(f) The refusal to permit entry or inspection, or to permit the taking of a sample, as authorized by § 21-31-21.

(7)(g) The giving of a guaranty of undertaking which guaranty or undertaking is false, except by a person who relied on a guaranty or undertaking to the same effect signed by, and containing the name and address of, the person residing in the state of Rhode Island from whom he received in good faith the food, drug, device, or cosmetic.

(8)(h) The removal or disposal of a detained or embargoed article in violation of § 21-31-6.

(9)(i) The alteration, mutilation, destruction, obliteration, or removal of the whole or any part of the labeling of, or the doing of any other act with respect to, a food, drug, device, or cosmetic, if that act is done while the article is held for sale and results in the article's being adulterated or misbranded.

(10)(j) Forging, counterfeiting, simulating, or falsely representing, or without proper authority using, any mark, stamp, tag, label, or other identification device authorized or required by regulations promulgated under the provisions of this chapter.

(11)(k) The using, on the labeling of any drug or in any advertisement relating to the drug, of any representation or suggestion that any application with respect to the drug is effective under § 21-31-16, or that the drug complies with the provisions of that section.

(12)(i)(l) (1) No person shall possess The possession of any habit-forming, toxic, harmful, or new drug subject to § 21-31-15(k)(1) 21-31-15(a)(11)(i) unless the possession of that drug has been obtained by a valid prescription of a practitioner licensed by law to administer such those drugs; provided, that the provisions of this subdivision shall not be applicable to the delivery of such those drugs to persons included in any of the classes named below, or to the agents or employees of these persons, for use in the usual course of their official duties, as the case may be,; or to the possession of such those drugs by these persons or their agents or employees for that use: (A) pharmacists; (B) practitioners; (C) persons who procure such the drugs for disposition by or under the supervision of pharmacists or practitioners employed by them or for the purpose of lawful research, teaching, or testing, and not for resale; (D) hospitals or other institutions which procure such the drugs for lawful administration by practitioners; (E) officers or employees of federal, state, or local governments; (F) manufacturers and wholesalers lawfully engaged in selling such those drugs to authorized persons; and (G) common carriers and warehousemen warehouse operators while engaged in lawfully transporting or storing such the drugs for authorized persons.

(ii)(2) The possession of a drug under subdivision (l)(1) paragraph (i) of this section subdivision not properly labeled to indicate that possession is by a valid prescription of a practitioner licensed by law to administer the drug by any person not exempted under this chapter shall be prima facie evidence that the possession is unlawful; provided, that the provisions of this paragraph shall not be applicable where a portion of the whole amount of a drug lawfully obtained under the provisions of this chapter not in excess of an amount sufficient to meet the medical requirements of the patient in any twenty-four (24) consecutive hours, as indicated in the directions for use by the practitioner prescribing or dispensing the drug, is possessed in a container to suit the convenience of the patient.

(13)(m) The sale of all unprocessed and/or uncooked fish, shellfish, and scallops by retail markets and other retailers without a label indicating whether the fish, shellfish, or scallops have ever been frozen.

(14)(n) The making, issuing, or uttering of any false or forged prescription.

(15)(o) The processing or selling or holding for sale of any "distressed merchandise" in this state without a permit from the director of health.

(16)(p) The holding, selling, or offering for sale of any food (or drug) which has been condemned or voluntarily disposed of by action of the director of health.

(17)(q) Use of the term "native" unless used as defined in § 21-31-2. The retail consumer has a right to know and the retailer shall provide upon request the origin of nonnative uncooked and/or unprocessed shellfish and/or scallops.

21-31-15. Misbranded drug or device. -- (a) A drug or device shall be deemed to be misbranded:

(1)(a) If its labeling is false or misleading in any particular.

(2)(b) If in package form unless it bears a label containing: (i)(1) the name and place of business of the manufacturer, packer, or distributor; and (ii)(2) an accurate statement of the quantity of the contents in terms of weight, measure, or numerical count; provided, that under clause (2) paragraph (ii) of this subdivision reasonable variations shall be permitted, and exemptions as to small packages shall be established, by regulations prescribed by the director of health.

(3)(c) If any word, statement, or other information required by or under authority of this chapter to appear on the label or labeling is not prominently placed thereon on it with such conspicuousness (as compared with other words, statements, designs, or devices in the labeling) and in such terms as to render it likely to be read and understood by the ordinary individual under customary conditions of purchase and use.

(4)(d) If it is for use by humans and contains any quantity of the narcotic or hypnotic substance alpha-eucaine, barbituric acid, betaeucaine, bromal, cannabis, carbromal, chloral, coca, cocaine, codeine, heroin, marihuana, morphine, opium, paraldehyde, peyote, or sulphonmethane, or any chemical derivative of such a substance any of those substances, which derivative has been by the director of health after investigation found to be, and by regulations under this chapter designated as, habit forming, unless its label bears the name and quantity of the proportion of the substance or derivative and in juxtaposition therewith with it the statement "Warning - May be habit forming."

(5)(e) If it is a drug and is not designated solely by a name recognized in an official compendium unless its label bears: (i)(1) the common or usual name of the drug, if such there be; and (ii)(2) in case it is fabricated from two or more ingredients, the common or usual name of each active ingredient, including the kind and quantity or proportion of any alcohol, and also including, whether active or not, the name and quantity or proportion of any bromides, ether, chloroform, acetanilid, acetphenetidin, amidopyrine, anti-pyrine, atropine, hysoeine, hyoscyamine, arsenic, digitalis, glucosides, mercury, ouabain, strophanthin, strychnine, thyroid, or any derivative or preparation of any such those substances contained therein in it; provided, that to the extent that compliance with the requirements of clause (2) paragraph (ii) of this subdivision is impracticable, exemptions shall be established by regulations promulgated by the director of health.

(6)(f) Unless its labeling bears: (i)(1) adequate directions for use; and (ii)(2) such adequate warnings against use in those pathological conditions or by children where its use may be dangerous to health, or against unsafe dosage or methods or duration of administration or application, in such the manner and form as that are necessary for the protection of users; provided, that where any requirement of clause (1) paragraph (i) of this subdivision, as applied to any drug or device, is not necessary for the protection of the public health, the director of health shall promulgate regulations exempting the drug or device from those requirements.

(7)(g) If it purports to be a drug the name of which is recognized in an official compendium, unless it is packaged and labeled as prescribed therein in the compendium; provided, that the method of packing may be modified with the consent of the director of health. Whenever a drug is recognized in both the United States Pharmacopoeia and the Homeopathic Pharmacopoeia of the United States, it shall be subject to the requirements of the United States Pharmacopoeia with respect to packaging and labeling unless it is labeled and offered for sale as a homeopathic drug, in which case it shall be subject to the provisions of the Homeopathic Pharmacopoeia of the United States, and not to those of the United States Pharmacopoeia.

(8)(h) If it has been found by the director of health to be a drug liable to deterioration, unless it is packaged in such the form and manner, and its label bears a statement of such the precautions, as that the director of health shall by regulations require as necessary for the protection of public health. No such regulation shall be established for any drug recognized in an official compendium until the director of health shall have informed the appropriate body charged with the revision of the compendium of the need for such packaging or labeling requirements and that body shall have failed within a reasonable time to prescribe such those requirements.

(9)(i) If: (i)(1) If it is a drug and its container is so made, formed, or filled as to be misleading; or (ii)(2) if it is an imitation of another drug; or (iii)(3) if it is offered for sale under the name of another drug.

(10)(j) If it is dangerous to health when used in the dosage, or with the frequency or duration prescribed, recommended, or suggested in its labeling.

(11)(i)(k) (1) A drug intended for use by humans which: (A) is a habit forming drug to which subdivision (d) (a)(4) of this section applies;, or (B) because of its toxicity or the potential for harmful effect, or the method of its use, or the collateral measures necessary to its use, is not safe for use except under the supervision of a practitioner licensed by law to administer that drug;, or (C) is limited by an effective application under § 21-31-16 to use under the professional supervision of a practitioner licensed by law to administer that drug shall be dispensed only: (I)(1) upon a written prescription of a practitioner licensed by law to administer the drug, or (II)(2) upon an oral prescription of the practitioner which is reduced promptly to writing and filed by the pharmacist, or (III)(3) by refilling any such written or oral prescription if the refilling is authorized by the prescriber either in the original prescription or by oral order which is reduced promptly to writing and filed by the pharmacist. The act of dispensing a drug contrary to the provisions of this subdivision shall be deemed to be an act which results in the drug being misbranded while held for sale.

(ii)(2) The director of health may by regulation remove drugs subject to subdivision (d) (a)(4) of this section and § 21-31-16 from the requirements of subdivision (k)(1) paragraph (i) of this subdivision when such those requirements are not necessary for the protection of the public health.

(iii)(3) A drug which is subject to subdivision (k)(1) paragraph (i) of this subdivision shall be deemed to be misbranded if at any time prior to dispensing its label fails to bear the statement "Caution: Federal law prohibits dispensing without prescription." A drug to which subdivision (k)(1) paragraph (i) of this subdivision does not apply shall be deemed to be misbranded if at any time prior to dispensing its label bears the caution statement quoted in the preceding sentence.

(iv)(4) No prescription for any of the drugs described above in this subdivision shall be refilled if marked "non-repeat" or "N.R."

(12)(m) If it is a drug and its packaging or labeling is in violation of an applicable regulation issued pursuant to § 23-24.1-3 or 23-24.1-4 of the Poison Prevention Packaging Act.

(b)(1) (l) (1) Any drug dispensed by filling or refilling a written or oral prescription of a practitioner licensed by law to prescribe such the drug, and any drug dispensed to an ultimate user by a practitioner, shall be exempt from the requirements of this section except subdivisions (a)(1), (9), and (11) of this section, (i), and (k), and the packaging requirements of subdivisions (g), (h), and (m) (a)(7), (8), and (12) of this section, if the drug bears a label containing the name and address of the dispenser, the serial number and date of the prescription or of its filling, the name of the prescriber, and, if stated in the prescription, the name of the patient, and the directions for use and cautionary statements, if any, contained in the prescription. When a practitioner prescribes a drug by brand name, oral or written, he/she he or she shall, in each prescription, authorize a less expensive generic equivalent drug product by signing the prescription. If in the professional judgment of the prescribing practitioner the brand name is medically necessary, the practitioner shall write in his/her his or her own handwriting in a designated box, "Brand name necessary" on the prescription form. This exemption shall not apply to any drug dispensed in violation of subdivision (k)(1) paragraph (a)(11)(i) of this section.

(2)(A) When dispensing a generic drug product, the word "INTERCHANGE" or the letters "IC" must appear on the label followed by the generic name and manufacturer, and/or distributor, of the chosen product.

(3)(B) The requirements of (A) subdivision (2) of this subsection only apply to single entity, multiple-source drugs.

(4)(C) When dispensing a single entity, single source drug, the trade name of the prescribed drug will also appear on the label, and the generic name of the prescribed drug may also appear on the label.

(5)(D) When dispensing a fixed combination product, the United States Pharmacopoeia's publication of Pharmacy Equivalent Names (PEN Names) for fixed combination products is the official list of abbreviations for such that labeling, and will be the approved abbreviation for identifying the combination product dispensed. If no PEN name has been officially issued by the USP, the practitioner or pharmacist will label the medication secundum artem.

(6)(E) Subsections (A) - (D) Subdivisions (2) - (5) of this subsection apply in all cases of dispensing by practitioners or pharmacists.

(7)(2) Nothing in this section shall be construed to relieve any person from any requirement prescribed by or under authority of law with respect to drugs now included or which may hereafter subsequently be included within the classifications stated in chapters 28 and 30 of this title.

 

SECTION 65. Section 21-31.1-5 of the General Laws in Chapter 21-31.1 entitled "Veterinary Drugs" is hereby amended to read as follows:

 

21-31.1-5. Requirements for permit. -- Any veterinary drug distributor except licensed veterinarians intending to operate in the state of Rhode Island after June 2, 1988, shall be required to have a permit before commencing operations., except any distributor already operating on June 2, 1988, shall apply for a permit within 90 days after June 2, 1988. Pending receipt of a permit or denial of a permit under § 21-31.1-6 of this chapter such operations may continue.

 

SECTION 66. Section 21-33-5 of the General Laws in Chapter 21-33 entitled "Packaged Bakery Products" is hereby amended to read as follows:

21-33-5. Construction with other laws. -- Nothing contained in this chapter shall be construed to authorize any act heretofore otherwise prohibited under any other chapter provision of the general laws.

SECTION 67. Section 22-3-12 of the General Laws in Chapter 22-3 entitled "Organization of General Assembly" is hereby amended to read as follows:

            22-3-12. Legislative manual. -- The secretary of state shall prepare in each odd-numbered year a legislative manual for the use of the general assembly, containing the rolls of membership, the committees, the rules and orders, thereof, and such any other matter as that the secretary may think proper. The number of manuals to be printed and bound will be determined by the secretary of state. Ten (10) copies shall be distributed to each of the senators and representatives of the general assembly; forty (40) copies shall be placed at the disposal of the governor; and the remainder shall be placed in the hands of the secretary of state. There shall be appropriated in each odd numbered year, an amount sufficient to cover the cost of printing and binding of said the manual. The secretary of state is hereby authorized to distribute all remaining copies of the 1989-90 Rhode Island Manual to Rhode Island public schools and public libraries at no cost.

 

            SECTION 68. Section 22-7-1 of the General Laws in Chapter 22-7 entitled "Joint Committee on Accounts and Claims" is hereby amended to read as follows:

 

            22-7-1. Permanent committee - Composition. [Effective until January 7, 2003.] --

The joint committee on accounts and claims, heretofore previously created under joint rules of the senate and the house of representatives, shall consist of four (4) members of the senate to be appointed by the majority leader of the senate and five (5) members of the house of representatives to be appointed by the speaker, and is hereby created a as the permanent joint committee on accounts and claims of the general assembly. The members of this joint committee on accounts and claims shall serve until their successors shall be duly appointed as provided below in this chapter and until the successors shall have been duly qualified.

 

            22-7-1. Permanent committee - Composition. [Effective January 7, 2003.] --

The joint committee on accounts and claims, heretofore previously created under joint rules of the senate and the house of representatives, shall consist of four (4) members of the senate to be appointed by the president of the senate and five (5) members of the house of representatives to be appointed by the speaker, and is hereby created a as the permanent joint committee on accounts and claims of the general assembly. The members of this joint committee on accounts and claims shall serve until their successors shall be duly appointed as provided below in this chapter and until the successors shall have been duly qualified.

 

SECTION 69. Section 22-7.8-1 of the General Laws in Chapter 22-7.8 entitled "Permanent Joint Committee on Veterans' Affairs" is hereby amended to read as follows:

 

            22-7.8-1. Permanent committee - Composition. [Effective until January 7, 2003.] --There is hereby created a permanent joint committee of the general assembly on veterans' affairs to consist of fifteen (15) members of the general assembly, eight (8) of whom shall be from the house of representatives to be appointed by the speaker, not more than five (5) of whom shall be from the same political party; seven (7) of whom shall be from the senate to be appointed by the majority leader of the senate, not more than five (5) of whom shall be from the same political party. Vacancies shall be filled in like manner as the original appointments. The members of the joint committee on veterans' affairs shall serve so long as they shall remain members of the house from which they were appointed and until their successors are duly appointed and qualified. The initial chairmanship chairpersonship of the committee shall be filled from among the members of the house of representatives serving on the committee and thereafter the chairmanship shall alternate biennially from the senate to the house.

 

             22-7.8-1. Permanent committee -- Composition. [Effective January 7, 2003.] -- There is hereby created a permanent joint committee of the general assembly on veterans' affairs to consist of fifteen (15) members of the general assembly, eight (8) of whom shall be from the house of representatives to be appointed by the speaker, not more than five (5) of whom shall be from the same political party; seven (7) of whom shall be from the senate to be appointed by the president of the senate, not more than five (5) of whom shall be from the same political party. Vacancies shall be filled in like manner as the original appointments. The members of the joint committee on veterans' affairs shall serve so long as they shall remain members of the house from which they were appointed and until their successors are duly appointed and qualified. The initial chairmanship chairpersonship of the committee shall be filled from among the members of the house of representatives serving on the committee and thereafter the chairmanship shall alternate biennially from the senate to the house.

 

            SECTION 70. Section 22-7.9-1 of the General Laws in Chapter 22-7.9 entitled "Permanent Joint Committee on Economic Development" is hereby amended to read as follows:

 

            22-7.9-1. Permanent committee - Composition. [Effective until January 7, 2003.] -- There is hereby created a permanent joint committee of the general assembly on economic development to consist of eleven (11) members of the general assembly, five (5) of whom shall be from the senate to be appointed by the majority leader of the senate not more than three (3) of whom shall be from the same political party, and six (6) of whom shall be from the house of representatives to be appointed by the speaker of the house of representatives not more than four (4) of whom shall be from the same political party. The selection of the chairperson, vice-chairperson, and secretary of the committee shall alternate biennially between the majority leader of the senate and the speaker of the house as set forth in this chapter.

22-7.9-1. Permanent committee - Composition. [Effective January 7, 2003.] -- There is hereby created a permanent joint committee of the general assembly on economic development to consist of eleven (11) members of the general assembly, five (5) of whom shall be from the senate to be appointed by the majority leader president of the senate not more than three (3) of whom shall be from the same political party, and six (6) of whom shall be from the house of representatives to be appointed by the speaker of the house of representatives not more than four (4) of whom shall be from the same political party. The selection of the chairperson, vice-chairperson, and secretary of the committee shall alternate biennially between the majority leader of the senate and the speaker of the house as set forth in this chapter.

SECTION 71. Section 22-7.9-2 of the General Laws in Chapter 22-7.9 entitled "Permanent Joint Committee on Economic Development" is hereby repealed in its entirety.

22-7.9-2. Selection of officers. -- The first chairperson and secretary of the committee shall be selected by the majority leader of the senate. Thereafter The selection of the chairperson and secretary shall be made by the speaker of the house and shall alternate biennially between the speaker of the house and the majority leader of the senate. The first vice-chairperson of the committee shall be selected by the speaker of the house. Thereafter The selection of the vice-chairperson shall be made by the majority leader of the senate, and shall alternate biennially between the majority leader of the senate and the speaker of the house of representatives.

SECTION 72. Section 22-11-3.1 of the General Laws in Chapter 22-11 entitled "Joint Committee on Legislative Services" is hereby amended to read as follows:

22-11-3.1. Rules and regulations. -- (a) The joint committee on legislative services is hereby authorized and empowered to adopt such any rules and regulations as that are deemed necessary to accomplish the purposes of this chapter, a copy of which rules and regulations shall be filed with the secretary of state and available for public inspection; provided, however, that each permanent and continuing office or agency within the legislative department, established by statute and to which funds are specifically appropriated, will maintain and be responsible for exercising its own internal financial and personnel controls. In the formation of these rules and regulations, the joint committee shall take into consideration and conform to, where practicable, existing policies governing financial and personnel practices within the executive branch of government.

(b) The joint committee on legislative services is hereby authorized and empowered to adopt rules and regulations, consistent with the rules of each house of the general assembly, designed to provide electronic services and products to its elected members and, incrementally, to make electronic services and products regarding its proceedings available to the citizens of this state. commencing with the January Session 1996. The joint committee on legislative services shall prioritize general assembly proceedings and legislative information to be made incrementally accessible in a timely manner, including:

(1) A list of all members of the general assembly with their addresses and telephone numbers and all committees of the general assembly and their members;

(2) The history and status of every bill introduced and amended in each current legislative session;

(3) The current calendars of the house and the senate and of all legislative committees;

(4) The text of every bill introduced and to be printed in the current legislative session, including the amended or substitute form of each bill, and the text of every bill as enacted;

(5) The Rhode Island general laws;

(6) The Rhode Island Constitution; and

(7) The senate and house journals.;

(c) It shall be solely and exclusively within the discretion of the joint committee on legislative services, when providing access, to include and require, in written contracts for electronic services and products, provisions that:

(1) Protect the security and integrity of the information system of the general assembly;

(2) Limit any potential liability of the general assembly in providing public access to electronic services and products;

(3) Ensure that access of non-disclosable information is prohibited;

(4) Provide protection against intentional or accidental disclosure, modification, or destruction of records.

 

SECTION 73. Section 22-13-9 of the General Laws in Chapter 22-13 entitled "Auditor General" is hereby amended to read as follows:

22-13-9. Access to executive sessions of a public agency - Access to records - Disclosure by the auditor general. -- (a) Whenever a public agency goes into executive session, the auditor general or his or her designated representative shall be permitted to attend the executive session or if the auditor general or his or her designee is not in attendance at the executive session, the auditor general or his or her designee, upon written request, shall be furnished with copies of all data or materials furnished to the members of the public agency at the executive session. If the auditor general or his or her designee attends the executive session, the auditor general shall be furnished the same data in the same form and at the same time as members of the public agency.

(b) Within three (3) working days of a written request by the auditor general, the public agency shall furnish a copy, whether approved by the agency or not, of the minutes of any meeting, including any executive session of the public agency.

(c) The auditor general shall have full and unlimited access to any and all records of any public agency, in whatever form or mode the records may be, unless the auditor general's access to such the records is specifically prohibited or limited by federal or state law. In no case shall any confidentiality provisions of state law be construed to restrict the auditor general's access to such the records; provided, however, the auditor general's access to any confidential data shall not in any way change the confidential nature of the data obtained. Where an audit or investigative finding emanates from confidential data, specific confidential information will not be made public. Such The records shall include those in the immediate possession of a public agency as well as records which the agency itself has a right to. In the event of a dispute between the agency involved and the auditor general as to whether or not the data involved are confidential by law, the matter will be referred to the attorney general for resolution.

(d)(1) If in the course of an executive session any fact comes to the attention of the auditor general or his or her designated representative, which in his or her judgment constitutes an impropriety, irregularity, or illegal transaction, or points to the onset of an impropriety or illegal transaction, then the auditor general shall disclose that information to the joint committee on legislative services, the director of administration, and the chairperson of the public agency involved. Where the facts or the data upon which the facts are based are deemed confidential pursuant to the provisions of federal or state law, the auditor general's access to the information shall not in any way change the confidential nature of the data obtained.

(2) In the event of a dispute between the agency involved and the auditor general as to whether or not the data involved are confidential by law, the matter will be referred to the attorney general for resolution.

(e) The auditor general or his or her designated representative shall be immune from any liability to any party for claims arising out of disclosure authorized by this section.

(f) For the purposes of this section, the phrase "public agency" shall include the following: the Rhode Island industrial building authority, the Rhode Island recreational building authority, the Rhode Island port authority and economic development corporation, the Rhode Island industrial facilities corporation, the Rhode Island public buildings refunding bond authority, the Rhode Island housing and mortgage finance corporation, the Rhode Island solid waste management resource recovery corporation, the Rhode Island public transit authority, the Rhode Island student loan authority, the Howard development corporation, the water resources board, the Rhode Island health and educational building corporation, the Rhode Island higher education assistance authority, the Rhode Island turnpike and bridge authority, the Blackstone Valley district commission, the Narragansett Bay water quality management district commission, Rhode Island public telecommunications authority, the convention center authority, channel 36 foundation, their successors and assigns, and any other body corporate and politic which has been here before or which is hereinafter subsequently created or established within this state.

 

SECTION 74. Sections 22-14-2 and 22-14-11 of the General Laws in Chapter 22-14 entitled "Legislative Oversight Commission" are hereby amended to read as follows:

22-14-2. Quorum - Meetings. -- Six (6) members of the commission shall constitute a quorum for the transaction of any business. Meetings of the commission may be held at any time or place upon call of any member, after a reasonable notice by mail or telegraph to the other members, and shall be held at such the times and places as in the judgment of the commission will best serve the convenience of all parties in interest.

22-14-11. Legislative action. -- From and after May 13, 1977, Whenever the general assembly is about to create or re-create any statutory entity it should, whenever possible, request a report from the commission as set forth in § 22-14-7; of this chapter; however, no such report is required to be received by the general assembly for any action to be taken, and nothing in this chapter shall be construed to prohibit the legislature from terminating an entity covered by these provisions at a date earlier than that provided herein in this chapter, nor to prohibit the legislature from considering any other legislation relative to such an that entity.

SECTION 75. Sections 22-14-5.1 and 22-14-9 of the General Laws in Chpater 22-14 entitled "Legislative Oversight Commission" are hereby repealed in their entirety.

22-14-5.1. Termination of statutory entity. -- (a) The legislative authority for the existence of the statutory entity listed below as defined in § 22-14-4 shall cease as of June 30, 1990:

Litter and recycling advisory council created by § 37-15-4.

(b) Notwithstanding any other reporting requirements of this chapter, the auditor general's report shall be submitted on or before September 1, 1989 and the commission report shall be submitted on or before March 1, 1990.

22-14-9. Reestablishment. -- The life of each entity or statute scheduled for termination under the provisions of § 22-14-5.1 may be continued or reestablished by action of the general assembly.

CHAPTER 17

COMMISSION ON VEHICLE EMISSIONS

 

            SECTION 76. Sections 22-17-1, 22-17-2, 22-17-3, 22-17-4 and 22-17-5 of the General Laws in Chapter 22-17 entitled "Commission on Vehicle Emissions" are hereby repealed in their entirety.           

22-17-1. Legislative findings. -- The general assembly hereby finds and declares that:

(1) Poor air quality has an adverse effect on the health of all Rhode Island residents, particularly the elderly and those with respiratory ailments;

(2) Poor air quality contributes to acid rain problems and has adverse effects on the water and land as well as doing damage to the food chain and aquatic life;

(3) Poor air quality exacerbates the deterioration of our buildings, structures, roads, bridges and parks;

(4) National legislative efforts are being pursued to strengthen requirements to improve air quality;

(5) Auto emissions account for a substantial amount of air pollution problems in the northeastern part of the country;

(6) Nationally, as much as thirty percent (30%) of auto emissions systems have been tampered with;

(7) There is a need to improve Rhode Island's capabilities in complying with more rigorous auto emissions inspections and standards.

 

22-17-2. Establishment - Purpose - Membership. [Effective until January 7, 2003.] -- (a) There is hereby established a commission on vehicle emissions empowered to study and investigate the adverse effect on air quality of vehicle emissions. The study and investigation shall include, but not be limited to, the following:

(1) The state's current system of testing auto emissions, including the technical and administrative needs for improving that system;

(2) The quantity and quality of service stations now performing the testing services;

(3) Enforcement efforts under the current testing system;

(4) The feasibility of tying motor vehicle registrations to emissions testing;

(5) Compensation of service stations performing the testing service;

(6) The feasibility of adopting and improving upon the emissions checks systems used in other states and the costs thereof of those systems.

(b) The commission shall consist of seventeen (17) members all of whom shall be citizens and residents of the state; four (4) of whom shall be members of the house of representatives, not more than three (3) from the same political party, to be appointed by the speaker; three (3) of whom shall be members of the senate, not more than two (2) from the same political party, to be appointed by the majority leader; two (2) of whom shall be members of nonprofit organizations dealing with air pollution and/or health issues, one to be appointed by the speaker of the house and one to be appointed by the senate majority leader; one member of a service station organization to be appointed by the speaker of the house; one member of an automobile dealers organization to be appointed by the speaker of the house; one person from higher education to be appointed by the senate majority leader; the director of the department of transportation, or his or her designee; the director of the department of health or his or her designee; the director of the department of environmental management, or his or her designee; the superintendent of state police, or his or her designee; and the attorney general, or his or her designee.

(c) The legislative members shall serve so long as they shall remain members of the house from which they were appointed and until their successors are appointed and qualified; the directors of the department of transportation, health and environmental management, the superintendent of state police and the attorney general shall serve so long as they hold office and until their successors are appointed and qualified; all other members shall serve at the pleasure of the appointing authority and until their successors are appointed and qualified.

(d) Any vacancy on the commission shall be filled by the appointing authority in the same manner as the original appointment.

(e) The members shall annually elect, by majority vote, one of their members as chairperson, one of their members as vice-chairperson and one of their members as secretary.

22-17-2. Establishment - Purpose - Membership. [Effective January 7, 2003.] --(a) There is hereby established a commission on vehicle emissions empowered to study and investigate the adverse effect on air quality of vehicle emissions. The study and investigation shall include, but not be limited to, the following:

(1) The state's current system of testing auto emissions, including the technical and administrative needs for improving that system;

(2) The quantity and quality of service stations now performing the testing services;

(3) Enforcement efforts under the current testing system;

(4) The feasibility of tying motor vehicle registrations to emissions testing;

(5) Compensation of service stations performing the testing service;

(6) The feasibility of adopting and improving upon the emissions checks systems used in other states and the costs thereof of those systems.

(b) The commission shall consist of seventeen (17) members all of whom shall be citizens and residents of the state; four (4) of whom shall be members of the house of representatives, not more than three (3) from the same political party, to be appointed by the speaker; three (3) of whom shall be members of the senate, not more than two (2) from the same political party, to be appointed by the president of the senate; two (2) of whom shall be members of nonprofit organizations dealing with air pollution and/or health issues, one to be appointed by the speaker of the house and one to be appointed by the president of the senate; one member of a service station organization to be appointed by the speaker of the house; one member of an automobile dealers organization to be appointed by the speaker of the house; one person from higher education to be appointed by the president of the senate; the director of the department of transportation, or his or her designee; the director of the department of health or his or her designee; the director of the department of environmental management, or his or her designee; the superintendent of state police, or his or her designee; and the attorney general, or his or her designee.

(c) The legislative members shall serve so long as they shall remain members of the house from which they were appointed and until their successors are appointed and qualified; the directors of the department of transportation, health and environmental management, the superintendent of state police and the attorney general shall serve so long as they hold office and until their successors are appointed and qualified; all other members shall serve at the pleasure of the appointing authority and until their successors are appointed and qualified.

(d) Any vacancy on the commission shall be filled by the appointing authority in the same manner as the original appointment.

(e) The members shall annually elect, by majority vote, one of their members as chairperson, one of their members as vice-chairperson and one of their members as secretary.

22-17-3. Technical assistance. -- The commission on vehicle emissions shall, with the approval of the chairperson of the joint committee on legislative services, contract for those technical services it shall require to effectuate its purpose which are otherwise unavailable to the commission.

All departments and agencies of the state shall furnish such any advice and information, documentary and otherwise, to said the commission and its agents as that is deemed necessary or desirable by the commission to facilitate the purposes of this chapter.

 

            22-17-4. Reports and recommendations. -- The commission on vehicle emission shall from time to time and at least annually report to the general assembly and the governor on its findings and the result of its studies, and make such any recommendations to the general assembly and propose such any legislation or initiate such any studies as that it shall deem advisable. The first such report shall be made prior to January 1, 1991. The commission shall deliver its final report and shall expire on January 1, 1995.

22-17-5. Place of meeting - Quorum. -- The joint committee on legislative services shall provide adequate space in the state house for the use of the commission on vehicle emissions; provided, however, that the commission on vehicle emissions may conduct hearings and hold meetings elsewhere when doing so will better serve its purpose. A majority in number of the commission on vehicle emissions shall be necessary to constitute a quorum for the transaction of business.

SECTION 77. Section 27-34.1-11 of the General Laws in Chapter 27-34.1 entitled "Rhode Island Life and Health Insurance Guaranty Association Act" is hereby amended to read as follows:

27-34.1-11. Plan of operation. -- (a) The association shall submit to the commissioner a plan of operation and any amendments thereto to the plan necessary or suitable to assure the fair, reasonable, and equitable administration of the association. The plan of operation and any amendments thereto to it shall become effective upon approval in writing by the commissioner.

(b) If the association fails to submit a suitable plan of operation within one hundred and eighty (180) days following July 1, 1985, or if at any time thereafter the association fails to submit suitable amendments to the plan, the commissioner shall, after notice and hearing, adopt and promulgate the reasonable rules that are necessary or advisable to effectuate the provisions of this chapter. Those rules shall continue in force until modified by the commissioner or superseded by a plan submitted by the association and approved by the commissioner.

(c) All member insurers shall comply with the plan of operation.

(d) The plan of operation shall, in addition to requirements enumerated elsewhere in this chapter:

(1) Establish procedures for handling the assets of the association;

(2) Establish the amount and method of reimbursing members of the board of directors under § 27-34.1-8;

(3) Establish regular places and times for meetings of the board of directors;

(4) Establish procedures for records to be kept of all financial transactions of the association and its agents and board of directors;

(5) Establish the procedures whereby by which selections for the board of directors will be made and submitted to the commissoner commissioner;

(6) Establish any additional procedures for assessments under § 27-34.1-10; and

(7) Contain additional provisions necessary or proper for the execution of the powers and duties of the association.

(e) The plan of operation may provide that any or all powers and duties of the association, except those under § 27-34.1-10, are delegated to a corporation, association, or other organization which performs or will perform functions similar to those of the association, or its equivalent, in two (2) or more states. That a corporation, association, or organization shall be reimbursed for any payments made on behalf of the association and shall be paid for its performance of any function of the association. A delegation under this subsection shall take effect only with the approval of both the board of directors and the commissioner, and may be made only to a corporation, association, or organization which extends protection not substantially less favorable and effective than that provided by this chapter.

 

SECTION 78. Section 27-34.2-2 of the General Laws in Chapter 27-34.2 entitled "Long Term Care Insurance" is 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 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, on or after June 2, 1988. 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. Except to the extent expressly provided in this chapter, nothing in any other chapter of this title, or chapter 62 of title 42, regulating the form, content, or provisions of accident and health insurance policies, health benefit plans, and Medicare supplement insurance policies, or the filing and approval of those policies or plans including premium rates, applies to long term care insurance policies written under and subject to the provisions of this chapter.

 

SECTION 79. Sections 27-34.3-5 and 27-34.3-12 of the General Laws in Chapter 27-34.3 entitled "Rhode Island Life and Health Insurance Guaranty Assocation Act" are hereby amended to read as follows:

 

27-34.3-5. Definitions. -- As used in this chapter:

(1) "Account" means either of the two accounts created under § 27-34.3-6.

(2) "Association" means the Rhode Island life and health insurance guaranty association created under § 27-34.3-6.

(3) "Commissioner" means the commissioner of insurance within the department of business regulation of this state.

(4) "Contractual obligation" means any obligation under a policy or contract or certificate under a group policy or contract, or portion thereof of a group policy or contract for which coverage is provided under § 27-34.3-3.

(5) "Covered policy" means any policy or contract within the scope of this chapter under § 27-34.3-3.

(6) "Impaired insurer" means a member insurer which, after January 1, 1996, is not an insolvent insurer, and:

(i) Is deemed by the commissioner to be potentially unable to fulfill its contractual obligations; or

(ii) Is placed under an order of rehabilitation or conservation by a court of competent jurisdiction.

(7) "Insolvent insurer" means a member insurer which after the effective date of this chapter, is placed under an order of liquidation by a court of competent jurisdiction with a finding of insolvency.

(8) "Member insurer" means any insurer licensed or which holds a certificate of authority to transact in this state any kind of insurance for which coverage is provided under § 27-34.3-3, and includes any insurer whose license or certificate of authority in this state may have been suspended, revoked, not renewed or voluntarily withdrawn, but does not include:

(i) A non-profit hospital or medical service organization;

(ii) A health maintenance organization;

(iii) A fraternal benefit society;

(iv) A mandatory state pooling plan;

(v) A mutual assessment company or any entity that operates on an assessment basis;

(vi) An insurance exchange; or

(vii) Any entity similar to any of the above.

(9) "Moody's corporate bond yield average" means the monthly average corporates as published by Moody's Investors Service, Inc., or any successor thereto to it.

(10) "Person" means any individual, corporation, partnership, association or voluntary organization.

(11) "Premiums" means amounts received on covered policies or contracts less premiums, considerations and deposits returned thereon on the policies or contracts, and less dividends and experience credits thereon on them. "Premiums" does not include any amounts received for any policies or contracts or for the portions of any policies or contracts for which coverage is not provided under § 27-34.3-3(b) except that assessible assessable premium shall not be reduced on account of § 27-34.3-3(b)(2)(iii) relating to interest limitations and § 27-34.3-3(c)(2) relating to limitations with respect to any one individual, any one participant and any one contract holder; provided that "premiums" shall not include any premiums in excess of five million dollars ($5,000,000) on any unallocated annuity contract not issued under a governmental retirement plan established under § 401, 403(b) or 457 of the United States Internal Revenue Code, 26 U.S.C. § 401, 403(b) or 457.

(12) "Resident" means any person who resides in this state at the time a member insurer is determined to be an impaired or insolvent insurer and to whom a contractual obligation is owed. A person may be a resident of only one state, which in the case of a person other than a natural person shall be its principal place of business.

(13) "Supplemental contract" means any agreement entered into for the distribution of policy or contract proceeds.

(14) "Unallocated annuity contract" means any annuity contract or group annuity certificate which is not issued to and owned by an individual, except to the extent of any annuity benefits guaranteed to an individual by an insurer under the contract or certificate.

 

            27-34.3-12. Prevention of insolvencies. -- To aid in the detection and prevention of insurer insolvencies or impairments:,

(1) The commissioner may, in his or her discretion:,

(i) Notify the commissioners of all the other states, territories of the United States and the District of Columbia when the commissioner takes any of the following actions against a member insurer:

(A) Revocation of license;

(B) Suspension of license; or

(C) Makes any formal order that such the company restrict its premium writing, obtain additional contributions to surplus, withdraw from the state, reinsure all or any part of its business, or increase capital, surplus, or any other account for the security of policyholders or creditors.

(ii) Report to the board of directors when the commissioner has taken any of the actions set forth in paragraph (1) (i) of this subdivision or has received a report from any other commissioner indicating that any such action has been taken in another state. The report to the board of directors shall contain all significant details of the action taken or the report received from another commissioner.

(iii) Report to the board of directors when the commissioner has reasonable cause to believe from any examination, whether completed or in process, of any member company that the company may be an impaired or insolvent insurer.

(iv) Furnish to the board of directors the NAIC insurance regulatory information system (IRIS) ratios and listings of companies not included in the ratios developed by the National Association of Insurance Commissioners, and the board may use the information contained therein in the ratios and listings in carrying out its duties and responsibilities under this section. The report and the information contained therein in it shall be kept confidential by the board of directors until such time as made public by the commissioner or other lawful authority.

(2) The commissioner may seek the advice and recommendations of the board of directors concerning any matter affecting his duties and responsibilities regarding the financial condition of member insurers and companies seeking admission to transact insurance business in this state.

(3) The board of directors may, upon majority vote, make reports and recommendations to the commissioner upon any matter germane to the solvency, liquidation, rehabilitation or conservation of any member insurer or germane to the solvency of any company seeking to do an insurance business in this state. The reports and recommendations shall not be considered public documents.

(4) It shall be the duty of the board of directors, upon majority vote, to notify the commissioner of any information indicating any member insurer may be an impaired or insolvent insurer.

(5) The board of directors may, upon majority vote, request that the commissioner order an examination of any member insurer which the board in good faith believes may be an impaired or insolvent insurer. Within thirty (30) days of the receipt of the request, the commissioner shall begin an examination. The examination may be conducted as a national association of insurance commissioners examination or may be conducted by persons the commissioner designates. The cost of the examination shall be paid by the association and the examination report shall be treated as are other examination reports.

The commissioner shall notify the board of directors when the examination is completed. The request for an examination shall be kept on file by the commissioner, but it shall not be open to public inspection prior to the release of the examination report to the public.

(6) The board of directors may, upon majority vote, make recommendations to the commissioner for the detection and prevention of insurer insolvencies.

(7) The board of directors shall, at the conclusion of any insurer insolvency in which the association was obligated to pay covered claims, prepare a report to the commissioner containing such information as it may have in its possession bearing on the history and causes of the insolvency. The board shall cooperate with the boards of directors of guaranty associations in other states in preparing a report on the history and causes of insolvency of a particular insurer, and may adopt by reference any report prepared by other associations.

 

SECTION 80. Section 27-35-3 of the General Laws in Chapter 27-35 entitled "Insurance Holding Company Systems" is hereby amended to read as follows:

 

27-35-3. Registration of insurers. --  (a) Registration. Every insurer that is authorized to do business in this state and that is a member of an insurance holding company system shall annually register with the commissioner, except a foreign insurer subject to disclosure requirements and standards adopted by statute or regulation in the jurisdiction of its domicile which are substantially similar to those contained in § 27-35-3, this section and § 27-35-4(a), (b), (f) and(g)., 27-35-4(b), 27-35-4(f) and 27-35-4(g). Any insurer that is subject to registration under this section shall register within sixty (60) days after July 16, 1971 or fifteen (15) days after it becomes subject to registration, whichever is later, unless the commissioner for good cause shown extends the time for registration, and then within that extended time. The commissioner may require any authorized insurer which is a member of a holding company system which is not subject to registration under this section to furnish a copy of the registration statement or other information filed by the insurance company with the insurance regulatory authority of domiciliary jurisdiction.

(b) Information and form required. Every insurer subject to registration shall file a registration statement on a form provided by the commissioner, which shall contain current information about:

(1) The capital structure, general financial condition, ownership, and management of the insurer and any person controlling the insurer;

(2) The identity of every member of the insurance holding company system;

(3) The following agreements in force, relationships subsisting, and transactions currently outstanding between the insurer and its affiliates:

(i) Loans, other investments or purchases, and sales and exchanges of securities of the affiliates by the insurer or of the insurer by its affiliates;

(ii) Purchases, sales, or exchanges of assets;

(iii) Transactions not in the ordinary course of business;

(iv) Guarantees or undertakings for the benefit of an affiliate which result in an actual contingent exposure of the insurer's assets to liability, other than insurance contracts entered into in the ordinary course of the insurer's business;

(v) All management service contracts and all cost sharing arrangements; and

(vi) Reinsurance agreements;

(vii) Dividends and other distributions to shareholder;

(viii) Consolidated tax allocation agreements; and

(3.1) Any pledge of the insurer's stock, including stock of any subsidiary or controlling affiliate, for a loan made to any member of the insurance holding company system; and

(4) Other matters concerning transactions between registered insurers and any affiliates as may be included from time to time in any registration forms adopted or approved by the commissioner.

(c) Materiality. No information need be disclosed on the registration statement filed pursuant to subsection (b) of this section if that information is not material for the purposes of this section. Unless the commissioner by rule, regulation, or order provides otherwise, sales, purchases, exchanges, loans, or extensions of credit or investments involving one-half of one percent (.5%) or less of an insurer's admitted assets as of the thirty-first day of December next preceding shall not be deemed material for purposes of this section.

(d) Amendments to registration statements. Each registered insurer shall keep current the information required to be disclosed in its registration statement by reporting all material changes or additions on amendment forms provided by the commissioner within fifteen (15) days after the end of the month in which it learns of each change or addition; provided, however, that subject to § 27-35-4(c), each registered insurer shall so report all dividends and other distributions to shareholders within two (2) business days following the declaration thereof of the dividend or other distribution.

(e) Termination of registration. The commissioner shall terminate the registration of any insurer that demonstrates that it no longer is a member of an insurance holding company system.

(f) Consolidated filing. The commissioner may require or allow two (2) or more affiliated insurers subject to registration hereunder under this chapter to file a consolidated registration statement or consolidated reports amending their consolidated registration statement or their individual registration statements.

(g) Alternative registration. The commissioner may allow an insurer that is authorized to do business in this state and which is part of an insurance holding company system to register on behalf of any affiliated insurer which is required to register under subsection (a) and to file all information and material required to be filed under this section.

(h) Exemptions. The provisions of this section shall not apply to any insurer, information, or transaction if and to the extent that the commissioner by rule, regulation, or order shall exempt from the provisions of this section.

(i) Disclaimer. Any person may file with commissioner a disclaimer of affiliation with any authorized insurer or the disclaimer may be filed by the insurer or any member of an insurance holding company system. The disclaimer shall fully disclose all material relationships and basis for affiliation between the person and the insurer as well as the basis for disclaiming the affiliation. After a disclaimer has been filed, the insurer shall be relieved of any duty to register or report under this section which may arise out of the insurer's relationship with the person unless and until the commissioner disallows the disclaimer. The commissioner shall disallow the disclaimer only after furnishing all parties in interest with notice and opportunity to be heard and after making specific findings of fact to support the disallowance.

(j) Violations. The failure to file a registration statement or any amendment thereto to it required by this section within the time specified for the filing shall be a violation of this section.

(k) Summary of registration statement. All registration statements shall contain a summary outlining all items in the current registration statement representing changes from the prior registration statement.

(l) Information of insurers. Any person within an insurance holding company system subject to registration shall be required to provide complete and accurate information to an insurer, where the information is reasonably necessary to enable the insurer to comply with the provisions of this chapter.

SECTION 81. Section 27-37-1 of the General Laws in Chapter 27-37 entitled "Cancellation of Group Insurance" is hereby amended to read as follows:

27-37-1. Notice of cancellation. -- No policy of group insurance hereafter issued in this state shall be cancelled by the insurer unless written notice of cancellation be mailed to the group contract holder by certified or registered mail at least thirty (30) days prior to the cancellation date in order for the cancellation to be effective.

 

SECTION 82. Sections 27-34.2-11 and 27-34.2-17 of the General Laws in Chapter 27-34.2 entitled "Long Term Care Insurance" are hereby repealed in their entirety.

 

27-34.2-11. Previously approved policies. -- All long term care insurance policies previously approved by the department of business regulation, that are offered or delivered after June 2, 1988, shall be brought into compliance with this chapter on or before January 1, 1991.

27-34.2-17. Long term care insurance advisory panel. [Effective until January 7, 2003.] --

(a) There is hereby established an advisory panel to the department of business regulation for the purpose of examining minimum criteria for Medicaid qualifying long term care insurance policies. The panel shall consist of the following:

(1) The director of the department of health and human services or the director's designee;

(2) A representative of the insurance industry to be appointed by the governor;

(3) The director of the department of business regulation or the director's designee;

(4) An attorney whose practice concentrates in elder law, to be appointed by the speaker of the house;

(5) A member of the American Association of Retired Persons to be appointed by the speaker of the house;

(6) A representative of the Rhode Island Medical Society;

(7) The director of the department of elderly affairs or the director's designee;

(8) A representative of a visiting nurse association;

(9) Three (3) members of the house of representatives, no more than two (2) from the majority party; and

(10) Two (2) members of the senate to be appointed by the majority leader, one from each party.

(b) The advisory panel shall report to the director of the department of business regulation on or before December 31, 1994 regarding recommended basic requirements for long term care insurance policies.

27-34.2-17. Long term care insurance advisory panel. [Effective January 7, 2003.] --

(a) There is hereby established an advisory panel to the department of business regulation for the purpose of examining minimum criteria for Medicaid qualifying long term care insurance policies. The panel shall consist of the following:

(1) The director of the department of health and human services or the director's designee;

(2) A representative of the insurance industry to be appointed by the governor;

(3) The director of the department of business regulation or the director's designee;

(4) An attorney whose practice concentrates in elder law, to be appointed by the speaker of the house;

(5) A member of the American Association of Retired Persons to be appointed by the speaker of the house;

(6) A representative of the Rhode Island Medical Society;

(7) The director of the department of elderly affairs or the director's designee;

(8) A representative of a visiting nurse association;

(9) Three (3) members of the house of representatives, no more than two (2) from the majority party; and

(10) Two (2) members of the senate to be appointed by the president of the senate, one from each party.

(b) The advisory panel shall report to the director of the department of business regulation on or before December 31, 1994 regarding recommended basic requirements for long term care insurance policies.

 

SECTION 83. Section 27-38.2-1 of the General Laws in Chapter 27-38 entitled "Insurance Coverage for Mental Illness and Substance Abuse" is hereby amended to read as follows:

 

27-38.2-1. Mental illness coverage. -- Every health care insurer that delivers or issues for delivery or renews in this state on or after January 1, 2002, a contract, plan, or policy except contracts providing supplemental coverage to Medicare or other governmental programs, shall provide coverage for the medical treatment of mental illness and substance abuse under the same terms and conditions as such that coverage is provided for other illnesses and diseases. Insurance coverage offered pursuant to this statute must include the same durational limits, amount limits, deductibles, and co-insurance factors for mental illness as for other illnesses and diseases.

 

SECTION 84. Section 27-40-2 of the General Laws in Chapter 27-40 entitled "Insurance Premium Finance Agreements" is hereby amended to read as follows:

 

27-40-2. Definitions. -- As used in this chapter:

(1) "Director" means the director of business regulation.

(2) "Insurance premium finance agreement"; hereinafter referred to in this chapter as "agreement",; means an agreement by which an insured, or prospective insured, promises to pay to an insurance premium finance company the amount advanced or to be advanced, under the agreement to an insurer or to an insurance producer, in payment of a premium or premiums on an insurance contract or contracts, together with interest and a service charge, as authorized and limited by this chapter;

(3) "Insurance premium finance company", hereinafter referred to in this chapter as "company", means a person engaged in the business of entering into insurance premium finance agreements, as hereinafter defined, or acquiring insurance premium finance agreements from other insurance premium finance companies;

(4) "Licensee" means an insurance premium finance company holding a license issued and existing by virtue of and pursuant to chapter 25.3 14.1 of title 19; and [similar provisions now under 19-14.1]

(5) "Person" means an individual, partnership, association, business corporation, nonprofit corporation, common law trust, joint stock company; or any other group of individuals howsoever lawfully organized.

 

SECTION 85. Sections 27-41-1, 27-41-2, 27-41-9, 27-41-13, 27-41-19, 27-41-26.1, 27-41-20.1, 27-41-33, 27-41-34, 27-41-36, 27-41-38, 27-41-39, 27-41-40, 27-41-41, 27-41-43, 27-41-43.1, 27-41-44, 27-41-49, 27-41-49.1, 27-41-50, 27-41-53.1, 27-41-54, 27-41-59, and 27-41-64 of the General Laws in Chapter 27-41 entitled "Health Maintenance Organizations" are hereby amended to read as follows:

 

27-41-1. Short title. -- This chapter may be cited as the "Health Maintenance Organization Act." of 1983".

 

27-41-2. Definitions. -- (a) "Covered health services" means the services that a health maintenance organization contracts with enrollees and enrolled groups to provide or otherwise make available to an enrolled participant.

(b) "Director" means the director of the department of business regulation or his or her duly appointed agents.

(c) "Employee" means any person who has entered into the employment of or works under a contract of service or apprenticeship with any employer. It shall not include a person who has been employed for less than thirty (30) days by his or her employer, nor shall it include a person who works less than an average of thirty (30) hours per week. For the purposes of this chapter, the term "employee" shall mean a person employed by an "employer" as defined in subsection (d) of this section. Except as otherwise provided herein in this chapter the terms "employee" and "employer" are to be defined according to the rules and regulations of the department of labor and training.

(d) "Employer" means any person, partnership, association, trust, estate, or corporation, whether foreign or domestic, or the legal representative, trustee in bankruptcy, receiver, or trustee thereof of a receiver, or the legal representative of a deceased person, including the state of Rhode Island and each city and town therein in the state, which has in its employ one or more individuals during any calendar year. after May 17, 1983. For the purposes of this section, the term "employer" refers only to an employer with persons employed within the state of Rhode Island.

(e) "Enrollee" means an individual who has been enrolled in a health maintenance organization.

(f) "Evidence of coverage" means any certificate, agreement, or contract issued to an enrollee setting out the coverage to which the enrollee is entitled.

(g) "Health care services" means any services included in the furnishing to any individual of medical, podiatric, or dental care, or hospitalization, or incident to the furnishing of that care or hospitalization, as well as the furnishing to any person of any and all other services for the purpose of preventing, alleviating, curing, or healing human illness, injury, or physical disability.

(h) "Health maintenance organization" means a single public or private organization which:

(1) Provides or otherwise makes available to enrolled participants health care services, including at least the following basic health care services: usual physician services, hospitalization, laboratory, x-ray, emergency, and preventive services, and out of area coverage, and the services of licensed midwives;

(2) Is compensated, except for copayments, for the provision of the basic health care services listed in subsection (h) subdivision (1) of this section subsection to enrolled participants on a predetermined periodic rate basis; and

(3) (i) Provides physicians' services primarily:

(A) Directly through physicians who are either employees or partners of the organization; or

(B) Through arrangements with individual physicians or one or more groups of physicians organized on a group practice or individual practice basis;

(ii) "Health maintenance organization" does not include prepaid plans offered by entities regulated under chapter 1, 2, 19, or 20 of this title which do not meet the criteria above and do not purport to be health maintenance organizations;

(4) Provides the services of licensed midwives primarily:

(i) Directly through licensed midwives who are either employees or partners of the organization; or

(ii) Through arrangements with individual licensed midwives or one or more groups of licensed midwives organized on a group practice or individual practice basis.

(i) "Licensed midwife" means any midwife licensed pursuant to § 23-13-9.

(j) (o) "Material modification" means only systemic changes to the information filed under § 27-41-3.

(k) (p) "Net worth", for the purposes of this chapter, means the excess of total admitted assets over total liabilities.

(l) (j) "Physician" shall include podiatrist as defined in chapter 29 of title 5.

(m) (k) "Private organization" means a legal corporation with a policy making and governing body.

(n) (l) "Provider" means any physician, hospital, licensed midwife, or other person which who is licensed or otherwise authorized in this state to furnish health care services.

(o) (m) "Public organization" means an instrumentality of government.

(p) (q) "Risk based capital ("RBC") instructions" means the risk based capital report including risk based capital instructions adopted by the National Association of Insurance Commissioners ("NAIC"), as these risk based capital instructions are amended by the NAIC from time to time in accordance with the procedures adopted by the NAIC.

(q) (r) "Total adjusted capital" means the sum of:

(1) A health maintenance organization's statutory capital and surplus (i.e. net worth) as determined in accordance with the statutory accounting applicable to the annual financial statements required to be filed under § 27-41-9; and

(2) Any other items, if any, that the RBC instructions provide.

(r) (n) "Uncovered expenditures" means the costs of health care services that are covered by a health maintenance organization, but that are not guaranteed, insured, or assumed by a person or organization other than the health maintenance organization. Expenditures to a provider that agrees not to bill enrollees under any circumstances are excluded from this definition.

 

27-41-9. Required reports. -- (a) Every health maintenance organization shall annually, on or before the first day of March, file a report verified by at least two (2) principal officers with the director, with a copy to the director of health, covering the preceding calendar year.

(b) The annual report shall be on forms prescribed by the director in consultation with the director of health and shall include:

(1) A financial statement of the organization, including its balance sheet and receipts and disbursements for the preceding year certified by an independent public accountant;

(2) Any material changes in the information submitted pursuant to § 27-41-3(c);

(3) The number of persons enrolled during the year, the number of enrollees as of the end of the year, and the number of enrollments terminated during the year;

(4) A summary of information compiled pursuant to § 27-41-4(b)(2)(iv) 27-41-4(a)(2)(iv) in the form as required by the director of health; and

(5) Any other information relating to the performance of the health maintenance organization as is necessary to enable the director to carry out his or her duties under this chapter.

(c) In addition to the reports required in subsection (a), every health maintenance organization shall on a form prescribed by the director report on or before September 30 of each year a filing that shall set forth the amount of uncovered and covered expenses that are payable and are more than ninety (90) days past due. That report shall cover the period January 1 through July 31 of that year. Further, at the time of the filing of the annual report as required in subsection (a), a report shall be filed setting forth the amount of uncovered and covered expenses that are payable and are more than ninety (90) days past due; that report shall cover the preceding period of August 1 through December 31 of that year.

(d) Every health maintenance organization shall also file quarterly statements with the insurance commissioner, due on or before forty-five (45) days after the quarter ending in accordance with the National Association of Insurance Commissioners' guidelines and procedures, and shall be available for inspection by the public.

(e) The insurance commissioner shall also require compliance with chapters 12 and 12.1 of title 27.

 

27-41-13. Protection against insolvency. -- (a) Unless otherwise provided, each health maintenance organization shall deposit with the general treasurer of the state of Rhode Island securities having a market value at all times of at least the amount set forth in this section, which are to be held for the benefit and protection of all the enrollees of the health maintenance organization.

(b)(1) The amount for an organization that is applying for initial licensure shall be the greater of:

(i) Five percent (5%) of its estimated expenditures for health care services for its first year of operation;

(ii) Twice its estimated average monthly uncovered expenditures for its first year of operation; or

(iii) One hundred thousand dollars ($100,000);

(2) At the beginning of each succeeding year, unless not applicable, that organization shall deposit with the general treasurer securities in an amount equal to four percent (4%) of its estimated annual uncovered expenditures for that year.

(c)(1) An organization that is licensed as a health maintenance organization on May 17, 1983, shall make a deposit equal to the larger of:

(i) One percent (1%) of the preceding twelve (12) months of uncovered expenditures; or

(ii) One hundred thousand dollars ($100,000), within six (6) months of May 17, 1983;

(2) On the first day of the organization's first fiscal year beginning six (6) months or more after May 17, 1983, the organization shall make an additional deposit equal to two percent (2%) of its estimated annual uncovered expenditures. In the second fiscal year, if applicable, the additional deposit shall be equal to three percent (3%) of its estimated annual uncovered expenditures for that year, and in the third fiscal year and subsequent years, if applicable, the additional deposit shall be equal to four percent (4%) of its estimated annual uncovered expenditures for each year. Each year's estimate, after the first year of operation, shall reasonably reflect the prior year's operating experience and delivery arrangements.

(d) The director may waive any of the deposit requirements as set forth in subsections (b) and (c), of this section whenever satisfied that the organization has sufficient net worth and an adequate history of generating net income to assure its financial viability for the next year, or its performance and obligations are guaranteed by an organization with sufficient net worth and an adequate history of generating net income, or the assets of the organization or its contracts with insurers, hospital or medical service corporations, governments, or other organizations are sufficient to reasonably assure the performance of its obligations.

(e)(1) When an organization has achieved a net worth not including land, buildings, and equipment of at least one million dollars ($1,000,000) or has achieved a net worth including plan related land, buildings, and equipment of at least five million dollars ($5,000,000), the annual deposit requirement shall not apply;

(2) The annual deposit requirement shall not apply to an organization if the total amount of the deposit of securities is equal to twelve percent (12%) of the HMO's estimated annual uncovered expenditures for the next calendar year, or the capital and surplus requirements for the formation and admittance of an accident and health insurer in this state, whichever is less;

(3) If the organization has a guaranteeing organization which has been in operation for at least five (5) years and has a net worth not including land, buildings, and equipment of at least one million dollars ($1,000,000) or which has been in operation for at least ten (10) years and has a net worth including plan related land, buildings, and equipment of at least five million dollars ($5,000,000), the annual deposit requirement shall not apply.; provided, however, that However, if the guaranteeing organization is sponsoring more than the one organization, the net worth requirement shall be increased by a multiple equal to the number of organizations. This requirement to maintain a deposit in excess of the deposit required of an accident and health insurer shall not apply during any time that the guaranteeing organization maintains a net worth at least equal to the capital and surplus requirements for an accident and health insurer.

(f) All income from the deposit with the general treasurer shall belong to the depositing organization and shall be paid to it as it becomes available. A health maintenance organization that has made a securities deposit with the general treasurer may, at its option, withdraw the securities deposit or any part thereof of the deposit, first having deposited, in lieu thereof of it, a deposit of securities of equal amount and value to that withdrawn.

(g) In any year in which an annual deposit is not required of an organization, at its request, the director shall lower its required deposit by one hundred thousand dollars ($100,000) for each two hundred fifty thousand dollars ($250,000) of net worth not including land, buildings, and equipment, if it, or a guaranteeing organization on its behalf and not for another organization, has in excess of one million dollars ($1,000,000) or in excess of five million dollars ($5,000,000) of net worth, including only health maintenance organization related land, buildings, and equipment contributing to the delivery of health care services; provided, however, that the reductions never bring the required deposit below one hundred thousand dollars ($100,000). If the net worth of an organization or guaranteeing organization no longer supports a reduction of its required deposit, the organization shall immediately redeposit one hundred thousand dollars ($100,000) for each two hundred fifty thousand dollars ($250,000) of reduction, provided that its total deposit does not exceed the maximum required under this section.

(h)(1) Before issuing any certificate of authority, the director shall require that the health maintenance organization have an initial net worth of one million five hundred thousand dollars ($1,500,000) and shall thereafter maintain the minimum net worth required under paragraph (2) of this subsection.

(2) Except as provided in paragraphs subdivisions (3) and (4) of this subsection, every health maintenance organization must:

(i) (a) Maintain a minimum net worth equal to the greater of:

(A) (1) One million dollars ($1,000,000); or

(B) (2) Two percent (2%) of annual premium revenues as reported on the most recent annual financial statement filed with the director on the first one hundred fifty million dollars ($150,000,000) of premium and one percent (1%) of annual premium of the premium in excess of one hundred fifty million dollars ($150,000,000).

(ii) (b) Maintain total adjusted capital at the amount of authorized control level risk based capital as determined under the risk based capital formula in accordance with the managed care organizations risk based capital instructions adopted by the National Association of Insurance Commissioners.

(3) A health maintenance organization licensed before July 1, 1999 must maintain a minimum net worth and total adjusted capital of:

(A) Twenty-five percent (25%) of the amount required by paragraph (2) of this subsection by January 1, 2000;

(B) Fifty percent (50%) of the amount required by paragraph (2) of this subsection by January 1, 2001;

(i) (C) Seventy-five percent (75%) of the amount required by paragraph subdivision (2) of this subsection by January 1, 2002;

(ii) (D) One hundred percent (100%) of the amount required by paragraph subdivision (2) of this subsection by January 1, 2003.

(4) The director may waive any of the net worth and/or total adjusted capital requirements as set forth in this subsection (h) whenever satisfied that the health maintenance organization has sufficient net worth and/or total adjusted capital and an adequate history of generating net income to assure its financial viability for the next year, or its performance and obligations are guaranteed by an organization with sufficient net worth and an adequate history of generating net income, or the assets of the health maintenance organization or its contracts with insurers, hospital or medical service corporations, governments, or other organizations are sufficient to reasonably assure the performance of its obligations; provided, however, that in no event shall the net worth requirement be less than one hundred thousand dollars ($100,000).

(5)(i) (A) In determining net worth, no debt is considered fully subordinated unless the subordination clause is in a form acceptable to the director. Any interest obligation relating to the repayment of any subordinated debt must be similarly subordinated.

(ii) (B) The interest expenses relating to the repayment of any fully subordinated debt are considered covered expenses.

(iii) (C) Any debt incurred by a note meeting the requirements of this section, and otherwise acceptable to the director, are not considered a liability and are recorded as equity.

(i) Each health maintenance organization shall maintain written contracts or other arrangements satisfactory to the director with providers of services, insurers, hospital or medical service corporations, governments, or other organizations to satisfy the director that in the event of insolvency enrollees will not be liable for charges for covered health services received before the time of insolvency and those contracts and other arrangements shall assure that:

(1) Benefits, including professional services, for all enrollees who are confined at the time of insolvency in hospitals, skilled nursing facilities, intermediate care facilities, or home health agencies receiving services covered by the health maintenance organization shall continue to be paid without interruption until the earlier of discharge or ninety (90) days, or in the alternative, for federally qualified health maintenance organizations which are licensed pursuant to this chapter, confinement coverage shall be provided which meets federal standards for federally qualified health maintenance organization plans;

(2) All enrollees will be covered without interruption by the lesser of their current coverage or a fully qualified program as defined in § 42-62-10, or its equivalent as approved by the director, for a period of thirty (30) days following the insolvency, unless enrollees are afforded an opportunity to enroll in another insurance plan as defined in subsection (i) subdivision (3) of this subsection without waiting periods or exclusions or limitations based on health status; and

(3) Enrollees and enrolled groups will be afforded the opportunity within thirty (30) days to purchase other health insurance equivalent to the lesser of their current coverage or a fully qualified program as defined in § 42-62-10 on a group basis if they are enrolled in the health maintenance organization on a group basis and on a direct pay basis otherwise, with full credit for all prepaid premiums without waiting periods or exclusions or limitations based on health status. In the event that a contract providing for coverage commensurate with the lesser of current coverage or a fully qualified program as defined in § 42-62-10 is not reasonably available, the health maintenance organization shall maintain the best insolvency conversion insurance reasonably available in the market place. The director, upon application of the health maintenance organization, must before approving any alternate coverage be satisfied that that alternate coverage reasonably protects enrollees and is in the public interest. The term "insurance" as used in this section means an insurance policy or a contract of insurance with an entity acceptable to the director other than the health maintenance organization, which other entity is available to cover the enrollees of the health maintenance organization in the event of its insolvency. If insolvency conversion protection commensurate with the lesser of current coverage or a fully qualified program as defined in § 42-62-10 becomes available, the lesser shall be obtained by the health maintenance organization within a reasonable time.

(j) All insurance contracts, and other arrangements to satisfy the conditions herein, shall be evidenced by copies of the insurance contracts and arrangements and by a certificate from the insurers and other parties to the contracts or arrangements submitted to the director, which certificate must contain provisions requiring the insurer, and all other parties to the contracts, to notify the director and the health maintenance organization ninety (90) days in advance of any revocation or cancellation or of any significant change in status giving the reason thereof of the action. All insurance contracts shall remain in full force and effect for at least ninety (90) days following written notice by registered mail of cancellation by either party to the director. Each health maintenance organization must present the director with evidence of premium payment in a form and manner acceptable to the director for each premium payment for any insurance arrangement certifying that all premiums are prepaid ninety (90) days in advance and subsequently the health maintenance organization must follow up within a time period acceptable to the director with other evidence of premium payment satisfactory to the director.

 

27-41-19. Rules and regulations. -- No later than January 1, 1996, The director of business regulation and the director of health shall, after notice and hearing, promulgate reasonable rules and regulations, as that are necessary or proper to carry out the provisions of this chapter. Those rules and regulations shall be subject to review in accordance with the provisions of chapter 35 of title 42.

 

27-41-26.1. Patient responsibility - Administrative requirements. -- For health benefit contracts issued, renewed, or delivered on or after January 1, 2002, in this state the following shall apply:

(1) The amount of copayments for physician office visits and hospital emergency room visits shall be printed on the subscriber identification cards issued to insureds.

(2) A schedule of all applicable copayments, by product or by group, in paper or electronic format, or both, shall be published, updated, and distributed to participating providers.

(3) On an annual basis, notification shall be provided to subscribers regarding their responsibility for copayments and deductibles.

 

27-41-30.1. Post-partum hospital stays. -- (a) Every individual or group hospital or medical services plan contract delivered, issued for delivery, or renewed in this state on or after September 1, 1996, shall provide coverage for a forty-eight (48) hour time period in a hospital after a vaginal birth, and ninety-six (96) hours after a Cesarean section for a mother and her newly born child. Any decision to shorten these minimum coverages shall be made by the attending health care provider in consultation with the mother. The decision shall be made in accordance with the standards for guidelines for perinatal care published by the American College of Obstetrics and Gynecology and the American Academy of Pediatrics. The standards shall be relative to early discharge, defined as less than forty-eight (48) hours for a vaginal delivery and ninety-six (96) for a Cesarean delivery. In the case of early discharge, post-delivery care shall include home visits, parent education, assistance and training in breast or bottle feeding and the performance of any necessary and appropriate clinical tests or any other tests or services consistent with the above guidelines.

(b) For the purposes of this section, "attending health care provider" shall include includes the attending obstetrician, pediatrician, family practitioner, general practitioner or certified nurse midwife attending the mother and newly born child.

(c) Any member who is aggrieved by a denial of benefits to be provided under this section may appeal the denial in accordance with regulations of the department of health, which have been promulgated pursuant to chapter 17.12 of title 23. No policy or plan covered under this chapter shall terminate the services, reduce capitation payment, or otherwise penalize an attending physician or other health care provider who orders care consistent with the provisions of this section.

 

27-41-33. Coverage for infertility. -- (a) Any health maintenance organization service contract plan or policy here and after delivered, issued for delivery, or renewed in this state, on or after December 1, 1989, except a contract providing supplemental coverage to Medicare or other governmental programs, which includes pregnancy related benefits, shall provide coverage for medically necessary expenses of diagnosis and treatment of infertility. To the extent that a health maintenance organization provides reimbursement for a test or procedure used in the diagnosis or treatment of conditions other than infertility, those tests and procedures shall not be excluded from reimbursement when provided attendant to the diagnosis and treatment of infertility; provided, that subscriber copayment, not to exceed twenty percent (20%), may be required for those programs and/or procedures the sole purpose of which is the treatment of infertility.

(b) For the purpose of this section, "infertility" shall mean means the condition of an otherwise healthy married individual who is unable to conceive or produce conception during a period of one year.

 

27-41-34. Health maintenance organizations' assessment. -- (a) Notwithstanding any other provisions of law, each domestic HMO shall be charged an assessment to partially support the activities of the division of insurance in the department of business regulation.

(b) Commencing in fiscal year 1990-1991 Each domestic HMO assessment shall be determined in accordance with the following ratio: (1) (i) by dividing the HMO total direct premiums by the total direct premiums, including annuities, less policyholder dividends of all domestic insurance companies plus the total direct premiums of domestic companies licensed or regulated pursuant to chapters 19, 20, 20.1, 20.2, 20.3, 25, and 41 of this title, and chapter 62 of title 42; (2) (ii) and then by multiplying the resulting ratio times two hundred thousand dollars ($200,000).

(c) The minimum assessment charged shall be the greater of the sum determined by subsection (b) of this section or one thousand dollars ($1,000).

 

27-41-36. Services of midwives. -- Every health maintenance organization plan contract delivered, issued for delivery, or renewed in this state on or after January 1, 1991, shall provide coverage for the services of licensed midwives in accordance with each health maintenance organization's respective principles and mechanisms of reimbursement, credentialing, and contracting if the services are within the licensed midwives' area of professional competence as defined by regulations promulgated pursuant to § 23-13-9 and are currently reimbursed when rendered by any other licensed health care provider. No health maintenance organization may require supervision, signature, or referral by any other health care provider as a condition of reimbursement to a licensed midwife whose services are provided pursuant to § 27-41-5(a)(6)(ii), except when the requirements are also applicable to other categories of health care providers. Further, no health maintenance organization or patient may be required to pay for duplicate services actually rendered by both a licensed midwife and any other health care provider. Direct payment for licensed midwives will be contingent upon services rendered in a licensed health care facility and for services rendered in accordance with rules and regulations promulgated by the department of health; provided, however, that this provision shall not prohibit payment for services pursuant to § 42-62-26 or for other services reimbursed by third party payors.

 

27-41-38. Drug coverage. -- No health maintenance organization that provides coverage for prescription drugs under a group plan master contract delivered, issued for delivery, or renewed in this state on or after July 1, 1991, may require any person covered under the contract to obtain prescription drugs from a mail order pharmacy as a condition of obtaining benefits for the drugs.

 

27-41-39. Certified registered nurse practitioners and psychiatric and mental health nurse clinical specialists. -- (a) Every individual or group policy or contract delivered, issued for delivery, or renewed by a health maintenance organization in this state on or after January 1, 1992, will shall provide coverage for the services of certified registered nurse practitioners and psychiatric and mental health nurse clinical specialists to subscribers, if those services are within the certified registered nurse practitioner's or psychiatric and mental health nurse clinical specialist's area of professional competence as established by education and certification, and are currently reimbursed when rendered by any other health care provider. No health maintenance organization may be required to pay for duplicative services actually rendered by a certified nurse practitioner and any other health care provider.

(b) Nothing in this chapter shall preclude the conducting of managed care reviews and medical necessity reviews by an insurer or hospital or medical service corporation or health maintenance organization.

 

27-41-40. Certified counselors in mental health and therapists in marriage and family practice. -- (a) Every individual or group policy or contract delivered, issued for delivery or renewed by a health maintenance organization in this state on or after January 1, 1994, will shall, when deemed medically necessary by the health maintenance organization in accordance with its standard medical management protocols as approved by the health department and within the contractual benefit limits, provide coverage for the services of counselors in mental health licensed pursuant to § 5-63.2-9 and therapists in marriage and family practice licensed pursuant to § 5-63.2-10.

(b) It shall remain within the sole discretion of the health maintenance organization as to which certified counselors in mental health and certified therapists in marriage and family practice it shall contract with. Nothing contained herein in this section shall require the health maintenance organization to provide coverage other than in conjunction with a related medical illness.

 

27-41-41. New cancer therapies - Under investigation. -- Every individual or group hospital or medical expense insurance policy or individual or group hospital or medical service plan contract delivered, issued for delivery or renewed in this state on or after January 1, 1995, shall provide coverage for new cancer therapies still under investigation as outlined in this chapter.

 

27-41-43. Mastectomy treatment. -- (a) Every individual or group health insurance contract, plan, or policy delivered, issued for delivery or renewed in this state on or after January 1, 1997, which provides medical coverage that includes coverage for physician services in a physician's office, and every policy which provides major medical or similar comprehensive-type coverage, shall include coverage for prosthetic devices and or reconstructive surgery to restore and achieve symmetry for the patient incident to a mastectomy. Coverage for prosthetic devices and reconstructive surgery shall be subject to the deductible and coinsurance conditions applied to the mastectomy and all other terms and conditions applicable to other benefits. Any reconstructive surgery under this section must be performed within eighteen (18) months of the original mastectomy. As used in this section, "mastectomy" means the removal of all or part of the breast to treat a breast cancer, tumor, or mass.

(b) Any provision in any contract issued, amended, delivered or renewed in this state on or after January 1, 1997, which is in conflict with this section shall be of no force or effect.

(c) As used in this section, "prosthetic devices" means and includes the provision of initial and subsequent prosthetic devices pursuant to an order of the patient's physician or surgeon.

(d)(1) Nothing in this section shall be construed to require an individual or group policy to cover the surgical procedure known as mastectomy or to prevent application of deductible or copayment provisions contained in the policy or plan, nor shall this section be construed to require that coverage under an individual or group policy be extended to any other procedures.

(2) Nothing in this section shall be construed to authorize an insured or plan member to receive the coverage required by this section if that coverage is furnished by a nonparticipating provider, unless the insured or plan member is referred to that provider by a participating physician, nurse practitioner, or certified nurse midwife providing care.

(3) Nothing in this section shall preclude the conducting of managed care reviews and medical necessity reviews, by an insurer, hospital or medical service corporation or health maintenance organization.

 

27-41-43.1. Insurance coverage for mastectomy hospital stays. -- (a) The Rhode Island general assembly recognizes that breast cancer is a unique illness with both a physical and emotional impact on patients. Every individual or group hospital or medical services plan contract delivered, issued for delivery, or renewed in this state on or after September 1, 1997, shall provide coverage for a minimum forty-eight (48) hour time period in a hospital after the surgical procedures known as a mastectomy, and a minimum twenty-four (24) hours after an axilary node dissection. Any decision to shorten these minimum coverages shall be made by the attending physician in consultation with and upon agreement by the patient. If the patient participates in an early discharge, defined as in-patient care following a mastectomy that is less than forty-eight (48) hours and in-patient care following an axilary node dissection that is less than twenty-four (24) hours, coverage shall include a minimum of one home visit conducted by a physician or registered nurse.

(b) Any subscriber who is aggrieved by a denial of benefits to be provided under this section may appeal the denial in accordance with regulations of the department of health, which have been promulgated pursuant to chapter 17.12 of title 23. No policy or plan covered under this chapter shall terminate the services, reduce capitation payment, or otherwise penalize an attending physician or other health care provider who orders care consistent with the provisions of this section.

(c) Notice. All plans subject to this section shall provide notice to each enrollee:

(1) In the next mass mailing made by the plan to the employee; or

(2) As part of any informational packet sent to the enrollee.

 

27-41-44. Diabetes treatment. -- (a) Every individual or group health insurance contract, plan, or policy delivered, issued for delivery or renewed in this state on or after January 1, 1997, which provides medical coverage that includes coverage for physician services in a physician's office and every policy which provides major medical or similar comprehensive-type coverage shall include coverage for the following equipment and supplies for the treatment of insulin treated diabetes, non-insulin treated diabetes, and gestational diabetes when medically appropriate and prescribed by a physician blood glucose monitors and blood glucose monitors for the legally blind, test strips for glucose monitors and visual reading, insulin, injection aids, cartridges for the legally blind, syringes, insulin pumps and appurtenances thereto to them, insulin infusion devices, oral agents for controlling blood sugar and therapeutic/molded shoes for the prevention of amputation. Upon the approval of new or improved diabetes equipment and supplies by the Food and Drug Administration, all policies governed by this chapter shall guarantee coverage of this new diabetes equipment and supplies when medically appropriate and prescribed by a physician. These policies shall also include coverage, when medically necessary, for diabetes self-management education to ensure that persons with diabetes are instructed in the self-management and treatment of their diabetes, including information on the nutritional management of diabetes. This coverage for self-management education and education relating to medical nutrition therapy shall be limited to medically necessary visits upon the diagnosis of diabetes, where a physician diagnoses a significant change in the patient's symptoms or conditions which necessitate changes in a patient's self-management, or where reeducation or refresher training is necessary. This education, when medically necessary and prescribed by a physician, may be provided only by the physician or, upon his/her referral to an appropriately licensed and certified health care provider and may be conducted in group settings. Coverage for self-management education and education relating to medical nutrition therapy shall also include home visits when medically necessary.

(b) Benefit plans offered by a health maintenance organization may impose copayment and/or deductibles for the benefits mandated by this chapter; however. However, in no instance shall the copayment or deductible amount be greater than the copayment or deductible amount imposed for other supplies, equipment, or physician office visits. Benefits for services under this chapter shall be reimbursed in accordance with the respective principles and mechanisms of reimbursement for each insurer, hospital, or medical service corporation, or health maintenance organization.

 

27-41-49. Third party reimbursement for services of certain health care workers. --

(a) Every individual or group health insurance contract, plan or policy delivered, issued or renewed by an insurer, health maintenance organization, nonprofit or for profit health service corporation on or after January 1, 1998, which provides benefits to individual subscribers and members within the state, or to all group members having a principal place of employment within the state, shall provide benefits for services rendered by a certified registered nurse anesthetist designated as a certified registered nurse anesthetist by the board of nurse registration and nursing education; provided, however, that the following conditions are met:

(1) The certified registered nurse anesthetist provides certain health care services under the supervision of anesthesiologists, licensed physicians or licensed dentists in accordance with § 5-34.2-2(c), which requires substantial specialized knowledge, judgment and skill related to the administration of anesthesia, including pre-operative and post-operative assessment of patients; administering anesthetics; monitoring patients during anesthesia; management of fluids in intravenous therapy and management of respiratory care; and

(2) The policy or contract currently provides benefits for identical services rendered by a provider of health care licensed by the state; and

(3) The certified registered nurse anesthetist is not a salaried employee of the licensed hospital or facility for which the health maintenance organization has an alternative contractual relationship to fund the services of a certified registered nurse anesthetist.

(b) It shall remain within the sole discretion of the health maintenance organization as to which certified registered nurse anesthetists it shall contract with. Reimbursement shall be provided according to the respective principles and policies of the health maintenance organization; provided, however, that no health maintenance organization may be required to pay for duplicative services actually rendered by a certified registered nurse anesthetist and any other health care provider. Nothing contained herein in this section shall preclude the health maintenance organization from conducting managed care, medical necessity or utilizaton utilization review.

 

27-41-49.1. Third party reimbursement for services of registered nurse first assistants. -- (a) Every individual or group health insurance contract, plan or policy delivered, issued or renewed by an insurer, health maintenance organization, nonprofit or for profit health service corporation on or after January 1, 2000, which provides benefits to individual subscribers and members within the state, or to all group members having a principal place of employment within the state, shall provide benefits for services rendered by a registered nurse first assistant designed as such;, provided, however, that the following conditions are met:

(1) The registered nurse first assistant provides certain health care services under the supervision of a licensed physician; is currently licensed as a registered nurse in Rhode Island; has successfully completed a course in preparing the registered nurse as a first assistant in accordance with the Association of Operating Room Nurses core curriculum guide for the registered nurse first assistant and includes a minimum of one academic year in a college or university with didactic instruction and clinical internship programs; and is certified in perioperative nursing by the Certification Board of Perioperative Nursing (minimum of two years perioperative experience);

(2) The policy or contract, currently provides benefits for identical services rendered by a provider of health care licensed by the state; and

(3) The registered nurse first assistant is not a salaried employee of the licensed hospital or facility for which the health maintenance organization has an alternative contractual relationship to fund the services of a registered nurse first assistant.

(b) It remains within the sole discretion of the health maintenance organization as to which registered nurse first assistant it contracts with. Reimbursement provided according to the respective principles and policies of the health maintenance organization; provided, however, that no health maintenance organization is required to provide direct reimbursement, or pay for duplicative services actually rendered by a registered nurse first assistant and any other health care provider. Nothing contained in this section precludes the health maintenance organization from conducting managed care, medical necessity or utilization review.

 

27-41-50. Human leukocyte antigen testing. -- Every individual or group hospital or medical services plan contract delivered or renewed in this state on or after March 19, 1998 shall include coverage of the cost for human leukocyte antigen testing, also referred to as histocompatibility locus antigen testing, for A, B and DR antigens for utilization in bone marrow transplantation. The testing must be performed in a facility which is accredited by the American Association of Blood Banks or its successors, and is licensed under the Clinical Laboratory Improvement Act, 42 U.S.C. § 263a, as it may be from time to time amended. At the time of the testing, the person being tested must complete and sign an informed consent form which also authorizes the results of the test to be used for participation in the National Marrow Donor Program. The group hospital or medical services plan contract may limit each subscriber to one of these testings per lifetime.

 

27-41-53.1. Genetic information. -- (a) Except as provided in chapter 37.3 of title 5, insurance administrators, health plans and providers shall be prohibited from releasing genetic information without prior written authorization of the individual. Written authorization shall be required for each disclosure and include to whom the disclosure is being made. An exception shall exist for those participating in research settings governed by the federal policy for the protection of human research subjects (also known as "The Common Rule"). Tests conducted purely for research are excluded from the definition, as are tests for somatic (as opposed to heritable) mutations, and testing for forensic purposes.

(b) No individual or group health insurance contract, plan, or policy delivered, issued for delivery, or renewed in this state on or after January 1, 2002, which provides medical coverage that includes coverage for physician services in a physician's office, and every policy which provides major medical or similar comprehensive-type coverage excluding disability income, long term care and insurance supplemental policies which only provide coverage for specified diseases or other supplemental policies, shall:

(1) Use genetic information or request for genetic information or the results of genetic information or other genetic information to reject, deny, limit, cancel, refuse to renew, increase the rates of, affect the terms or conditions of, or otherwise affect a group or an individual's health insurance policy, contract, or plan;

(2) Request or require genetic information for the purpose of determining whether or not to issue or renew an individual's health benefits coverage, to set reimbursement/co-pay levels or determine covered benefits and services;

(3) Release the results of genetic information without the prior written authorization of the individual from whom the information was obtained, except in a format whereby by which individual identifiers are removed, encrypted, or encoded so that the identity of the individual is not disclosed. A recipient of information pursuant to this section may use or disclose the information solely to carry out the purpose for which the information was disclosed. Authorization shall be required for each re-disclosure. An exception shall exist for participation in research settings governed by the federal policy for the protection of human research subjects (also known as "The Common Rule");

(4) Request or require information as to whether an individual has genetic information, or participated in genetic information of any kind, whether for clinical or research purposes.

(c) For the purposes of this section, "genetic information" is information about genes, gene product, or inherited characteristics that may derive from the individual or a family member.

 

27-41-54. Disassociation prohibited. -- Notwithstanding any provision of the general or public laws to the contrary, no individual or group health insurance contract, plan, or policy delivered, issued for delivery, or renewed in this state on or after July 23, 1998, which provides medical coverage for physician services in a physician's office, and no policy which provides major medical or similar comprehensive-type coverage for specified diseases or other supplemental polices, shall prohibit a medical provider from ceasing an association with and participation in one health maintenance organization and associating and participating with another health maintenance organization doing business in this state.

 

27-41-59. F.D.A. approved prescription contraceptive drugs and devices. -- (a) Every individual or group health insurance contract, plan, or policy that provides prescription coverage and is delivered, issued for delivery, or renewed in this state on or after January 1, 2001, shall provide coverage for F.D.A. approved contraceptive drugs and devices requiring a prescription. Provided, however, that nothing in this subsection shall be deemed to mandate or require coverage for the prescription drug RU 486.

(b) Notwithstanding any other provision of this section, any health maintenance corporation may issue to a religious employer an individual or group health insurance contract, plan, or policy that excludes coverage for prescription contraceptive methods which are contrary to the religious employer's bona fide religious tenets.

(c) As used in this section, "religious employer" means an employer that is a "church or a qualified church-controlled organization" as defined in 26 U.S.C. § 3121.

(d) Every religious employer that invokes the exemption provided under this section shall provide written notice to prospective enrollees prior to enrollment with the plan, listing the contraceptive health care services the employer refuses to cover for religious reasons.

 

27-41-64. Prompt processing of claims. -- (a) A health care entity or health plan operating in the state shall pay all complete claims for covered health care services submitted to the health care entity or health plan by a health care provider or by a policyholder within forty (40) calendar days following the date of receipt of a complete written claim or within thirty (30) calendar days following the date of receipt of a complete electronic claim. Each health plan shall establish a written standard defining what constitutes a complete claim and shall distribute this standard to all participating providers.

(b) If the health care entity or health plan denies or pends a claim, the health care entity or health plan shall have thirty (30) calendar days from receipt of the claim to notify in writing the health care provider or policyholder of any and all reasons for denying or pending the claim and what, if any, additional information is required to process the claim. No health care entity or health plan may limit the time period in which additional information may be submitted to complete a claim.

(c) Any claim that is resubmitted by a health care provider or policyholder shall be treated by the health care entity or health plan pursuant to the provisions of subsection (a) of this section.

(d) A health care entity or health plan which fails to reimburse the health care provider or policyholder after receipt by the health care entity or health plan of a complete claim within the required timeframes shall pay to the health care provider or the policyholder who submitted the claim, in addition to any reimbursement for health care services provided, interest which shall accrue at the rate of twelve percent (12%) per annum commencing on the thirty-first (31st) day after receipt of a complete electronic claim or on the forty-first (41st) day after receipt of a complete written claim, and ending on the date the payment is issued to the health care provider or the policyholder.

(e) Exceptions to the requirements of this section are as follows:

(1) No health care entity or health plan operating in the state shall be in violation of this section for a claim submitted by a health care provider or policyholder if:

(i) Failure to comply is caused by a directive from a court or federal or state agency;

(ii) The health care entity or health plan is in liquidation or rehabilitation or is operating in compliance with a court-ordered plan of rehabilitation; or

(iii) The health care entity or health plan's compliance is rendered impossible due to matters beyond its control which are not caused by it.

(2) No health care entity or health plan operating in the state shall be in violation of this section for any claim: (i) initially submitted more than ninety (90) days after the service is rendered, or (ii) resubmitted more than ninety (90) days after the date the health care provider received the notice provided for in § 27-18-61(b); provided, however, this exception shall not apply in the event compliance is rendered impossible due to matters beyond the control of the health care provider and were not caused by such the health care provider.

(3) No health care entity or health plan operating in the state shall be in violation of this section while the claim is pending due to a fraud investigation by a state or federal agency.

(4) No health care entity or health plan operating in the state shall be obligated under this section to pay interest to any health care provider or policyholder for any claim if the director of the department of business regulation finds that such the entity or plan is in substantial compliance with this section. A health care entity or health plan seeking such a that finding from the director shall submit such any documentation as that the director shall require. A health care entity or health plan which is found to be in substantial compliance with this section shall thereafter submit such any documentation as the the director may require on an annual basis for the director to assess ongoing compliance with this section.

(5) A health care entity or health plan may petition the director for a waiver of the provision of this section for a period not to exceed ninety (90) days in the event the health care entity or health plan is converting or substantially modifying its claims processing systems.

(f) For purposes of this section, the following definitions shall apply:

(1) "Claim" means: (i) a bill or invoice for covered services; (ii) a line item of service; or (iii) all services for one patient or subscriber within a bill or invoice.

(2) "Date of receipt" means the date the health care entity or health plan receives the claim whether via electronic submission or as a paper claim.

(3) "Health care entity" means a licensed insurance company or nonprofit hospital or medical or dental service corporation or plan or health maintenance organization, or a contractor as described in § 23-17.13-2(2), that operates a health plan.

(4) "Health care provider" means an individual clinician, either in practice independently or in a group, who provides health care services, and otherwise referred to as a non-institutional provider.

(5) "Health care services" include, but are not limited to, medical, mental health, substance abuse, dental and any other services covered under the terms of the specific health plan.

(6) "Health plan" means a plan operated by a health care entity that provides for the delivery of health care services to persons enrolled in such the plans through:

(i) Arrangements with selected providers to furnish health care services; and/or

(ii) Financial incentive for persons enrolled in the plan to use the participating providers and procedures provided for by the health plan.

(7) "Policyholder" means a person covered under a health plan or a representative designated by such that person.

(8) "Substantial compliance" means that the health care entity or health plan is processing and paying ninety-five percent (95%) or more of all claims within the time frame provided for in § 27-18-61(a) and (b).

(g) Any provision in a contract between a health care entity or a health plan and a health care provider which is inconsistent with this section shall be void and of no force and effect.

 

SECTION 86. Section 27-41-55 of the General Laws in Chapter 27-41 entitled "Health Maintenance Organizations" is hereby repealed in its entirety.

 

27-41-55. Conditions of coverage. - As provided in § 27-41-41, coverage is extended to new cancer therapies still under investigation when the following circumstances are present:

(a) Treatment is being provided pursuant to a phase II, III or IV clinical trial which has been approved by the National Institutes of Health (NIH) in cooperation with the National Cancer Institute (NCI), community clinical oncology programs; the Food and Drug Administration in the form of an investigational new drug (IND) exemption; the Department of Veterans' Affairs; or a qualified nongovernmental research entity as identified in the guidelines for NCI cancer center support grants;

(b) The proposed therapy has been reviewed and approved by a qualified institutional review board (IRB);

(c) The facility and personnel providing the treatment are capable of doing so by virtue of their experience, training, and volume of patients treated to maintain expertise;

(d) The patients receiving the investigational treatment meet all protocol requirements;

(e) There are no clearly superior, noninvestigational alternatives to the protocol treatment;

(f) The available clinical or preclinical data provide a reasonable expectation that the protocol treatment will be at least as efficacious as the noninvestigational alternative; and

(g) The coverage of new cancer therapy treatment provided pursuant to a phase II clinical trial is not required for only the portion of that treatment as is provided as part of the phase II clinical trial and is otherwise funded by a national agency, such as the National Cancer Institute, the Veteran's Administration, the Department of Defense, or funded by commercial organizations such as the biotechnical and/or pharmaceutical industry or manufacturers of medical devices. Any portions of a phase II trial which are customarily funded by government, biotechnical and/or pharmaceutical and/or medical device industry sources in Rhode Island or in other states shall continue to be funded in Rhode Island and coverage pursuant to this section supplements, does not supplant, customary funding.

SECTION 87. Section 27-43-2 of the General Laws in Chapter 27-43 entitled "Captive Insurance Companies" is hereby amended to read as follows:

27-43-2. Incorporation of captive insurance companies in this state. -- (a) A subsidiary captive insurance company shall be incorporated as a stock insurance company with its capital divided into shares and held by the stockholders.

(b) An association captive insurance company or an industrial insured captive insurance company may be:

(1) Incorporated as a stock insurance company with its capital divided into shares and held by the stockholders; or

(2) Incorporated as a mutual insurance company without capital stock, the governing body of which is elected by the member organizations of its association; or

(3) Organized as a reciprocal insurer in accordance with chapter 17 of this title.

(c) A captive insurance company which is formed as a corporation shall have not less than three (3) incorporators of whom not less than two (2) shall be residents of this state.

(d) (1) In the case of a captive insurance company formed as a corporation, before the articles of association are transmitted to the secretary of state, the incorporators shall petition the commissioner to issue a certificate setting forth his or her finding that the establishment and maintenance of the proposed corporation will promote the general good of the state. In arriving at the finding, the commissioner shall consider:

(i) (A) The character, reputation, financial responsibility, insurance experience, and business qualifications of the incorporators and the proposed officers and directors;

(ii) (B) The sources and availability of its capital; and

(iii) (C) Other financial and business matters that the commissioner deems advisable.

(2) In the case of a captive insurance company formed as a reciprocal insurer, the organizers shall petition the commissioner to issue a certificate setting forth the commissioner's finding that the establishment and maintenance of the proposed association will promote the general good of the state. In arriving at such a that finding the commissioner shall consider:

(i) The character, reputation, financial responsibility, insurance experience, and business qualifications of the organizers and the attorney in fact;

(ii) The sources and availability of its capital; and

(iii) Other financial and business matters that the commissioner shall deem advisable.

(e) The articles of association, the certificate, and the organization fee shall be transmitted to the secretary of state, who shall thereupon then record both the articles of incorporation and the certificate.

(f) The capital stock of a captive insurance company incorporated as a stock insurance company shall be issued at not less than par value, and all capital insurance companies shall have the minimum capital provided in § 27-43-4.

(g) (1) In the case of a captive insurance company formed as a corporation in this state, at least one of the members of the board of directors of a captive insurance company incorporated in this state shall be a resident of this state.

(2) In the case of a captive insurance company formed as a reciprocal insurer in this state, at least one of the members of the subscribers' advisory committee shall be a resident of this state.

(h) Every captive insurance company referenced within this subsection has the powers contained in this chapter, and is subject to the provisions of this chapter, chapter 1 of this title, and chapter 1.1 of title 7; provided, that insofar as the provisions of this chapter are inconsistent with the provisions of chapter 1 of this title or chapter 1.1 of title 7, the provisions of this chapter are controlling.

(i) Captive insurance companies formed as corporations under the provisions of this chapter have the privileges and are subject to the provisions of the general corporation law and the applicable provisions contained in this chapter. In the event of conflict between the provisions of the general corporation law and the provisions of this chapter, this chapter controls.

(j) Captive insurance companies formed as reciprocal insurers under the provisions of this chapter have all the privileges and are subject to all the obligations imposed by chapter 17 of this title in addition to the applicable provisions of this chapter. In the event of a conflict between the provisions of chapter 17 and the provisions of this chapter, this chapter controls. However, to the extent that chapter 17 also subjects a reciprocal insurer to the other provisions of this title, these other provisions are not applicable to a reciprocal insurer formed under this chapter unless these provisions are expressly made applicable to these captive insurance companies by this chapter.

(k) The articles of incorporation or bylaws of a captive insurance company formed as a corporation may authorize a quorum of a board of directors to consist of no fewer than one third (1/3) of the fixed or a majority of the prescribed number of directors as determined by the charter or the bylaws of the corporation or by paragraph 34 of section 1.1 of title 7 § 7-1.1-34.

(l) The subscribers' agreement or other organizing document of a captive insurance company formed as a reciprocal insurer may authorize a quorum of a subscriber's advisory committee to consist of no less than one third (1/3) of the number of its members.

 

SECTION 88. Sections 27-46-4 and 27-46-8 of the General Laws in Chapter 27-46 entitled "Risk Retention Act" are hereby amended to read as follows:

 

27-46-4. Risk retention groups not chartered in this state. -- Risk retention groups chartered and licensed in states other than this state and seeking to do business as a risk retention group in this state shall comply with the laws of this state as follows:

(1) Notice of operations and designation of commissioner as agent.

(i) Before offering insurance in this state, a risk retention group shall submit to the commissioner:

(A) A statement identifying the state or states in which the risk retention group is chartered and licensed as a liability insurance company, charter date, its principal place of business, and such any other information, including information on its membership, as that the commissioner of this state may require to verify that the risk retention group is qualified under § 27-46-2(11);

(B) A copy of its plan of operations or feasibility study and revisions of the plan or study submitted to the state in which the risk retention group is chartered and licensed; provided, however, that the provision relating to the submission of a plan of operation or feasibility study shall not apply with respect to any line or classification of liability insurance which:

(I) Was defined in § 15 U.S.C. 3901 et seq. before October 27, 1986; and

(II) Was offered before that date by any risk retention group which had been chartered and operating for not less than three (3) years before that date;

(ii) The risk retention group shall submit a copy of any revision to its plan of operation or feasibility study required by § 27-46-3(b) at the same time that the revisions is submitted to the commissioner of its chartering state; and

(iii) The risk retention group shall submit a statement of registration which designates the commissioner as its agents for the purpose of receiving service of legal documents or process;

(2) Financial condition. Any risk retention group doing business in this state shall submit to the commissioner:

(i) A copy of the group's financial statement submitted annually to the state in which the risk retention group is chartered and licensed which shall be certified by an independent public accountant and contain a statement of opinion on loss and loss adjustment expense reserves made by a member of the American academy of actuaries or a qualified loss reserve specialist, under criteria established by the national association of insurance commissioners;

(ii) A copy of each examination of the risk retention group as certified by the commissioner or public official conducting the examination;

(iii) Upon request by the commissioner, a copy of any information or document pertaining to any outside audit performed with respect to the risk retention group; and

(iv) Such Any information as that may be required to verify its continuing qualification as a risk retention group under § 27-46-2(11);

(3) Taxation.

(i) Each risk retention group shall be liable for the payment of premium taxes and taxes on premiums of direct business for risks resident or located within this state, and shall report to the commissioner the net premiums written for risks resident or located within this state. The risk retention group shall be subject to taxation, and any applicable fines and penalties related thereto to taxation, on the same basis as a foreign admitted insurer;

(ii) To the extent licensed agents or brokers or insurance producers are utilized pursuant to § 27-46-12, they shall report to the commissioner the premiums for direct business for risks resident or located within this state which those licensees have placed with or on behalf of a risk retention group not chartered in this state;

(iii) To the extent that insurance agents or brokers or producers are utilized pursuant to § 27-46-12, the agent or broker or insurance producers shall keep a complete and separate record of all policies procured from each risk retention group, which record shall be open to examination by the commissioner. The total cost of the examinations shall be paid for in the same manner as set forth in § 27-13-1. These records shall, for each policy and each kind of insurance provided thereunder under them, include the following:

(A) The limit of liability;

(B) The time period covered;

(C) The effective date;

(D) The name of the risk retention group which issued the policy;

(E) The gross premium charged; and

(F) The amount of return premiums, if any;

(4) Adherence to fair claims settlement practices. Any risk retention group, its agents, and representatives shall comply with any law or regulations regarding claims settlement practices;

(5) Deceptive, false, or fraudulent practices. Any risk retention group shall comply with and be subject to the laws of this state regarding deceptive, false, or fraudulent acts or practices;

(6) Examination regarding financial condition. Any risk retention group must submit to an examination by the commissioner to determine its financial condition if the commissioner of the jurisdiction in which the group is chartered and licensed has not initiated an examination or does not initiate an examination within sixty (60) days after a request by the commissioner of this state. Any examination shall be coordinated to avoid unjustified repetition and conducted in an expeditious matter and in accordance with the NAIC's examiner handbook. The total cost of the examination shall be paid for in the same manner as set forth in § 27-13-1;

(7) Notice of purchasers. Every application form for insurance from a risk retention group, and every policy, on its front and declaration pages, issued by a risk retention group, shall contain in ten (10) point type the following notice:

NOTICE

THIS POLICY IS ISSUED BY YOUR RISK RETENTION GROUP. YOUR RISK RETENTION GROUP MAY NOT BE SUBJECT TO ALL OF THE INSURANCE LAWS AND REGULATIONS OF YOUR STATE. STATE INSURANCE INSOLVENCY GUARANTY FUNDS ARE NOT AVAILABLE FOR YOUR RISK RETENTION GROUP.

(8) Prohibited acts regarding solicitation or sale. The following acts by a risk retention group are hereby prohibited:

(i) The solicitation or sale of insurance by a risk retention group to any person who is not eligible for membership in the group; and

(ii) The solicitation or sale of insurance, by, or operation of, a risk retention group that is in hazardous financial condition or financially impaired;

(9) Prohibition on ownership by an insurance company. No risk retention group shall be allowed to do business in this state if an insurance company is directly or indirectly a member or owner of the risk retention group, other than in the case of a risk retention group all of whose members are insurance companies;

(10) Prohibited coverage. The terms of any insurance policy issued by any risk retention group shall not provide, or be construed to provide, coverage prohibited generally by statute of this state or declared unlawful by the highest court of this state whose law applies to the policy;

(11) Delinquency proceedings. A risk retention group not chartered in this state and doing business in this state shall comply with a lawful order issued in a voluntary dissolution proceeding or in a delinquency or liquidation proceeding commenced by the state insurance commissioner if there has been a finding of financial impairment after an examination under subsection subdivision (6) of this section; and

(12) Penalties. A risk retention group that violates any provision of this chapter will be subject to fines and penalties including revocation of its right to do business in this state, applicable to licensed insurers generally.; and

(13) Operation prior to enactment of this chapter. In addition to complying with the requirements of this section, any risk retention group operating in this state prior to enactment of this chapter shall, within thirty (30) days after June 18, 1991, comply with the provision of subsection (1)(i).

 

27-46-8. Notice and registration requirements of purchasing groups. -- (a) A purchasing group which intends to do business in this state shall, prior to doing business, furnish notice to the commissioner which shall:

(1) Identify the state in which the group is domiciled;

(2) Identify all other states in which the group intends to do business;

(3) Specify the lines and classifications of liability insurance which the purchasing group intends to purchase;

(4) Identify the insurance company or companies from which the group intends to purchase its insurance and the domicile of the company;

(5) Specify the method by which, and the person or persons, if any, through whom insurance will be offered to its members whose risks are resident or located in this state;

(6) Identify the principal place of business of the group; and

(7) Provide such any other information as that may be required by the commissioner to verify that the purchasing group is qualified under § 27-46-2(10).

(b) A purchasing group shall, within ten (10) days, notify the commissioner of any changes in any of the items set forth in subsection (a) of this section.

(c) The purchasing group shall register with and designate the commissioner as its agent solely for the purpose of receiving service of legal documents or process, for which a filing fee shall be determined by the commissioner, except that these requirements shall not apply in the case of a purchasing group which only purchases insurance that was authorized under the federal Products Liability Risk Retention Act of 1981, 15 U.S.C. § 3901 et seq., and:

(1) Which in any state of the United States:

(i) Was domiciled before April 1, 1986; and

(ii) Is domiciled on and after October 27, 1986;

(2) Which:

(i) Before October 27, 1986 purchased insurance from an insurance carrier licensed in any state; and

(ii) Since October 27, 1986 purchased its insurance from an insurance carrier licensed in any state; or

(3) Which was a purchasing group under the requirements of 15 U.S.C. § 3901 et seq. before October 27, 1986.

(d) Each purchasing group that is required to give notice pursuant to subsection (a) shall also furnish the information that may be required by the commissioner to:

(1) Verify that the entity qualifies as a purchasing group;

(2) Determine where the purchasing group is located; and

(3) Determine appropriate tax treatment.

(e) Any purchasing group which was doing business in this state prior to the enactment of this chapter, within thirty (30) days after June 18, 1991, shall furnish notice to the commissioner pursuant to the provisions of subsection (a) and furnish the information that may be required pursuant to subsections (b) and (c).

 

SECTION 89. Section 27-49-3.1 of the General Laws in Chapter 27-49 entitled "Motor Vehicle Theft and Motor Vehicle Insurance Fraud Reporting - Immunity Act" is hereby amended to read as follows:

 

27-49-3.1. Disclosure of personal information obtained in connection with motor vehicle records. -- (a) Purpose. The purpose of this section is to implement the federal Driver's Privacy Protection Act of 1994 ("DPPA"), 18 U.S.C. § 2721.

(b) Definitions. As defined in 18 U.S.C. § 2725, the following definitions apply to this section:

(1) "Motor vehicle record" means any record that pertains to a motor vehicle operator's permit, motor vehicle title, motor vehicle registration, or identification card issued by the department of motor vehicles;

(2) "Person" means an individual, organization, or entity, but does not include a state or agency thereof of a state; and

(3) "Personal information" means information that identifies an individual, including an individual's photograph, social security number, driver identification number, name, address (but not the 5 digit zip code), telephone number, and medical or disability information, but does not include information on vehicular accidents, driving violations, and driver's status.

(c) Prohibition on release and use of certain personal information from state motor vehicle records.

(1) In general. Except as provided in subsection (c) subdivision (2) of this section, the department of motor vehicles, and any officer, employee, or contractor thereof of the department, shall not knowingly disclose or otherwise make available to any person or entity personal information about any individual obtained by the department in connection with a motor vehicle record.

(2) Permissible uses. Personal information referred to in subsection (c) subdivision (1) of this section shall be disclosed for use in connection with matters of motor vehicle or driver safety and theft, motor vehicle emissions, motor vehicle product alterations, recalls, or advisories, performance monitoring of motor vehicles and dealers by motor vehicle manufacturers, and removal of nonowner records from the original owner records of motor vehicles manufacturers to carry out the purposes of the Automobile Information Disclosure Act, 15 U.S.C. § 1231 et seq., the Motor Vehicle Information and Cost Saving Act (see now 49 U.S.C. § 32101 et seq.), the National Traffic and Motor Vehicle Safety Act of 1966 (see now 49 U.S.C. § 30101 et seq.), and Anti-Car Theft Act of 1992 (see now 49 U.S.C. § 32101 et seq.), and the Clean Air Act, 42 U.S.C. § 7401 et seq., and may be disclosed as follows:

(i) (a) For use by any government agency, including any court or law enforcement agency, in carrying out its functions, or any private person or entity acting on behalf of a federal, state, or local agency in carrying out its functions.

(ii) (b) For use in connection with matters of motor vehicle or driver safety and theft; motor vehicle emissions; motor vehicle product alterations, recalls or advisories; performance monitoring of motor vehicles, motor vehicle parts and dealers; motor vehicle market research activities, including survey research; and removal of nonowner records from the original owner records of motor vehicle manufacturers.

(iii) (c) For use in the normal course of business by a legitimate business or its agents, employees, or contractors, but only:

(A) (i) To verify the accuracy of personal information submitted by the individual to the business of its agents, employees, or contractors, and

(B) (ii) If the information as submitted is not correct or is no longer correct, to obtain the correct information, but only for the purposes of preventing fraud by pursuing legal remedies against, or recovering on a debt or security interest against, the individual.

(iv) (d) For use in connection with any civil, criminal, administrative, or arbitral proceeding in any federal, state, or local agency or before any self-regulatory body, including the service of process, investigation in anticipation of litigation, and the execution or enforcement of judgments and orders, or pursuant to an order of a federal, state, or local court.

(v) (e) For use in research activities, and for use in producing statistical reports, so long as the personal information is not published, redisclosed, or used to contact the individuals.

(vi) (f) For use by any insurer or insurance support organization, or by a self-insured entity, or its agents, employees, or contractors in connection with claims investigation activities, anti-fraud activities, rating or underwriting.

(vii) (g) For use in providing notice to the owners of towed or impounded vehicles.

(viii) (h) For use by any licensed private investigative agency or licensed security service for any purpose permitted under this subsection.

(ix) (i) For use by an employer or its agent or insurer to obtain or verify information relating to a holder of a commercial driver's license that is required under the Commercial Motor Vehicle Safety Act of 1986 (49 U.S.C. App. 2710 et seq. [ (see now 49 U.S.C. § 31301 et seq.).]).

(x) (j) For use in connection with the operation of private toll transportation facilities.

(xi) (k) For any other use in response to a request for individual motor vehicle records, unless such that use is prohibited by the individual.

(xii) (l) For bulk distribution for surveys, marketing or solicitations, provided that the information will be used, rented or sold solely for bulk distribution for surveys, marketing, and solicitations and that surveys, marketing, and solicitations will not be directed at those individuals who have requested in a timely fashion that they not be directed at them.

(3) Notice. The department of motor vehicles shall provide in a clear and conspicuous manner on forms for issuance or renewal of operators permits, titles, registrations or identification cards, notice that personal information collected by the department may be disclosed to any business or person and provide in a clear and conspicuous manner on the forms an opportunity to prohibit such the disclosures; provided, further, however, that social security numbers and medical or disability information shall not be subject to disclosure under this chapter.

 

SECTION 90. Sections 27-50-3, 27-50-4, and 27-50-7 of the General Laws in Chapter 27-50 entitled "Small Employer Health Insurance Availability Act" are hereby amended to read as follows:

 

27-50-3. Definitions. -- (a) "Actuarial certification" means a written statement signed by a member of the American academy of actuaries or other individual acceptable to the director that a small employer carrier is in compliance with the provisions of § 27-50-5, based upon the person's examination and including a review of the appropriate records and the actuarial assumptions and methods used by the small employer carrier in establishing premium rates for applicable health benefit plans.

(b) "Adjusted community rating" means a method used to develop a carrier's premium which spreads financial risk across the carrier's entire small group population in accordance with the requirements in § 27-50-5.

(c) "Affiliate" or "affiliated" means any entity or person who directly or indirectly through one or more intermediaries controls or is controlled by, or is under common control with, a specified entity or person.

(d) "Affiliation period" means a period of time that must expire before health insurance coverage provided by a carrier becomes effective, and during which the carrier is not required to provide benefits.

(e) "Basic health benefit plan" means the health benefit plan developed pursuant to the provisions of § 27-50-10.

(f) "Bona fide association" means, with respect to health benefit plans offered in this state, an association which:

(1) Has been actively in existence for at least five (5) years;

(2) Has been formed and maintained in good faith for purposes other than obtaining insurance;

(3) Does not condition membership in the association on any health-status related factor relating to an individual (including an employee of an employer or a dependent of an employee);

(4) Makes health insurance coverage offered through the association available to all members regardless of any health status-related factor relating to those members (or individuals eligible for coverage through a member);

(5) Does not make health insurance coverage offered through the association available other than in connection with a member of the association;

(6) Is composed of persons having a common interest or calling;

(7) Has a constitution and bylaws; and

(8) Meets any additional requirements that the director may prescribe by regulation.

(g) "Carrier" or "small employer carrier" means all entities licensed, or required to be licensed, in this state that offer health benefit plans covering eligible employees of one or more small employers pursuant to this chapter. For the purposes of this chapter, carrier includes an insurance company, a nonprofit hospital or medical service corporation, a fraternal benefit society, a health maintenance organization as defined in chapter 41 of this title or as defined in chapter 62 of title 42, or any other entity providing a plan of health insurance or health benefits subject to state insurance regulation.

(h) "Church plan" has the meaning given this term under section 3(33) of the Employee Retirement Income Security Act of 1974 [29 U.S.C. § 1002(33)].

(i) "Control" shall be defined in the same manner as in chapter 35 of this title.

(j) (1) "Creditable coverage" means, with respect to an individual, health benefits or coverage provided under any of the following:

(i) A group health plan;

(ii) A health benefit plan;

(iii) Part A or part B of Title XVIII of the Social Security Act, [42 U.S.C. § 1395c et seq. or 42 U.S.C. § 1395j et seq.] (Medicare);

(iv) Title XIX of the Social Security Act, [42 U.S.C. § 1396 et seq.] (Medicaid), other than coverage consisting solely of benefits under section 1928 [42 U.S.C. § 1396s] (the program for distribution of pediatric vaccines);

(v) Chapter 55 of title 10, United States Code [10 U.S.C. § 1071 et seq.] (medical and dental care for members and certain former members of the uniformed services, and for their dependents) (Civilian Health and Medical Program of the Uniformed Services) (CHAMPUS). For purposes of title 10, chapter 55 10 U.S.C. § 1071 et seq., "unifor