Chapter 376
2016 -- S 2011
Enacted 07/09/2016

A N   A C T
RELATING TO BUSINESSES AND PROFESSIONS -- BUSINESS REGULATION

Introduced By: Senator Roger Picard
Date Introduced: January 13, 2016

It is enacted by the General Assembly as follows:
     SECTION 1. Section 5-3.1-12 of the General Laws in Chapter 5-3.1 entitled "Public
Accountancy" is hereby amended to read as follows:
     5-3.1-12. Revocation or suspension of certificate, authority or permit. -- (a) After
notice and a hearing as provided in § 5-3.1-14, the board may:
     (1) sSuspend, for a period not to exceed two (2) years, or revoke any certificate issued
under § 5-3.1-5, or any predecessor provision, and any authority as a public accountant issued
under the prior laws of this state;
     (2) rRevoke or suspend any permit issued under §§ 5-3.1-7, 5-3.1-8, 5-3.1-9, or their
predecessor provisions; and
     (3) rReprimand or censure in writing,; limit the scope of practice,; impose an
administrative fine upon, not to exceed one thousand dollars ($1,000),; or place on probation, all
with or without terms, conditions, or limitations, a licensee, for any of the causes specified in
subsection (b) of this section.
      (b) The board may take action specified in subsection (a) of this section for any one or
more of the following causes:
      (1) Fraud or deceit in obtaining a certificate or permit under this chapter;
      (2) Dishonesty, fraud, or gross negligence in the practice of public accounting or in the
filing, or failing to file, the licensee's own income tax returns;
      (3) Violation of any of the provisions of this chapter;
      (4) Violation of any rules and regulations, including, but not limited to, any rules of
professional conduct, promulgated by the board under the authority granted by this chapter;
      (5) Conviction of, or pleading guilty or nolo contendere to, a crime or an act constituting
a crime of forgery, embezzlement, obtaining money under false pretenses, bribery, larceny,
extortion, conspiracy to defraud, misappropriation of funds, tax evasion, or any other similar
offense or offenses involving moral turpitude, in a court of competent jurisdiction of this or any
other state or in federal court;
      (6) Cancellation, revocation, or suspension of, or refusal to renew, the licensee's
certificate or permit from another state by the other state for any cause other than failure to pay a
fee or to meet the requirements of continuing education in that other state;
      (7) Suspension or revocation of the right to practice public accounting before any state or
federal agency;
      (8) As to accountants licensed by foreign countries, cancellation, revocation, suspension,
or refusal to renew the person's certificate, license, or degree evidencing his or her qualification to
practice public accounting by the foreign country issuing the certificate, license, or degree, the
certificate, license, or degree having qualified the accountant for issuance of an annual limited
permit to practice under § 5-3.1-8;
      (9) Failure to furnish the board, or any persons acting on behalf of the board, any
information that is legally requested by the board;
      (10) Any conduct reflecting adversely upon the licensee's fitness to engage in the
practice of public accountancy; and
      (11) Any other conduct discreditable to the public accounting profession.
     SECTION 2. Chapter 27-4 of the General Laws entitled "Life Insurance Policies and
Reserves" is hereby amended by adding thereto the following section:
     27-4-30. Unintentional policy lapse. -- (a) Each insurer that delivers, or issues for
delivery, an individual life insurance policy in this state on or after January 1, 2017, shall notify
an applicant, in writing at the time of application for such policy, of such applicant's right to
designate a third party to receive notice of cancellation of the policy based on nonpayment of
premium. The applicant may make such designation at the time of application for such policy, or
at any time such policy is in force, by submitting a written notice to the insurer containing the
name and address of the third-party designee.
     (b) The insurer's transmission to the third-party designee of a copy of a notice of
cancellation based on nonpayment of premium shall be in addition to the transmission of the
original notice to the policyholder. The copy of the notice of cancellation transmitted to the third
party shall be governed by the same law and policy provisions that govern the notice being
transmitted to the policyholder.
     (c) The designation of a third party shall not constitute acceptance of any liability on the
part of the third party or insurer for services provided to the policyholder.
     SECTION 3. Section 27-4.8-6 of the General Laws in Chapter 27-4.8 entitled "Group
Life Insurance" is hereby amended to read as follows:
     27-4.8-6. Supplementary bill relating to conversion privileges. -- If an individual
insured under a group life-insurance policy hereafter delivered in this state becomes entitled
under the terms of the policy to have an individual policy of life insurance issued without
evidence of insurability, subject to making of application and payment of the first premium
within the period specified in the policy, and if the individual is not given notice of the existence
of the right at least fifteen (15) days prior to the expiration date of the period, then in that event,
the individual shall have an additional period within which to exercise the right, but nothing
herein contained shall be construed to continue any insurance beyond the period provided in the
policy. This additional period shall expire fifteen (15) days next after the individual is given
notice, but in no event shall the additional period extend beyond sixty (60) days after the
expiration date of the period provided in the policy. The notice shall clearly set forth the required
conversion process. The notice may include the conversion provisions of the policy and
certificate, but the notice may not just make reference to these provisions. The notice does not
require prior approval, but the insurer is responsible to assure that the notice is clear and provides
all the necessary information. If the insurer allows the conversion notice to be delivered by the
employer, the insurer shall ensure that no other employer notice is included with the conversion
notice. Written notice presented to the individual or mailed by the policy holder to the last-known
address of the individual or mailed by the insurer to the last-known address of the individual as
furnished by the policyholder shall constitute notice for the purpose of this paragraph.
     SECTION 4. Chapter 27-9 of the General Laws entitled "Casualty Insurance Rating" is
hereby amended by adding thereto the following section:
     27-9-7.4. Automobile insurance; Persons on active duty in United States armed
forces. -- An insurer shall not refuse to insure, or continue to insure, limit coverage available to,
charge a reinstatement fee for, or increase the premiums for automobile insurance solely because
a person failed to maintain insurance for a vehicle owned by the person during the six-month (6)
period immediately preceding application if the person certifies, on a form provided by the
insurer, that the lapse in coverage was because the person was on active duty in the armed forces
of the United States for at least thirty (30) consecutive days and that the vehicle was not driven or
moved during the six-month (6) period immediately preceding the application for insurance, or
during the period of time the insurance was not maintained, whichever period is shorter.
     SECTION 5. Section 27-29-13.2 of the General Laws in Chapter 27-29 entitled "Unfair
Competition and Practices" is hereby amended to read as follows:
     27-29-13.2. Cancellation provisions for return of unearned premium. -- Every
insurance policy issued and approved for use in Rhode Island shall provide clear language on the
method of calculation of the unearned premium portion, if any, to be returned to the insured if the
policy is cancelled. Insurance policies shall not state "refer to manuals" to determine the amount
of unearned premium to be returned. For all cancellations, the actual percentage retained by the
insurer shall be discernible in the policy cancellation provisions. If a policy is canceled using a
short-rate table, the insurer shall provide the short-rate table within the cancellation provisions of
the insurance policy so that an insured can make an informed decision when cancelling a policy
midterm. If a policy premium is fully earned or minimum earned on issuance of the policy, the
quote and policy provisions shall clearly state that fact. Insurers shall not impose cancellation fees
when insurance policies are cancelled using short-rate tables.
     SECTION 6. Sections 2, 3 and 5 shall take effect on January 1, 2017. Sections 1 and 4
shall take effect on July 1, 2016.
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LC003553
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