It is enacted by the General Assembly as follows

SECTION 1. Section 27-54-11 of the General Laws in Chapter 27-54 entitled "Insurance Fraud Prevention Act" is hereby amended to read as follows:

27-54-11. Disclosure of arson conviction. -- (a) Every insurance provider doing business within this state shall require applicants for property insurance, real or personal, to disclose whether or not the applicant or applicants have been convicted of any degree of the crime of arson as described in chapter 11-4 of the general laws within ten (10) years of the application date.

(b) An insurance provider may use the existence of an arson conviction within ten (10) years as a reason to deny coverage.

(c) Failure to disclose the existence of an arson conviction when requested upon an insurance application shall be a misdemeanor punishable by a sentence of not more than one (1) year imprisonment.

(d) The insurance application form shall indicate the existence of a criminal penalty for failure to disclose a conviction for arson.

(e) For the purpose of this section, the term "applicant" shall mean a natural person, trust, partnership, association, corporation or other form of business organization; provided, however, that if the applicant is a trust, the beneficiaries thereof shall be included, and if the applicant is a partnership, association, corporation or other form of business organization, each member, director, shareholder owning more than twenty percent (20%) of the common stock issued by the corporation, and principal officer thereof shall be included.

{ADD (f) The provisions of this section shall not apply to any policy with respect to highly protected risks as defined in Section 27-5-2.1(a)(4) of the general laws.ADD}

SECTION 2. This act shall take effect upon passage.