Title 42
State Affairs and Government

Chapter 128.1
Lead Hazard Mitigation

§ 42-128.1-9. Insurance coverage.

(a) The department of business regulation shall, by January 1, 2003, establish a uniform policy with regard to exclusion for lead poisoning and shall adopt any rules and requirements that may be necessary to assure the availability of insurance coverage for losses and damages caused by lead poisoning, in accordance with the provisions of this chapter, which policy and rules shall apply to liability coverage available to property owners. The department of business regulation shall have the authority and is empowered, consistent with the requirements of chapter 35 of this title, to promulgate rules and regulations, which shall enable it to compile and analyze data and to make determinations with regard to the availability of and rates for lead liability coverage.

(b) Except as otherwise provided by this chapter, no insurance company licensed or permitted by the department of business regulation to provide liability coverage to rental property owners shall exclude, after October 31, 2005, coverage for losses or damages caused by lead poisoning. The department of business regulation shall not permit, authorize or approve any exclusion for lead poisoning, except as specifically provided for by this chapter, that was not in effect as of January 1, 2000, and all previously approved exclusions shall terminate October 31, 2005. As of November 1, 2005, coverage for lead poisoning shall be included in the policy or offered by endorsement, as set forth in this section.

(c) All insurers issuing commercial lines insurance policies and personal lines insurance policies covering pre-1978 rental housing in compliance with: (i) the requirements of this chapter for lead hazard mitigation; (ii) with the requirements of chapter 24.6 of title 23 for lead safe housing, within the state of Rhode Island; or (iii) relying on a valid certificate of compliance or conformance shall, effective November 1, 2005, include in the policy coverage for liability for injury, damage, or death resulting from occurrences of lead poisoning in an amount equal to and no less than the underlying policy limits for personal injury/bodily injury coverage provided under the policy so issued to a residential rental property owner. The property owner shall, if requested by the insurer, present to the insurance company, either: (1) proof of certificate of compliance of an independent clearance inspection and of any affidavit of visual inspection required to maintain the validity of the independent clearance inspection; (2) proof of meeting the mitigation standard in the form of a clearance exam showing that lead hazards are mitigated; or (3) proof of abatement. This proof shall be prima facie evidence of compliance with the requirements of this chapter. In any subsequent renewal, the insurer may require any continuing proof whenever the certificate is expiring, has expired, or is otherwise invalidated.

(d) For residential rental properties that have not been brought into compliance with the requirements for lead hazard mitigation pursuant to this chapter or for lead hazard reduction pursuant to chapter 24.6 of title 23 or which do not have a valid certificate of compliance or conformance, effective November 1, 2005, for residential rental property owners who own or owned a substantial legal or equitable interest in one property and have had no more than one un-remediated dwelling unit at which a child was poisoned prior to November 1, 2005, and for residential property owners who own or owned more than one property and have had no more than two (2) un-remediated dwelling units at which a child was poisoned prior to November 1, 2005, an insurance company, which provides liability insurance to a residential rental property owner, shall either offer lead liability coverage for bodily injury, which shall be equal to the underlying limits of liability coverage for the property, by endorsement, or shall assist the insured in placing lead liability coverage through the program commonly known as the Rhode Island FAIR Plan either directly or through one of the insurance company’s agents or brokers, and the Rhode Island FAIR Plan shall make available liability coverage for damages caused by lead poisoning to the class of property owners described in this subsection. If the insured seeks lead liability coverage with the FAIR Plan, the FAIR Plan may use reasonable underwriting guidelines, as approved by the department of business regulation, to underwrite the property. Any property owner, who fails to remediate a property, after a notice of violation subsequent to October 31, 2005, and any property which is not remediated after notice of a violation subsequent to October 31, 2005, shall not be eligible to receive an offer of coverage and shall be subject to cancellation and non-renewal of that coverage if the property is not found to be in compliance with the lead law within ninety (90) days of the date of issuance of the notice by the director, or the housing resources commission, as applicable.

(e) Rates for lead poisoning liability coverage, as specified in subsections (c) and (d) of this section, shall be approved by the department of business regulation, notwithstanding any limits on rate approval authority established by the provisions of chapter 65 of title 27 and subject to the provisions of §§ 27-44-6 and 27-44-7, using the following standards:

(1) That they are not excessive, inadequate, or unfairly discriminatory;

(2) That consideration is given to:

(i) Past and prospective loss experience within the state of Rhode Island;

(ii) A reasonable margin for profits and contingencies;

(iii) Past and prospective expenses specifically applicable to the state of Rhode Island:

(iv) Any other data, including data compiled in other states, especially regarding experience data for lead liability coverage, that the department may deem necessary; and

(v) Past history of the owner with regard to lead poisoning or any associated violations.

(f) The department of business regulation shall have the authority and is empowered, consistent with the requirements of chapter 35 of this title, to promulgate rules and regulations to enable it to compile and analyze data and to make determinations with regard to the availability of and rates for lead liability coverage. In order to effect the purposes of this section insurers shall file, on or before October 1, 2004, the proposed language of endorsements for lead liability coverage and the proposed rates for that coverage with the department.

(g) All endorsements, rates, forms and rules for lead liability coverage approved by the department of business regulation to be effective on or after July 1, 2004 are hereby extended to be effective November 1, 2005. Prior to November 1, 2005, insurers and advisory organizations shall continue to utilize all endorsements, rates, forms and rules in effect on June 30, 2004 for lead liability coverage. The department shall not approve any new endorsements, rates, forms or rules for lead liability coverage in pre-1978 residential rental properties unless the filings are submitted in accordance with the provisions of this act. The department is hereby authorized to promulgate reasonable rules and regulations to carry out the provisions of this section.