Rhode Island 2023 Regular Session

Rhode Island House Bill H6371 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2
3	3
4	4
5	5	2023 -- H 6371
6	6	========
7	7	LC002603
8	8	========
9	9	S T A T E O F R H O D E I S L A N D
10	10	IN GENERAL ASSEMBLY
11	11	JANUARY SESSION, A.D. 2023
12	12	____________
13	13
14	14	A N A C T
15	15	RELATING TO STATUTES AND STATUTORY CONSTRUCTION
16	16	Introduced By: Representatives Blazejewski, and Chippendale
17	17	Date Introduced: May 05, 2023
18	18	Referred To: House Judiciary
19	19
20	20
21	21	It is enacted by the General Assembly as follows:
22	22	ARTICLE 1 -- STATUTORY REENACTMENT 1
23	23	SECTION 1. It is the express intention of the General Assembly to reenact the entirety of 2
24	24	Title 7 and chapters 19 through the end of title 27 of the General Laws of R.I., including all 3
25	25	chapters and sections therein and any chapters and sections thereof not included in this act may be, 4
26	26	and are hereby, reenacted as if fully set forth herein. 5
27	27	SECTION 2. Sections 7-12.1-110, 7-12.1-903.1, 7-12.1-904, 7-12.1-912, 7-12.1-913, 7-6
28	28	12.1-1006, 7-12.1-1009, 7-12.1-1011, 7-12.1-1012, 7-12.1-1101 and 7-12.1-1125 of the General 7
29	29	Laws in Chapter 7-12.1 entitled "Uniform Partnership Act [Effective January 1, 2023.]" are hereby 8
30	30	amended to read as follows: 9
31	31	7-12.1-110. Application to existing relationships. [Effective January 1, 2023.] 10
32	32	(a) This chapter governs only: 11
33	33	(1) A partnership formed on or after January 1, 2023; and 12
34	34	(2) Except as otherwise provided in subsection (c) of this section, a partnership formed 13
35	35	before January 1, 2023, which elects, in the manner provided in its partnership agreement or by law 14
36	36	for amending the partnership agreement, to be subject to this chapter. 15
37	37	(b) Except as otherwise provided in subsection (c) of this section, on and after January 1, 16
38	38	2023 2024, this chapter governs all partnerships. 17
39	39	(c) With respect to a partnership that elects pursuant to subsection (a)(2) of this section to 18
40	40	be subject to this chapter, after the election takes effect the provisions of this chapter relating to the 19
41	41
42	42
43	43	LC002603 - Page 2 of 137
44	44	liability of the partnership’s partners to third parties apply to: 1
45	45	(1) A third party that had not done business with the partnership in the year before the 2
46	46	election took effect; and 3
47	47	(2) A third party that had done business with the partnership in the year before the election 4
48	48	took effect only if the third party knows or has been notified of the election. 5
49	49	7-12.1-903.1. Issuance of certificates of revocation. [Effective January 1, 2023.] 6
50	50	(a) Upon revoking any such certificate of a limited liability partnership, the secretary of 7
51	51	state shall: 8
52	52	(1) Issue a certificate of revocation in duplicate; 9
53	53	(2) File one of the certificates in the secretary of state’s office; 10
54	54	(3) Send to the limited liability partnership by regular mail a certificate of revocation, 11
55	55	addressed to the registered agent of the limited liability partnership in this state on file with the 12
56	56	secretary of state’s office; provided, however, that if a prior mailing addressed to the address of the 13
57	57	registered agent of the limited liability partnership in this state currently on file with the secretary 14
58	58	of state’s office has been returned to the secretary of state as undeliverable by the United States 15
59	59	Postal Service for any reason, or if the revocation certificate is returned as undeliverable to the 16
60	60	secretary of state’s office by the United States Postal Service for any reason, the secretary of state 17
61	61	shall give notice as follows: 18
62	62	(i) To the limited liability partnership at its principal office of record as shown in its most 19
63	63	recent annual report, and no further notice shall be required; or 20
64	64	(ii) In the case of a limited liability partnership that has not yet filed an annual report, then 21
65	65	to the domestic limited liability company limited liability partnership at the principal office in 22
66	66	the articles of organization statement of qualification of limited liability partnership or to the 23
67	67	authorized person listed on the articles of organization, and no further notice shall be required. 24
68	68	(b) An administrative revocation under this section affects only the partnership’s status as 25
69	69	a limited liability partnership and is not an event causing dissolution of the partnership. 26
70	70	(c) The revocation of a limited liability partnership does not terminate the authority of its 27
71	71	registered agent. 28
72	72	7-12.1-904. Reinstatement. [Effective January 1, 2023.] 29
73	73	(a) A partnership whose statement of qualification has been revoked administratively under 30
74	74	§ 7-12.1-903 may apply to the secretary of state for reinstatement of the statement of qualification 31
75	75	not later than two (2) years after the effective date of the revocation. The application must be 32
76	76	accompanied by a certificate of good standing from the Rhode Island division of taxation and state: 33
77	77	(1) The name of the partnership at the time of the administrative revocation of its statement 34
78	78
79	79
80	80	LC002603 - Page 3 of 137
81	81	of qualification and, if needed, a different name that satisfies § 7-12.1-902; 1
82	82	(2) The address of the principal office of the partnership and the name and street and 2
83	83	mailing addresses of its registered agent; 3
84	84	(3) The effective date of administrative revocation of the partnership’s statement of 4
85	85	qualification; 5
86	86	(4) On the payment by the limited liability partnership of a penalty in the amount of fifty 6
87	87	dollars ($50.00) for each year or part of year that has elapsed since the issuance of the certificate 7
88	88	of revocation; and 8
89	89	(5) That the grounds for revocation did not exist or have been cured. 9
90	90	(b) To have its statement of qualification reinstated, a partnership must pay all fees, taxes, 10
91	91	interest, and penalties that were due to the secretary of state or tax administrator at the time of the 11
92	92	administrative revocation and all fees, taxes, interest, and penalties that would have been due to the 12
93	93	secretary of state or tax administrator while the partnership’s statement of qualification was revoked 13
94	94	administratively. 14
95	95	(c) If the secretary of state determines that an application under subsection (a) of this 15
96	96	section contains the required information, is satisfied that the information is correct, and determines 16
97	97	that all payments required to be made to the secretary of state or tax administrator by subsection 17
98	98	(b) of this section have been made, the secretary of state shall: 18
99	99	(1) Cancel the statement of revocation and prepare a statement of reinstatement that states 19
100	100	the secretary of state’s determination and the effective date of reinstatement; and 20
101	101	(2) File the statement of reinstatement and serve a copy on the partnership. 21
102	102	(d) When reinstatement under this section has become effective, the following rules apply: 22
103	103	(1) The reinstatement relates back to and takes effect as of the effective date of the 23
104	104	administrative revocation. 24
105	105	(2) The partnership’s status as a limited liability partnership continues as if the revocation 25
106	106	had not occurred. 26
107	107	(3) The rights of a person arising out of an act or omission in reliance on the revocation 27
108	108	before the person knew or had notice of the reinstatement are not affected. 28
109	109	7-12.1-912. Service of process, notice, or demand. [Effective January 1, 2023.] 29
110	110	(a) A limited liability partnership or registered foreign limited liability partnership may be 30
111	111	served with any process, notice, or demand required or permitted by law by serving its registered 31
112	112	agent. 32
113	113	(b) If a limited liability partnership or registered foreign limited liability partnership fails 33
114	114	to appoint or maintain a registered agent in this state, or whenever its registered agent cannot with 34
115	115
116	116
117	117	LC002603 - Page 4 of 137
118	118	reasonable diligence be found at the registered office, then the secretary of state is an agent of the 1
119	119	corporation limited liability partnership upon whom any process, notice, or demand may be 2
120	120	served. Service on the secretary of state of any process, notice, or demand is made by delivering to 3
121	121	and leaving with him or her the secretary of state or with any clerk having charge of the 4
122	122	corporation department of his or her office, duplicate copies of the process, notice, or demand. In 5
123	123	the event any process, notice, or demand is served on the secretary of state, the secretary of state 6
124	124	shall immediately forward one of the copies by certified mail, addressed to the corporation limited 7
125	125	liability partnership at its registered office. Any service upon the secretary of state is returnable 8
126	126	in not less than thirty (30) days. 9
127	127	(c) The secretary of state shall maintain a record of any such service setting forth the name 10
128	128	of the plaintiff and defendant, the title, docket number and nature of the proceeding in which 11
129	129	process has been served upon the secretary of state, the fact that service has been effected pursuant 12
130	130	to this subsection, the return date thereof, and the day and hour when the service was made. The 13
131	131	secretary of state shall not be required to retain such information for a period longer than five (5) 14
132	132	years from receipt of the service of process. 15
133	133	(d) Service of process, notice, or demand on a registered agent must be in a written record. 16
134	134	(e) Service of process, notice, or demand may be made by other means under law other 17
135	135	than this chapter. 18
136	136	7-12.1-913. Annual report for secretary of state. [Effective January 1, 2023.] 19
137	137	(a) A limited liability partnership or registered foreign limited liability partnership shall 20
138	138	deliver to the secretary of state for filing an annual report that states: 21
139	139	(1) The name of the partnership or registered foreign partnership; 22
140	140	(2) The street and mailing addresses of its principal office; 23
141	141	(3) The name of at least one partner; 24
142	142	(4) In the case of a foreign partnership, its jurisdiction of formation and any alternate name 25
143	143	adopted under § 7-12.1-1006; 26
144	144	(5) A brief statement of the character of the business in which the limited liability 27
145	145	partnership is actually engaged in this state; and 28
146	146	(6) Any additional information that is required by the secretary of state. 29
147	147	(b) The annual report must be made on forms prescribed and furnished by the secretary of 30
148	148	state, and the information in the annual report must be current as of the date the report is signed by 31
149	149	the limited liability partnership or registered foreign limited liability partnership. 32
150	150	(c) The first annual report must be filed with the secretary of state after February 1, and 33
151	151	before May 1, of the year following the calendar year in which the limited liability partnership’s 34
152	152
153	153
154	154	LC002603 - Page 5 of 137
155	155	statement of qualification became effective or the registered foreign limited liability partnership 1
156	156	registered to do business in this state. Subsequent annual reports must be filed with the secretary of 2
157	157	state after February 1, and before May 1, of each calendar year thereafter. Proof to the satisfaction 3
158	158	of the secretary of state that prior to May 1 the report was deposited in the United States mail in a 4
159	159	sealed envelope, properly addressed, with postage prepaid, is deemed to be a compliance with this 5
160	160	requirement. 6
161	161	(d) If the secretary of state finds that the annual report conforms to the requirements of this 7
162	162	chapter, the secretary of state shall file the report. If an annual report does not contain the 8
163	163	information required by this section, the secretary of state promptly shall notify the reporting 9
164	164	limited liability partnership or registered foreign limited liability partnership in a record and return 10
165	165	the report for correction, in which event the penalties subsequently prescribed for failure to file the 11
166	166	report within the time previously provided do not apply if the report is corrected to conform to the 12
167	167	requirements of this chapter and returned to the secretary of state within thirty (30) days from the 13
168	168	date on which it was mailed to the corporation limited liability partnership by the secretary of 14
169	169	state. 15
170	170	(e) Each limited liability partnership, domestic or foreign, that fails or refuses to file its 16
171	171	annual report for any year within thirty (30) days after the time prescribed by this chapter is subject 17
172	172	to a penalty of twenty-five dollars ($25.00) per year. 18
173	173	7-12.1-1006. Noncomplying name of foreign limited liability partnership. [Effective 19
174	174	January 1, 2023.] 20
175	175	(a) A foreign limited liability partnership whose name does not comply with § 7-12.1-902 21
176	176	may not register to do business in this state until it adopts, for the purpose of doing business in this 22
177	177	state, an alternate name that complies with § 7-12.1-902. A partnership that registers under an 23
178	178	alternate name under this subsection need not comply with § 7-16-902 or 7-1.2-402. A 24
179	179	partnership that registers under an alternate name under this subsection need not comply with this 25
180	180	state’s fictitious name statute. After registering to do business in the state with an alternate name, 26
181	181	a partnership shall do business in this state under: 27
182	182	(1) The alternate name; 28
183	183	(2) The partnership’s name, with the addition of its jurisdiction of formation; or 29
184	184	(3) A name the partnership is authorized to use under the state’s fictitious name statute to 30
185	185	include, but not be limited to, § 7-16-902.1 or 7-1.2-402. 31
186	186	(b) If a registered foreign limited liability partnership changes its name to one that does not 32
187	187	comply with § 7-12.1-902, it may not do business in this state until it complies with subsection (a) 33
188	188	of this section by amending its registration to adopt an alternate name that complies with § 7-12.1-34
189	189
190	190
191	191	LC002603 - Page 6 of 137
192	192	902. 1
193	193	7-12.1-1009. Transfer of registration. [Effective January 1, 2023.] 2
194	194	(a) When a registered foreign limited liability partnership has merged into a foreign entity 3
195	195	that is not registered to do business in this state or has converted to a foreign entity required to 4
196	196	register with the secretary of state to do business in this state, the foreign entity shall deliver to the 5
197	197	secretary of state for filing an application for transfer of registration. The application must state: 6
198	198	(1) The name of the registered foreign limited liability partnership before the merger or 7
199	199	conversion; 8
200	200	(2) That before the merger or conversion the registration pertained to a foreign limited 9
201	201	liability partnership; 10
202	202	(3) The name of the applicant foreign entity into which the foreign limited liability 11
203	203	partnership has merged or to which it has been converted and, if the name does not comply with § 12
204	204	7-12.1-902, an alternate name adopted pursuant to § 7-12.1-1006(a); and 13
205	205	(4) The type of entity of the applicant foreign entity and its jurisdiction of formation; 14
206	206	(b) An application for authority to transact business in the state of Rhode Island for the 15
207	207	resulting entity type and a certificate of legal existence or good standing issued by the proper officer 16
208	208	of the state or country under the laws of which the resulting entity has been formed must 17
209	209	accompany the application for transfer of registration. 18
210	210	(c) When an application for transfer of registration takes effect, the registration of the 19
211	211	foreign limited liability limited partnership to do business in this state is transferred without 20
212	212	interruption to the foreign entity into which the partnership has merged or to which it has been 21
213	213	converted. 22
214	214	7-12.1-1011. Issuance of certificates of revocation. [Effective January 1, 2023.] 23
215	215	(a) Upon revoking any such certificate of registration of limited liability partnership, the 24
216	216	secretary of state shall: 25
217	217	(1) Issue a certificate of revocation in duplicate; 26
218	218	(2) File one of the certificates in the secretary of state’s office; 27
219	219	(3) Send to the limited liability partnership by regular mail a certificate of revocation, 28
220	220	addressed to the registered agent of the limited liability partnership in this state on file with the 29
221	221	secretary of state’s office; provided, however, that if a prior mailing addressed to the address of the 30
222	222	registered agent of the limited liability partnership in this state currently on file with the secretary 31
223	223	of state’s office has been returned to the secretary of state as undeliverable by the United States 32
224	224	Postal Service for any reason, or if the revocation certificate is returned as undeliverable to the 33
225	225	secretary of state’s office by the United States Postal Service for any reason, the secretary of state 34
226	226
227	227
228	228	LC002603 - Page 7 of 137
229	229	shall give notice as follows: 1
230	230	(i) To the limited liability partnership at its principal office of record as shown in its most 2
231	231	recent annual report, and no further notice shall be required; or 3
232	232	(ii) In the case of a limited liability partnership that has not yet filed an annual report, then 4
233	233	to the principal office listed in the certificate of registration, and no further notice shall be required. 5
234	234	(b) The authority of the registered foreign limited liability partnership to do business in this 6
235	235	state ceases on the effective date of the certificate of revocation, or to apply for reinstatement 7
236	236	under § 7-12.1-1012 unless before that date the partnership cures each ground for revocation 8
237	237	stated in the notice. 9
238	238	(c) The revocation of a limited liability partnership does not terminate the authority of its 10
239	239	registered agent. 11
240	240	7-12.1-1012. Reinstatement. [Effective January 1, 2023.] 12
241	241	(a) Within two (2) years after issuing a certificate of revocation as provided in § 7-12.1-13
242	242	1011, the secretary of state may withdraw the certificate of revocation and retroactively reinstate 14
243	243	the limited liability partnership in good standing as if its certificate of registration of limited liability 15
244	244	partnership had not been revoked except as subsequently provided: 16
245	245	(1) On the filing by the limited liability partnership of the documents it had previously 17
246	246	failed to file and payment of any fees it had previously failed to pay as set forth in §§ 7-12.1-18
247	247	1006(a)(3) through 7-12.1-1006(a)(7) 7-12.1-1010(a)(3) through (a)(7). 19
248	248	(2) On the payment by the limited liability partnership of a penalty in the amount of fifty 20
249	249	dollars ($50.00) for each year or part of year that has elapsed since the issuance of the certificate 21
250	250	of revocation. 22
251	251	(b) If, as permitted by the provisions of this chapter or chapter 1.2, 6, 12, or 13.1 of this 23
252	252	title, another limited liability company, business or nonprofit corporation, registered limited 24
253	253	liability partnership or a limited liability partnership, or in each case domestic or foreign, authorized 25
254	254	and qualified to transact business in this state, bears or has filed a fictitious business name statement 26
255	255	as to or reserved or registered a name that is the same as, the name of the limited liability partnership 27
256	256	with respect to which the certificate of revocation is proposed to be withdrawn, then the secretary 28
257	257	of state shall condition the withdrawal of the certificate of revocation on the reinstated limited 29
258	258	liability partnership amending its certificate of registration so as to designate a name that meets the 30
259	259	requirements of § 7-12.1-902 by adopting an alternate name pursuant to § 7-12.1-1006(a). 31
260	260	(c) When reinstatement under this section has become effective, the following rules apply: 32
261	261	(1) The reinstatement relates back to and takes effect as of the effective date of the 33
262	262	certificate of revocation. 34
263	263
264	264
265	265	LC002603 - Page 8 of 137
266	266	(2) The limited liability partnership resumes carrying on its activities and affairs as if the 1
267	267	revocation had not occurred. 2
268	268	(3) The rights of a person arising out of an act or omission in reliance on the revocation 3
269	269	before the person knew or had notice of the reinstatement are not affected. 4
270	270	7-12.1-1101. Definitions. [Effective January 1, 2023.] 5
271	271	As used in this chapter: 6
272	272	(1) “Acquired entity” means the entity, all of one or more classes or series of interests of 7
273	273	which are acquired in an interest exchange. 8
274	274	(2) “Acquiring entity” means the entity that acquires all of one or more classes or series of 9
275	275	interests of the acquired entity in an interest exchange. 10
276	276	(3) "Articles of merger" means a statement under § 7-12.1-1125. 11
277	277	(3)(4) “Conversion” means a transaction authorized by §§ 7-12.1-1141 through 7-12.1-12
278	278	1146. 13
279	279	(4)(5) “Converted entity” means the converting entity as it continues in existence after a 14
280	280	conversion. 15
281	281	(5)(6) “Converting entity” means the domestic entity that approves a plan of conversion 16
282	282	pursuant to § 7-12.1-1143 or the foreign entity that approves a conversion pursuant to the law of 17
283	283	its jurisdiction of formation. 18
284	284	(6)(7) “Distributional interest” means the right under an unincorporated entity’s organic 19
285	285	law and organic rules to receive distributions from the entity. 20
286	286	(7)(8) “Domestic”, with respect to an entity, means governed as to its internal affairs by 21
287	287	the law of this state. 22
288	288	(8)(9) “Domesticated limited liability partnership” means a domesticating limited liability 23
289	289	partnership as it continues in existence after a domestication. 24
290	290	(9)(10) “Domesticating limited liability partnership” means the domestic limited liability 25
291	291	partnership that approves a plan of domestication pursuant to § 7-12.1-1153 or the foreign limited 26
292	292	liability partnership that approves a domestication pursuant to the law of its jurisdiction of 27
293	293	formation. 28
294	294	(10)(11) “Domestication” means a transaction authorized by §§ 7-12.1-1151 through 7-29
295	295	12.1-1156. 30
296	296	(11)(12) “Entity”: 31
297	297	(i) Means: 32
298	298	(A) A business corporation; 33
299	299	(B) A nonprofit corporation; 34
300	300
301	301
302	302	LC002603 - Page 9 of 137
303	303	(C) A general partnership, including a limited liability partnership; 1
304	304	(D) A limited partnership, including a limited liability limited partnership; 2
305	305	(E) A limited liability company; 3
306	306	(F) A general cooperative association; 4
307	307	(G) A limited cooperative association; 5
308	308	(H) An unincorporated nonprofit association; 6
309	309	(I) A statutory trust, business trust, or common-law business trust; or 7
310	310	(J) Any other person that has: 8
311	311	(I) A legal existence separate from any interest holder of that person; or 9
312	312	(II) The power to acquire an interest in real property in its own name; and 10
313	313	(ii) Does not include: 11
314	314	(A) An individual; 12
315	315	(B) A trust with a predominantly donative purpose or a charitable trust; 13
316	316	(C) An association or relationship that is not an entity listed in subsection (11)(i) of this 14
317	317	section and is not a partnership under the rules stated in § 7-12.1-202(c) or a similar provision of 15
318	318	the law of another jurisdiction; 16
319	319	(D) A decedent’s estate; or 17
320	320	(E) A government or a governmental subdivision, agency, or instrumentality. 18
321	321	(12)(13) “Filing entity” means an entity whose formation requires the filing of a public 19
322	322	organic record. The term does not include a limited liability partnership. 20
323	323	(13)(14) “Foreign”, with respect to an entity, means an entity governed as to its internal 21
324	324	affairs by the law of a jurisdiction other than this state. 22
325	325	(14)(15) “Governance interest” means a right under the organic law or organic rules of an 23
326	326	unincorporated entity, other than as a governor, agent, assignee, or proxy, to: 24
327	327	(i) Receive or demand access to information concerning, or the books and records of, the 25
328	328	entity; 26
329	329	(ii) Vote for or consent to the election of the governors of the entity; or 27
330	330	(iii) Receive notice of or vote on or consent to an issue involving the internal affairs of the 28
331	331	entity. 29
332	332	(15)(16) “Governor” means: 30
333	333	(i) A director of a business corporation; 31
334	334	(ii) A director or trustee of a nonprofit corporation; 32
335	335	(iii) A general partner of a general partnership; 33
336	336	(iv) A general partner of a limited partnership; 34
337	337
338	338
339	339	LC002603 - Page 10 of 137
340	340	(v) A manager of a manager-managed limited liability company; 1
341	341	(vi) A member of a member-managed limited liability company; 2
342	342	(vii) A director of a general cooperative association; 3
343	343	(viii) A director of a limited cooperative association; 4
344	344	(ix) A manager of an unincorporated nonprofit association; 5
345	345	(x) A trustee of a statutory trust, business trust, or common-law business trust; or 6
346	346	(xi) Any other person under whose authority the powers of an entity are exercised and 7
347	347	under whose direction the activities and affairs of the entity are managed pursuant to the organic 8
348	348	law and organic rules of the entity. 9
349	349	(16)(17) “Interest” means: 10
350	350	(i) A share in a business corporation; 11
351	351	(ii) A membership in a nonprofit corporation; 12
352	352	(iii) A partnership interest in a general partnership; 13
353	353	(iv) A partnership interest in a limited partnership; 14
354	354	(v) A membership interest in a limited liability company; 15
355	355	(vi) A share in a general cooperative association; 16
356	356	(vii) A member’s interest in a limited cooperative association; 17
357	357	(viii) A membership in an unincorporated nonprofit association; 18
358	358	(ix) A beneficial interest in a statutory trust, business trust, or common-law business trust; 19
359	359	or 20
360	360	(x) A governance interest or distributional interest in any other type of unincorporated 21
361	361	entity. 22
362	362	(17)(18) “Interest exchange” means a transaction authorized by §§ 7-12.1-1131 through 7-23
363	363	12.1-1136. 24
364	364	(18)(19) “Interest holder” means: 25
365	365	(i) A shareholder of a business corporation; 26
366	366	(ii) A member of a nonprofit corporation; 27
367	367	(iii) A general partner of a general partnership; 28
368	368	(iv) A general partner of a limited partnership; 29
369	369	(v) A limited partner of a limited partnership; 30
370	370	(vi) A member of a limited liability company; 31
371	371	(vii) A shareholder of a general cooperative association; 32
372	372	(viii) A member of a limited cooperative association; 33
373	373	(ix) A member of an unincorporated nonprofit association; 34
374	374
375	375
376	376	LC002603 - Page 11 of 137
377	377	(x) A beneficiary or beneficial owner of a statutory trust, business trust, or common-law 1
378	378	business trust; or 2
379	379	(xi) Any other direct holder of an interest. 3
380	380	(19)(20) “Interest holder liability” means: 4
381	381	(i) Personal liability for a liability of an entity which is imposed on a person: 5
382	382	(A) Solely by reason of the status of the person as an interest holder; or 6
383	383	(B) By the organic rules of the entity which make one or more specified interest holders or 7
384	384	categories of interest holders liable in their capacity as interest holders for all or specified liabilities 8
385	385	of the entity; or 9
386	386	(ii) An obligation of an interest holder under the organic rules of an entity to contribute to 10
387	387	the entity. 11
388	388	(20)(21) “Merger” means a transaction authorized by §§ 7-12.1-1121 through 7-12.1-1126. 12
389	389	(21)(22) “Merging entity” means an entity that is a party to a merger and exists immediately 13
390	390	before the merger becomes effective. 14
391	391	(22)(23) “Organic law” means the law of an entity’s jurisdiction of formation governing 15
392	392	the internal affairs of the entity. 16
393	393	(23)(24) “Organic rules” means the public organic record and private organic rules of an 17
394	394	entity. 18
395	395	(24)(25) “Plan” means a plan of merger, plan of interest exchange, plan of conversion, or 19
396	396	plan of domestication. 20
397	397	(25)(26) “Plan of conversion” means a plan under § 7-12.1-1142. 21
398	398	(26)(27) “Plan of domestication” means a plan under § 7-12.1-1152. 22
399	399	(27)(28) “Plan of interest exchange” means a plan under § 7-12.1-1132. 23
400	400	(28)(29) “Plan of merger” means a plan under § 7-12.1-1122. 24
401	401	(29)(30) “Private organic rules” means the rules, whether or not in a record, that govern 25
402	402	the internal affairs of an entity, are binding on all its interest holders, and are not part of its public 26
403	403	organic record, if any. The term includes: 27
404	404	(i) The bylaws of a business corporation; 28
405	405	(ii) The bylaws of a nonprofit corporation; 29
406	406	(iii) The partnership agreement of a general partnership; 30
407	407	(iv) The partnership agreement of a limited partnership; 31
408	408	(v) The operating agreement of a limited liability company; 32
409	409	(vi) The bylaws of a general cooperative association; 33
410	410	(vii) The bylaws of a limited cooperative association; 34
411	411
412	412
413	413	LC002603 - Page 12 of 137
414	414	(viii) The governing principles of an unincorporated nonprofit association; and 1
415	415	(ix) The trust instrument of a statutory trust or similar rules of a business trust or common-2
416	416	law business trust. 3
417	417	(30)(31) “Protected agreement” means: 4
418	418	(i) A record evidencing indebtedness and any related agreement in effect on January 1, 5
419	419	2023; 6
420	420	(ii) An agreement that is binding on an entity on January 1, 2023; 7
421	421	(iii) The organic rules of an entity in effect on January 1, 2023; or 8
422	422	(iv) An agreement that is binding on any of the governors or interest holders of an entity 9
423	423	on January 1, 2023. 10
424	424	(31)(32) “Public organic record” means the record the filing of which by the secretary of 11
425	425	state is required to form an entity and any amendment to or restatement of that record. The term 12
426	426	includes: 13
427	427	(i) The articles of incorporation of a business corporation; 14
428	428	(ii) The articles of incorporation of a nonprofit corporation; 15
429	429	(iii) The certificate of limited partnership of a limited partnership; 16
430	430	(iv) The certificate of organization of a limited liability company; 17
431	431	(v) The articles of incorporation of a general cooperative association; 18
432	432	(vi) The articles of organization of a limited cooperative association; and 19
433	433	(vii) The certificate of trust of a statutory trust or similar record of a business trust. 20
434	434	(32)(33) “Registered foreign entity” means a foreign entity that is registered to do business 21
435	435	in this state pursuant to a record filed by the secretary of state. 22
436	436	(33)(34) “Statement of conversion” means a statement under § 7-12.1-1145. 23
437	437	(34)(35) “Statement of domestication” means a statement under § 7-12.1-1155. 24
438	438	(35)(36) “Statement of interest exchange” means a statement under § 7-12.1-1135. 25
439	439	(36) “Statement of merger” means a statement under § 7-12.1-1125. 26
440	440	(37) “Surviving entity” means the entity that continues in existence after or is created by a 27
441	441	merger. 28
442	442	(38) “Type of entity” means a generic form of entity: 29
443	443	(i) Recognized at common law; or 30
444	444	(ii) Formed under an organic law, whether or not some entities formed under that organic 31
445	445	law are subject to provisions of that law that create different categories of the form of entity. 32
446	446	7-12.1-1125. Articles of merger — Effective date of merger. [Effective January 1, 33
447	447	2023.] 34
448	448
449	449
450	450	LC002603 - Page 13 of 137
451	451	(a) Articles of merger must be signed by each merging entity and filed with the secretary 1
452	452	of state. 2
453	453	(b) Articles of merger must contain: 3
454	454	(1) The name, jurisdiction of formation, and type of entity of each merging entity that is 4
455	455	not the surviving entity; 5
456	456	(2) The name, jurisdiction of formation, and type of entity of the surviving entity; 6
457	457	(3) A statement that the merger was approved by each domestic merging entity, if any, in 7
458	458	accordance with this part and by each foreign merging entity, if any, in accordance with the law of 8
459	459	its jurisdiction of formation; 9
460	460	(4) If the surviving entity exists before the merger and is a domestic filing entity, any 10
461	461	amendment to its public organic record approved as part of the plan of merger; 11
462	462	(5) If the surviving entity is created by the merger and is a domestic filing entity, its public 12
463	463	organic record, as an attachment; and 13
464	464	(6) If the surviving entity is created by the merger and is a domestic limited liability 14
465	465	partnership, its statement of qualification, as an attachment. 15
466	466	(c) In addition to the requirements of subsection (b) of this section, a statement of merger 16
467	467	may contain any other provision not prohibited by law. 17
468	468	(d) If the surviving entity is a domestic entity, its public organic record, if any, must satisfy 18
469	469	the requirements of the law of this state, except that the public organic record does not need to be 19
470	470	signed. 20
471	471	(e) If the surviving or resulting entity is not a domestic limited liability partnership or 21
472	472	another filing entity of record in the office of the secretary of state, the articles of merger must 22
473	473	contain a statement that the surviving or resulting other entity agrees that it may be served with 23
474	474	process in Rhode Island in any action, suit, or proceeding for the enforcement of any obligation of 24
475	475	any domestic limited liability partnership that is to merge, irrevocably appointing the secretary of 25
476	476	state as its agent to accept service of process in the action, suit, or proceeding and specifying the 26
477	477	address to which a copy of the process is to be mailed to it by the secretary of state. In the event of 27
478	478	service under this section on the secretary of state, the procedures set forth in § 7-12.1-912 are 28
479	479	applicable, except that the plaintiff in any action, suit, or proceeding shall furnish the secretary of 29
480	480	state with the address specified in the articles of merger provided for in this section and any other 30
481	481	address that the plaintiff elects to furnish, together with copies of the process as required by the 31
482	482	secretary of state, and the secretary of state shall notify the surviving or resulting other business 32
483	483	entity at all addresses furnished by the plaintiff in accordance with the procedures set forth in § 7-33
484	484	12.1-912. 34
485	485
486	486
487	487	LC002603 - Page 14 of 137
488	488	(f) If the surviving entity is a domestic partnership, the merger becomes effective when the 1
489	489	articles of merger are effective. In all other cases, the merger becomes effective on the later of: 2
490	490	(1) The date and time provided by the organic law of the surviving entity; and 3
491	491	(2) When the articles of merger are effective. 4
492	492	SECTION 3. Sections 7-13.1-121, 7-13.1-123, 7-13.1-206, 7-13.1-212, 7-13.1-213, 7-5
493	493	13.1-812, 7-13.1-1011, 7-13.1-1012, 7-13.1-1101 and 7-13.1-1125 of the General Laws in Chapter 6
494	494	7-13.1 entitled "Uniform Limited Partnership Act [Effective January 1, 2023.]" are hereby amended 7
495	495	to read as follows: 8
496	496	7-13.1-121. Service of process, notice, or demand. [Effective January 1, 2023.] 9
497	497	(a) A limited partnership or registered foreign limited partnership may be served with any 10
498	498	process, notice, or demand required or permitted by law by serving its registered agent. 11
499	499	(b) If a limited partnership or registered foreign limited partnership fails to appoint or 12
500	500	maintain a registered agent in this state, or whenever its registered agent cannot with reasonable 13
501	501	diligence be found at the registered office, then the secretary of state is an agent of the corporation 14
502	502	limited partnership or registered foreign limited partnership upon whom any process, notice, 15
503	503	or demand may be served. Service on the secretary of state of any process, notice, or demand is 16
504	504	made by delivering to and leaving with the secretary of state or with any clerk having charge of the 17
505	505	corporation department of the office, duplicate copies of the process, notice, or demand. In the 18
506	506	event any process, notice, or demand is served on the secretary of state, the secretary of state shall 19
507	507	immediately forward one of the copies by certified mail, addressed to the corporation limited 20
508	508	partnership or registered foreign limited partnership at its registered office. Any service upon 21
509	509	the secretary of state is returnable in not less than thirty (30) days. 22
510	510	(c) The secretary of state shall maintain a record of any such service setting forth the name 23
511	511	of the plaintiff and defendant, the title, docket number and nature of the proceeding in which 24
512	512	process has been served upon the secretary of state, the fact that service has been effected pursuant 25
513	513	to this section, the return date thereof, and the day and hour when the service was made. The 26
514	514	secretary of state shall not be required to retain such information for a period longer than five (5) 27
515	515	years from receipt of the service of process. 28
516	516	(d) Service of process, notice, or demand on a registered agent must be in a written record. 29
517	517	(e) Service of process, notice, or demand may be made by other means under law other 30
518	518	than this chapter. 31
519	519	7-13.1-123. Fees for filing documents and issuing certificates. [Effective January 1, 32
520	520	2023.] 33
521	521	The secretary of state shall charge and collect for: 34
522	522
523	523
524	524	LC002603 - Page 15 of 137
525	525	(1) Filing a certificate of limited partnership, one hundred dollars ($100); 1
526	526	(2) Filing a certificate of amendment to a certificate of limited partnership, fifty dollars 2
527	527	($50.00); 3
528	528	(3) Filing a certificate of correction to a certificate of limited partnership, fifty dollars 4
529	529	($50.00); 5
530	530	(3)(4) Filing a certificate of dissolution of a certificate of limited partnership, ten dollars 6
531	531	($10.00); 7
532	532	(4)(5) Filing an application to reserve a limited partnership name, fifty dollars ($50.00); 8
533	533	(5)(6) Filing a notice of transfer of a reserved limited partnership name, fifty dollars 9
534	534	($50.00); 10
535	535	(6)(7) Filing a statement of change of address of specified office or change of specified 11
536	536	agent, twenty dollars ($20.00); 12
537	537	(7)(8) Filing a statement of change of address only for a specified agent, without fee; 13
538	538	(8)(9) Filing an application of a foreign limited partnership to register as a foreign limited 14
539	539	partnership, one hundred dollars ($100); 15
540	540	(9)(10) Filing a certificate of withdrawal of registration as a foreign limited partnership, 16
541	541	twenty-five dollars ($25.00); 17
542	542	(10)(11) Filing any other document, statement, or report of a domestic or foreign limited 18
543	543	partnership, except an annual report, ten dollars ($10.00); 19
544	544	(11)(12) Filing a certificate of amendment of a foreign limited partnership, fifty dollars 20
545	545	($50.00); 21
546	546	(12)(13) An annual report of a domestic or foreign limited partnership, fifty dollars 22
547	547	($50.00); 23
548	548	(13)(14) To withdraw the certificate of revocation of a limited partnership, whether 24
549	549	domestic or foreign, a penalty in the amount of fifty dollars ($50.00) for each year or part of the 25
550	550	year that has elapsed since the issuance of the certificate of revocation; 26
551	551	(14)(15) For issuing a certificate of good standing/letter of status, twenty dollars ($20.00). 27
552	552	(15)(16) For issuing a certificate of fact, thirty dollars ($30.00); 28
553	553	(16)(17) For furnishing a certified copy of any document, instrument, or paper relating to 29
554	554	a domestic or foreign limited partnership, a fee of fifteen cents ($.15) per page and ten dollars 30
555	555	($10.00) for the certificate and affirming the seal to it; and 31
556	556	(17)(18) Service of process on the secretary of state as registered agent of a limited 32
557	557	partnership, fifteen dollars ($15.00) which amount may be recovered as a taxable cost by the party 33
558	558	to the suit or action making the service if the party prevails in the suit or action. 34
559	559
560	560
561	561	LC002603 - Page 16 of 137
562	562	7-13.1-206. Filing requirements. [Effective January 1, 2023.] 1
563	563	(a) To be filed by the secretary of state pursuant to this chapter, a record must be received 2
564	564	by the secretary of state, must comply with this chapter, and satisfy the following: 3
565	565	(1) The filing of the record must be required or permitted by this chapter. 4
566	566	(2) The record must be physically delivered in written form unless and to the extent the 5
567	567	secretary of state permits electronic delivery of records. 6
568	568	(3) The words in the record must be in English, and numbers must be in Arabic or Roman 7
569	569	numerals, but the name of an entity need not be in English if written in English letters or Arabic or 8
570	570	Roman numerals. 9
571	571	(4) The record must be signed under pains and penalties of perjury by a person authorized 10
572	572	or required under this chapter to sign the record. 11
573	573	(5) The record must state the name and capacity, if any, of each individual who signed it, 12
574	574	either on behalf of the individual or the person authorized or required to sign the record, but need 13
575	575	not contain a seal, attestation, acknowledgment, or verification. 14
576	576	(b) If law other than this chapter prohibits the disclosure by the secretary of state of 15
577	577	information contained in a record delivered to the secretary of state for filing, the secretary of state 16
578	578	shall file the record if the record otherwise complies with this chapter but may redact the 17
579	579	information. 18
580	580	(c) When a record is delivered to the secretary of state for filing, any fee required under 19
581	581	this chapter and any fee, tax, interest, or penalty required to be paid under this chapter or law other 20
582	582	than this chapter must be paid in a manner permitted by the secretary of state or by that law. 21
583	583	(d) The secretary of state may require that a record delivered in written form be 22
584	584	accompanied by an identical or conformed copy. 23
585	585	(e) The secretary of state may provide forms for filings required or permitted to be made 24
586	586	by this chapter, but, except as otherwise provided in subsection (f) of this section and § 7-13.1-22 25
587	587	7-13.1-212, their use is not required. 26
588	588	(f) The secretary of state may require that a cover sheet for a filing be on a form prescribed 27
589	589	by the secretary of state. 28
590	590	7-13.1-212. Annual report for secretary of state. [Effective January 1, 2023.] 29
591	591	(a) A limited partnership or registered foreign limited partnership shall deliver to the 30
592	592	secretary of state for filing an annual report that states: 31
593	593	(1) The name of the partnership or foreign partnership; 32
594	594	(2) The addresses of its principal office; 33
595	595	(3) The name and address of each general partner; 34
596	596
597	597
598	598	LC002603 - Page 17 of 137
599	599	(4) In the case of a foreign partnership, its jurisdiction of formation and any alternate name 1
600	600	adopted under § 7-13.1-1006(a); 2
601	601	(5) A brief statement of the character of the business in which the limited partnership is 3
602	602	actually engaged in this state; and 4
603	603	(6) Any additional information that is required by the secretary of state. 5
604	604	(b) The annual report must be made on forms prescribed and furnished by the secretary of 6
605	605	state, and the information in the annual report must be current as of the date the report is signed by 7
606	606	the limited partnership or registered foreign limited partnership. 8
607	607	(c) The first annual report must be delivered to the secretary of state for filing after February 9
608	608	1 and before May 1 of the year following the calendar year in which the limited partnership’s 10
609	609	certificate of limited partnership became effective or the registered foreign limited partnership 11
610	610	registered to do business in this state. Subsequent annual reports must be delivered to the secretary 12
611	611	of state for filing after February 1 and before May 1 of each calendar year thereafter. Proof to the 13
612	612	satisfaction of the secretary of state that prior to May 1 the report was deposited in the United States 14
613	613	mail in a sealed envelope, properly addressed, with postage prepaid, is deemed to be a compliance 15
614	614	with this requirement. 16
615	615	(d) If the secretary of state finds that the annual report conforms to the requirements of this 17
616	616	chapter, the secretary of state shall file the report. If an annual report does not contain the 18
617	617	information required by this section, the secretary of state promptly shall notify the reporting 19
618	618	limited partnership or registered foreign limited partnership in a record and return the report for 20
619	619	correction, in which event the penalties subsequently prescribed for failure to file the report within 21
620	620	the time previously provided do not apply if the report is corrected to conform to the requirements 22
621	621	of this chapter and returned to the secretary of state within thirty (30) days from the date on which 23
622	622	it was mailed to the corporation limited partnership by the secretary of state. 24
623	623	(e) Each limited partnership, domestic or foreign, that fails or refuses to file its annual 25
624	624	report for any year within thirty (30) days after the time prescribed by this chapter is subject to a 26
625	625	penalty of twenty-five dollars ($25.00) per year. 27
626	626	7-13.1-213. Filing of returns with the tax administrator — Annual charge. [Effective 28
627	627	January 1, 2023.] 29
628	628	(a) A limited partnership certified under this chapter shall file a return, in the form and 30
629	629	containing the information as prescribed by the tax administrator, as follows: 31
630	630	(1) If the fiscal year of the limited partnership is the calendar year, on or before the fifteenth 32
631	631	day of April in the year following the close of the fiscal year; and 33
632	632	(2) If the fiscal year of the limited partnership is not a calendar year, on or before the 34
633	633
634	634
635	635	LC002603 - Page 18 of 137
636	636	fifteenth day of the fourth month following the close of the fiscal year. 1
637	637	(b) For tax years beginning after December 31, 2022 December 31, 2015, a limited 2
638	638	partnership certified under this chapter shall file a return, in the form and containing the information 3
639	639	as prescribed by the tax administrator, and shall be filed on or before the date a federal tax return 4
640	640	is due to be filed, without regard to extension. 5
641	641	(c) An annual charge, equal to the minimum tax imposed upon a corporation under § 44-6
642	642	11-2(e), shall be due on the filing of the limited partnership’s return filed with the tax administrator 7
643	643	and shall be paid to the division of taxation. 8
644	644	(d) The annual charge is delinquent if not paid by the due date for the filing of the return 9
645	645	and an addition of one hundred dollars ($100) to the charge is then due. 10
646	646	7-13.1-812. Issuance of certificates of revocation. [Effective January 1, 2023.] 11
647	647	(a) Upon revoking any such certificate of limited partnership, the secretary of state shall: 12
648	648	(1) Issue a certificate of revocation in duplicate; 13
649	649	(2) File one of the certificates in the secretary of state’s office; 14
650	650	(3) Send to the limited partnership by regular mail a certificate of revocation, addressed to 15
651	651	the registered agent of the limited partnership in this state on file with the secretary of state’s office; 16
652	652	provided, however, that if a prior mailing addressed to the address of the registered agent of the 17
653	653	limited partnership in this state currently on file with the secretary of state’s office has been returned 18
654	654	to the secretary of state as undeliverable by the United States Postal Service for any reason, or if 19
655	655	the revocation certificate is returned as undeliverable to the secretary of state’s office by the United 20
656	656	States Postal Service for any reason, the secretary of state shall give notice as follows: 21
657	657	(i) To the limited partnership at its principal office of record as shown in its most recent 22
658	658	annual report, and no further notice shall be required; or 23
659	659	(ii) In the case of a limited partnership that has not yet filed an annual report, then to the 24
660	660	domestic limited liability company limited partnership at the principal office in the articles of 25
661	661	organization or to the authorized person listed on the articles of organization certificate of 26
662	662	registration, and no further notice shall be required. 27
663	663	(b) A limited partnership that is revoked continues in existence as an entity but may not 28
664	664	carry on any activities except as necessary to wind up its activities and affairs and liquidate its 29
665	665	assets under §§ 7-13.1-802, 7-13.1-806, 7-13.1-807, 7-13.1-808, and 7-13.1-810, or to apply for 30
666	666	reinstatement under § 7-13.1-813. 31
667	667	(c) The revocation of a limited partnership does not terminate the authority of its registered 32
668	668	agent. 33
669	669	7-13.1-1011. Issuance of certificates of revocation. [Effective January 1, 2023.] 34
670	670
671	671
672	672	LC002603 - Page 19 of 137
673	673	(a) Upon revoking any such certificate of registration of limited partnership, the secretary 1
674	674	of state shall: 2
675	675	(1) Issue a certificate of revocation in duplicate; 3
676	676	(2) File one of the certificates in the secretary of state’s office; 4
677	677	(3) Send to the limited partnership by regular mail a certificate of revocation, addressed to 5
678	678	the registered agent of the limited partnership in this state on file with the secretary of state’s office; 6
679	679	provided, however, that if a prior mailing addressed to the address of the registered agent of the 7
680	680	limited partnership in this state currently on file with the secretary of state’s office has been returned 8
681	681	to the secretary of state as undeliverable by the United States Postal Service for any reason, or if 9
682	682	the revocation certificate is returned as undeliverable to the secretary of state’s office by the United 10
683	683	States Postal Service for any reason, the secretary of state shall give notice as follows: 11
684	684	(i) To the limited partnership at its principal office of record as shown in its most recent 12
685	685	annual report, and no further notice shall be required; or 13
686	686	(ii) In the case of a limited partnership that has not yet filed an annual report, then to the 14
687	687	principal office listed in the certificate of registration, and no further notice shall be required. 15
688	688	(b) The authority of the registered foreign limited partnership to do business in this state 16
689	689	ceases on the effective date of the certificate of revocation, or to apply for reinstatement under 17
690	690	§ 7-13.1-1012 unless before that date the partnership cures each ground for revocation stated 18
691	691	in the notice. 19
692	692	(c) The revocation of a limited partnership does not terminate the authority of its registered 20
693	693	agent. 21
694	694	7-13.1-1012. Reinstatement. [Effective January 1, 2023.] 22
695	695	(a) Within ten (10) years after issuing a certificate of revocation as provided in § 7-13.1-23
696	696	1011, the secretary of state may withdraw the certificate of revocation and retroactively reinstate 24
697	697	the limited partnership in good standing as if its certificate of registration of limited partnership had 25
698	698	not been revoked except as subsequently provided: 26
699	699	(1) On the filing by the limited partnership of the documents it had previously failed to file 27
700	700	as set forth in § 7-13.1-1010(a)(3) through (6)(a)(8) and payment of any fees or taxes it had 28
701	701	previously failed to pay; 29
702	702	(2) On the payment by the limited partnership of a penalty in the amount of fifty dollars 30
703	703	($50.00) for each year or part of year that has elapsed since the issuance of the certificate of 31
704	704	revocation; and 32
705	705	(3) Upon the filing by the limited partnership of a certificate of good standing from the 33
706	706	Rhode Island division of taxation. 34
707	707
708	708
709	709	LC002603 - Page 20 of 137
710	710	(b) If, as permitted by the provisions of this chapter or chapter 1.2, 6, or 12.1 of this title, 1
711	711	another limited liability company, business or nonprofit corporation, registered limited liability 2
712	712	partnership or a limited partnership, or in each case domestic or foreign, authorized and qualified 3
713	713	to transact business in this state, bears or has filed a fictitious business name statement as to or 4
714	714	reserved or registered a name that is the same as, the name of the limited partnership with respect 5
715	715	to which the certificate of revocation is proposed to be withdrawn, then the secretary of state shall 6
716	716	condition the withdrawal of the certificate of revocation on the reinstated limited partnership 7
717	717	amending its certificate of registration so as to designate a name that meets the requirements of § 8
718	718	7-13.1-114 by adopting an alternate name pursuant to § 7-13.1-1006(a). 9
719	719	(c) When reinstatement under this section has become effective, the following rules apply: 10
720	720	(1) The reinstatement relates back to and takes effect as of the effective date of the 11
721	721	certificate of revocation. 12
722	722	(2) The limited partnership resumes carrying on its activities and affairs as if the revocation 13
723	723	had not occurred. 14
724	724	(3) The rights of a person arising out of an act or omission in reliance on the revocation 15
725	725	before the person knew or had notice of the reinstatement are not affected. 16
726	726	7-13.1-1101. Definitions. [Effective January 1, 2023.] 17
727	727	As used in this part: 18
728	728	(1) “Acquired entity” means the entity, all of one or more classes or series of interests of 19
729	729	which are acquired in an interest exchange. 20
730	730	(2) “Acquiring entity” means the entity that acquires all of one or more classes or series of 21
731	731	interests of the acquired entity in an interest exchange. 22
732	732	(3) "Articles of merger" means a statement under § 7-13.1-1125. 23
733	733	(3)(4) “Conversion” means a transaction authorized by subpart 4. 24
734	734	(4)(5) “Converted entity” means the converting entity as it continues in existence after a 25
735	735	conversion. 26
736	736	(5)(6) “Converting entity” means the domestic entity that approves a plan of conversion 27
737	737	pursuant to § 7-13.1-1143 or the foreign entity that approves a conversion pursuant to the law of 28
738	738	its jurisdiction of formation. 29
739	739	(6)(7) “Distributional interest” means the right under an unincorporated entity’s organic 30
740	740	law and organic rules to receive distributions from the entity. 31
741	741	(7)(8) “Domestic”, with respect to an entity, means governed as to its internal affairs by 32
742	742	the law of this state. 33
743	743	(8)(9) “Domesticated limited partnership” means the domesticating limited partnership as 34
744	744
745	745
746	746	LC002603 - Page 21 of 137
747	747	it continues in existence after a domestication. 1
748	748	(9)(10) “Domesticating limited partnership” means the domestic limited partnership that 2
749	749	approves a plan of domestication pursuant to § 7-13.1-1153 or the foreign limited partnership that 3
750	750	approves a domestication pursuant to the law of its jurisdiction of formation. 4
751	751	(10)(11) “Domestication” means a transaction authorized by subpart 5. 5
752	752	(11)(12) “Entity”: 6
753	753	(i) Means: 7
754	754	(A) A business corporation; 8
755	755	(B) A nonprofit corporation; 9
756	756	(C) A general partnership, including a limited liability partnership; 10
757	757	(D) A limited partnership, including a limited liability limited partnership; 11
758	758	(E) A limited liability company; 12
759	759	(F) A general cooperative association; 13
760	760	(G) A limited cooperative association; 14
761	761	(H) An unincorporated nonprofit association; 15
762	762	(I) A statutory trust, business trust, or common-law business trust; or 16
763	763	(J) Any other person that has: 17
764	764	(I) A legal existence separate from any interest holder of that person; or 18
765	765	(II) The power to acquire an interest in real property in its own name; and 19
766	766	(ii) Does not include: 20
767	767	(A) An individual; 21
768	768	(B) A trust with a predominantly donative purpose or a charitable trust; 22
769	769	(C) An association or relationship that is not an entity listed in subsection (11)(i) of this 23
770	770	section and is not a partnership under the rules stated in § 7-12-18 [repealed] 7-12.1-202 or a 24
771	771	similar provision of the law of another jurisdiction; 25
772	772	(D) A decedent’s estate; or 26
773	773	(E) A government or a governmental subdivision, agency, or instrumentality. 27
774	774	(12)(13) “Filing entity” means an entity whose formation requires the filing of a public 28
775	775	organic record. The term does not include a limited liability partnership. 29
776	776	(13)(14) “Foreign”, with respect to an entity, means an entity governed as to its internal 30
777	777	affairs by the law of a jurisdiction other than this state. 31
778	778	(14)(15) “Governance interest” means a right under the organic law or organic rules of an 32
779	779	unincorporated entity, other than as a governor, agent, assignee, or proxy, to: 33
780	780	(i) Receive or demand access to information concerning, or the books and records of, the 34
781	781
782	782
783	783	LC002603 - Page 22 of 137
784	784	entity; 1
785	785	(ii) Vote for or consent to the election of the governors of the entity; or 2
786	786	(iii) Receive notice of or vote on or consent to an issue involving the internal affairs of the 3
787	787	entity. 4
788	788	(15)(16) “Governor” means: 5
789	789	(i) A director of a business corporation or an officer of a business corporation that has no 6
790	790	board of directors; 7
791	791	(ii) A director or trustee of a nonprofit corporation; 8
792	792	(iii) A general partner of a general partnership; 9
793	793	(iv) A general partner of a limited partnership; 10
794	794	(v) A manager of a manager-managed limited liability company; 11
795	795	(vi) A member of a member-managed limited liability company; 12
796	796	(vii) A director of a general cooperative association; 13
797	797	(viii) A director of a limited cooperative association; 14
798	798	(ix) A manager of an unincorporated nonprofit association; 15
799	799	(x) A trustee of a statutory trust, business trust, or common-law business trust; or 16
800	800	(xi) Any other person under whose authority the powers of an entity are exercised and 17
801	801	under whose direction the activities and affairs of the entity are managed pursuant to the organic 18
802	802	law and organic rules of the entity. 19
803	803	(16)(17) “Interest” means: 20
804	804	(i) A share in a business corporation; 21
805	805	(ii) A membership in a nonprofit corporation; 22
806	806	(iii) A partnership interest in a general partnership; 23
807	807	(iv) A partnership interest in a limited partnership; 24
808	808	(v) A membership interest in a limited liability company; 25
809	809	(vi) A share in a general cooperative association; 26
810	810	(vii) A member’s interest in a limited cooperative association; 27
811	811	(viii) A membership in an unincorporated nonprofit association; 28
812	812	(ix) A beneficial interest in a statutory trust, business trust, or common-law business trust; 29
813	813	or 30
814	814	(x) A governance interest or distributional interest in any other type of unincorporated 31
815	815	entity. 32
816	816	(17)(18) “Interest exchange” means a transaction authorized by subpart 3. 33
817	817	(18)(19) “Interest holder” means: 34
818	818
819	819
820	820	LC002603 - Page 23 of 137
821	821	(i) A shareholder of a business corporation; 1
822	822	(ii) A member of a nonprofit corporation; 2
823	823	(iii) A general partner of a general partnership; 3
824	824	(iv) A general partner of a limited partnership; 4
825	825	(v) A limited partner of a limited partnership; 5
826	826	(vi) A member of a limited liability company; 6
827	827	(vii) A shareholder of a general cooperative association; 7
828	828	(viii) A member of a limited cooperative association; 8
829	829	(ix) A member of an unincorporated nonprofit association; 9
830	830	(x) A beneficiary or beneficial owner of a statutory trust, business trust, or common-law 10
831	831	business trust; or 11
832	832	(xi) Any other direct holder of an interest. 12
833	833	(19)(20) “Interest holder liability” means: 13
834	834	(i) Personal liability for a liability of an entity which is imposed on a person: 14
835	835	(A) Solely by reason of the status of the person as an interest holder; or 15
836	836	(B) By the organic rules of the entity which make one or more specified interest holders or 16
837	837	categories of interest holders liable in their capacity as interest holders for all or specified liabilities 17
838	838	of the entity; or 18
839	839	(ii) An obligation of an interest holder under the organic rules of an entity to contribute to 19
840	840	the entity. 20
841	841	(20)(21) “Merger” means a transaction authorized by subpart 2. 21
842	842	(21)(22) “Merging entity” means an entity that is a party to a merger and exists immediately 22
843	843	before the merger becomes effective. 23
844	844	(22)(23) “Organic law” means the law of an entity’s jurisdiction of formation governing 24
845	845	the internal affairs of the entity. 25
846	846	(23)(24) “Organic rules” means the public organic record and private organic rules of an 26
847	847	entity. 27
848	848	(24)(25) “Plan” means a plan of merger, plan of interest exchange, plan of conversion, or 28
849	849	plan of domestication. 29
850	850	(25)(26) “Plan of conversion” means a plan under § 7-13.1-1142. 30
851	851	(26)(27) “Plan of domestication” means a plan under § 7-13.1-1152. 31
852	852	(27)(28) “Plan of interest exchange” means a plan under § 7-13.1-1132. 32
853	853	(28)(29) “Plan of merger” means a plan under § 7-13.1-1122. 33
854	854	(29)(30) “Private organic rules” means the rules, whether or not in a record, that govern 34
855	855
856	856
857	857	LC002603 - Page 24 of 137
858	858	the internal affairs of an entity, are binding on all its interest holders, and are not part of its public 1
859	859	organic record, if any. The term includes: 2
860	860	(i) The bylaws of a business corporation; 3
861	861	(ii) The bylaws of a nonprofit corporation; 4
862	862	(iii) The partnership agreement of a general partnership; 5
863	863	(iv) The partnership agreement of a limited partnership; 6
864	864	(v) The operating agreement of a limited liability company; 7
865	865	(vi) The bylaws of a general cooperative association; 8
866	866	(vii) The bylaws of a limited cooperative association; 9
867	867	(viii) The governing principles of an unincorporated nonprofit association; and 10
868	868	(ix) The trust instrument of a statutory trust or similar rules of a business trust or a common-11
869	869	law business trust. 12
870	870	(30)(31) “Protected agreement” means: 13
871	871	(i) A record evidencing indebtedness and any related agreement in effect on January 1, 14
872	872	2023; 15
873	873	(ii) An agreement that is binding on an entity on January 1, 2023; 16
874	874	(iii) The organic rules of an entity in effect on January 1, 2023; or 17
875	875	(iv) An agreement that is binding on any of the governors or interest holders of an entity 18
876	876	on January 1, 2023. 19
877	877	(31)(32) “Public organic record” means the record the filing of which by the secretary of 20
878	878	state is required to form an entity and any amendment to or restatement of that record. The term 21
879	879	includes: 22
880	880	(i) The articles of incorporation of a business corporation; 23
881	881	(ii) The articles of incorporation of a nonprofit corporation; 24
882	882	(iii) The certificate of limited partnership of a limited partnership; 25
883	883	(iv) The certificate of organization of a limited liability company; 26
884	884	(v) The articles of incorporation of a general cooperative association; 27
885	885	(vi) The articles of organization of a limited cooperative association; and 28
886	886	(vii) The certificate of trust of a statutory trust or similar record of a business trust. 29
887	887	(32)(33) “Registered foreign entity” means a foreign entity that is registered to do business 30
888	888	in this state pursuant to a record filed by the secretary of state. 31
889	889	(33)(34) “Statement of conversion” means a statement under § 7-13.1-1145. 32
890	890	(34)(35) “Statement of domestication” means a statement under § 7-13.1-1155. 33
891	891	(35)(36) “Statement of interest exchange” means a statement under § 7-13.1-1135. 34
892	892
893	893
894	894	LC002603 - Page 25 of 137
895	895	(36) “Statement of merger” means a statement under § 7-13.1-1125. 1
896	896	(37) “Surviving entity” means the entity that continues in existence after or is created by a 2
897	897	merger. 3
898	898	(38) “Type of entity” means a generic form of entity: 4
899	899	(i) Recognized at common law; or 5
900	900	(ii) Formed under an organic law, whether or not some entities formed under that organic 6
901	901	law are subject to provisions of that law that create different categories of the form of entity. 7
902	902	7-13.1-1125. Articles of merger — Effective date of merger. [Effective January 1, 8
903	903	2023.] 9
904	904	(a) Articles of merger must be signed by each merging entity and delivered to the secretary 10
905	905	of state for filing. 11
906	906	(b) Articles of merger must contain: 12
907	907	(1) The name, jurisdiction of formation, and type of entity of each merging entity that is 13
908	908	not the surviving entity; 14
909	909	(2) The name, jurisdiction of formation, and type of entity of the surviving entity; 15
910	910	(3) A statement that the merger was approved by each domestic merging entity, if any, in 16
911	911	accordance with this subpart and by each foreign merging entity, if any, in accordance with the law 17
912	912	of its jurisdiction of formation; 18
913	913	(4) If the surviving entity exists before the merger and is a domestic filing entity, any 19
914	914	amendment to its public organic record approved as part of the plan of merger; 20
915	915	(5) If the surviving entity is created by the merger and is a domestic filing entity, its public 21
916	916	organic record, as an attachment; and 22
917	917	(6) If the surviving entity is created by the merger and is a domestic limited liability 23
918	918	partnership, its statement of qualification, as an attachment. 24
919	919	(c) In addition to the requirements of subsection (b) of this section, a statement of merger 25
920	920	may contain any other provision not prohibited by law. 26
921	921	(d) If the surviving entity is a domestic entity, its public organic record, if any, must satisfy 27
922	922	the requirements of the law of this state, except that the public organic record does not need to be 28
923	923	signed. 29
924	924	(e) If the surviving or resulting entity is not a domestic limited partnership or another filing 30
925	925	entity of record in the office of the secretary of state, the articles of merger must contain a 31
926	926	statement that the surviving or resulting other entity agrees that it may be served with process in 32
927	927	Rhode Island in any action, suit or proceeding for the enforcement of any obligation of any 33
928	928	domestic limited partnership that is to merge, irrevocably appointing the secretary of state as its 34
929	929
930	930
931	931	LC002603 - Page 26 of 137
932	932	agent to accept service of process in the action, suit or proceeding and specifying the address to 1
933	933	which a copy of the process is to be mailed to it by the secretary of state. In the event of service 2
934	934	under this section on the secretary of state, the procedures set forth in § 7-13.1-121 are applicable, 3
935	935	except that the plaintiff in any action, suit or proceeding shall furnish the secretary of state with the 4
936	936	address specified in the articles of merger provided for in this section and any other address that 5
937	937	the plaintiff elects to furnish, together with copies of the process as required by the secretary of 6
938	938	state, and the secretary of state shall notify the surviving or resulting other business entity at all 7
939	939	addresses furnished by the plaintiff in accordance with the procedures set forth in § 7-13.1-121. 8
940	940	(f) A The articles of merger must contain a statement that the merging entity certifies 9
941	941	that it has no outstanding tax obligations. As required by §§ 7-13.1-213, 7-16-67 and 44-11-26.1, 10
942	942	the merging entity has paid all fees and taxes. 11
943	943	(g) If the surviving entity is a domestic limited partnership, the merger becomes effective 12
944	944	when the articles of merger are effective. In all other cases, the merger becomes effective on the 13
945	945	later of: 14
946	946	(1) The date and time provided by the organic law of the surviving entity; and 15
947	947	(2) When the articles of merger is effective. 16
948	948	SECTION 4. Section 27-19-55 of the General Laws in Chapter 27-19 entitled "Nonprofit 17
949	949	Hospital Service Corporations" is hereby amended to read as follows: 18
950	950	27-19-55. Coverage for early intervention services. 19
951	951	(a) Every individual or group hospital or medical expense insurance policy or contract 20
952	952	providing coverage for dependent children, delivered or renewed in this state on or after July 1, 21
953	953	2004, shall include coverage of early intervention services which coverage shall take effect no later 22
954	954	than January 1, 2005. Such coverage shall be limited to a benefit of five thousand dollars ($5,000) 23
955	955	per dependent child per policy or calendar year and shall not be subject to deductibles and 24
956	956	coinsurance factors. Any amount paid by an insurer under this section for a dependent child shall 25
957	957	not be applied to any annual or lifetime maximum benefit contained in the policy or contract. For 26
958	958	the purpose of this section, “early intervention services” means, but is not limited to, speech and 27
959	959	language therapy, occupational therapy, physical therapy, evaluation, case management, nutrition, 28
960	960	service plan development and review, nursing services, and assistive technology services and 29
961	961	devices for dependents from birth to age three (3) who are certified by the department of human 30
962	962	services as eligible for services under part C of the Individuals with Disabilities Education Act (20 31
963	963	U.S.C. § 1471 et seq.) (20 U.S.C. § 1431 et seq.). 32
964	964	(b) Subject to the annual limits provided in this section, insurers shall reimburse certified 33
965	965	early intervention providers, who are designated as such by the Department of Human Services, for 34
966	966
967	967
968	968	LC002603 - Page 27 of 137
969	969	early intervention services as defined in this section at rates of reimbursement equal to or greater 1
970	970	than the prevailing integrated state/Medicaid rate for early intervention services as established by 2
971	971	the Department of Human Services. 3
972	972	(c) This section shall not apply to insurance coverage providing benefits for: (1) hospital 4
973	973	confinement indemnity; (2) disability income; (3) accident only; (4) long-term care; (5) Medicare 5
974	974	supplement; (6) limited benefit health; (7) specified disease indemnity; (8) sickness or bodily injury 6
975	975	or death by accident or both; and (9) other limited benefit policies. 7
976	976	SECTION 5. Section 27-20-50 of the General Laws in Chapter 27-20 entitled "Nonprofit 8
977	977	Medical Service Corporations" is hereby amended to read as follows: 9
978	978	27-20-50. Coverage for early intervention services. 10
979	979	(a) Every individual or group hospital or medical expense insurance policy or contract 11
980	980	providing coverage for dependent children, delivered or renewed in this state on or after July 1, 12
981	981	2004, shall include coverage of early intervention services which coverage shall take effect no later 13
982	982	than January 1, 2005. Such coverage shall be limited to a benefit of five thousand dollars ($5,000) 14
983	983	per dependent child per policy or calendar year and shall not be subject to deductibles and 15
984	984	coinsurance factors. Any amount paid by an insurer under this section for a dependent child shall 16
985	985	not be applied to any annual or lifetime maximum benefit contained in the policy or contract. For 17
986	986	the purpose of this section, “early intervention services” means, but is not limited to, speech and 18
987	987	language therapy, occupational therapy, physical therapy, evaluation, case management, nutrition, 19
988	988	service plan development and review, nursing services, and assistive technology services and 20
989	989	devices for dependents from birth to age three (3) who are certified by the department of human 21
990	990	services as eligible for services under part C of the Individuals with Disabilities Education Act (20 22
991	991	U.S.C. § 1471 et seq.) (20 U.S.C. § 1431 et seq.). 23
992	992	(b) Subject to the annual limits provided in this section, insurers shall reimburse certified 24
993	993	early intervention providers, who are designated as such by the Department of Human Services, for 25
994	994	early intervention services as defined in this section at rates of reimbursement equal to or greater 26
995	995	than the prevailing integrated state/Medicaid rate for early intervention services as established by 27
996	996	the Department of Human Services. 28
997	997	(c) This section shall not apply to insurance coverage providing benefits for: (1) hospital 29
998	998	confinement indemnity; (2) disability income; (3) accident only; (4) long-term care; (5) Medicare 30
999	999	supplement; (6) limited benefit health; (7) specified disease indemnity; (8) sickness or bodily injury 31
1000	1000	or death by accident or both; and (9) other limited benefit policies. 32
1001	1001	SECTION 6. Section 27-20.10-3 of the General Laws in Chapter 27-20.10 entitled "Rental 33
1002	1002	Network Contract Arrangements" is hereby amended to read as follows: 34
1003	1003
1004	1004
1005	1005	LC002603 - Page 28 of 137
1006	1006	27-20.10-3. Registration. 1
1007	1007	(a) Any person that commences business as a contracting entity shall register with the 2
1008	1008	department within thirty (30) days of commencing business in the state of Rhode Island unless such 3
1009	1009	person is licensed by the department as an insurer. Upon passage of this chapter, each person not 4
1010	1010	licensed by the department as a contracting entity shall register with the department within ninety 5
1011	1011	(90) days of the effective date of this chapter. 6
1012	1012	(1) Registration shall consist of the submission of the following information: 7
1013	1013	(i) The official name of the contracting entity, including and any d/b/a designations used 8
1014	1014	in this state; 9
1015	1015	(ii) The mailing address and main telephone number for the contracting entity’s main 10
1016	1016	headquarters; and 11
1017	1017	(iii) The name and telephone number of the contracting entity’s representative who shall 12
1018	1018	serve as the primary contact with the department. 13
1019	1019	(2) The information required by this section shall be submitted in written or electronic 14
1020	1020	format, as prescribed by the department. 15
1021	1021	(b) The department may collect a reasonable fee for the purpose of administering the 16
1022	1022	registration process. 17
1023	1023	SECTION 7. Section 27-29-13 of the General Laws in Chapter 27-29 entitled "Unfair 18
1024	1024	Competition and Practices" is hereby amended to read as follows: 19
1025	1025	27-29-13. Payment of premium — Cancellation. 20
1026	1026	Notwithstanding the provisions of chapter 40 of this title 14.6 of title 19, private passenger 21
1027	1027	motor vehicle insurance policyholders on either six (6) month or twelve (12) month policies shall 22
1028	1028	have the option of paying any policy premiums in installment payments; provided that for a twelve 23
1029	1029	(12) month policy the insurer may require a payment of fifteen percent (15%) of the annual 24
1030	1030	premium at time of issuance with the balance to be paid thereafter in nine (9) subsequent and equal 25
1031	1031	monthly installments thereafter for a six (6) month policy, the insurer may require a payment of 26
1032	1032	thirty-five percent (35%) of the premium at time of issuance with the balance to be paid in three 27
1033	1033	(3) subsequent and equal monthly installments thereafter. The insurer may levy a service charge of 28
1034	1034	up to five dollars ($5.00) per installment period against those policyholders who choose the 29
1035	1035	installment option. An insurer may levy and collect a maximum fee or charge of ten dollars ($10.00) 30
1036	1036	for any late payment of premium by a policyholder. A late fee may not be imposed unless payment 31
1037	1037	is received more than five (5) business days following the date payment is due. Policyholders shall 32
1038	1038	be entitled to receive no less than thirty (30) days notice before a cancellation of an automobile 33
1039	1039	insurance policy for any reason except nonpayment of premium, in which instance policyholders 34
1040	1040
1041	1041
1042	1042	LC002603 - Page 29 of 137
1043	1043	shall be entitled to receive no less than ten (10) days notice. 1
1044	1044	SECTION 8. Sections 27-29.1-1 and 27-29.1-6 of the General Laws in Chapter 27-29.1 2
1045	1045	entitled "Pharmacy Freedom of Choice — Fair Competition and Practices" are hereby amended to 3
1046	1046	read as follows: 4
1047	1047	27-29.1-1. Definitions. 5
1048	1048	For purposes of this chapter, the following terms shall mean: 6
1049	1049	(1) “Director” shall mean the director of the department of business regulation. 7
1050	1050	(2) “Eligible bidder” shall mean a retail pharmacy, community pharmacy or pharmacy 8
1051	1051	department registered pursuant to chapter 19 of title 5 19.1 of title 5, irrespective of corporate 9
1052	1052	structure or number of locations at which it conducts business, located within the geographical 10
1053	1053	service area of a carrier and willing to bid for participation in a restricted pharmacy network 11
1054	1054	contract. 12
1055	1055	(3) “Insurer” shall mean an insurance carrier as defined in chapters 18, 19, 20 and 41 of 13
1056	1056	title 27. 14
1057	1057	(4) “Insured” shall mean any person who is entitled to have pharmacy services paid by an 15
1058	1058	insurer pursuant to a policy, certificate, contract or agreement of insurance or coverage. 16
1059	1059	(5) “Non-restricted pharmacy network” shall mean a network that permits any pharmacy 17
1060	1060	to participate on substantially uniform terms and conditions established by an insurer or pharmacy 18
1061	1061	benefits manager. 19
1062	1062	(6) “Pharmacy benefits manager” shall mean any person or entity that is not licensed in 20
1063	1063	Rhode Island as an insurer and that develops or manages pharmacy benefits, pharmacy network 21
1064	1064	contracts, or the pharmacy benefit bid process. 22
1065	1065	(7) “Restricted pharmacy network” shall mean an arrangement for the provision of 23
1066	1066	pharmaceutical drug services to insureds which under the terms of an insurer’s policy, certificate, 24
1067	1067	contract or agreement of insurance or coverage requires an insured or creates a financial incentive 25
1068	1068	for an insured to obtain prescription drug services from one or more participating pharmacies that 26
1069	1069	have entered into a specific contractual relationship with the carrier. 27
1070	1070	27-29.1-6. Applicability and allowances. 28
1071	1071	(a) Nothing in this section chapter shall preclude an insurer from entering into an 29
1072	1072	agreement to allow non-network providers, other than independent community pharmacies, the 30
1073	1073	ability to participate with the insurer’s plans under terms and conditions set forth by the insurer. 31
1074	1074	(b) The provisions of this chapter shall not apply to arrangements for the provision of 32
1075	1075	pharmaceutical drug benefits to insureds between an insurer or a pharmacy benefits manager, and 33
1076	1076	a mail order pharmacy, or a hospital-based pharmacy which is not a retail pharmacy. 34
1077	1077
1078	1078
1079	1079	LC002603 - Page 30 of 137
1080	1080	(c) Nothing in this section chapter shall be construed to require the provision of pharmacy 1
1081	1081	benefits to insureds through a restricted pharmacy network nor any other arrangement for the 2
1082	1082	provision of prescription drug benefits. 3
1083	1083	SECTION 9. Sections 27-30-5 and 27-30-6 of the General Laws in Chapter 27-30 entitled 4
1084	1084	"Consumer Credit Insurance" are hereby amended to read as follows: 5
1085	1085	27-30-5. Term of consumer credit insurance. 6
1086	1086	(a) Effective date of coverage. 7
1087	1087	(1) For consumer credit insurance made available to and elected by the debtor before or 8
1088	1088	contemporaneous with a credit transaction to which the insurance relates, the term of insurance 9
1089	1089	shall, subject to acceptance by the insurer, commence on the date when the debtor becomes 10
1090	1090	obligated to the creditor, except that, when evidence of individual insurability is required and such 11
1091	1091	evidence is furnished more than thirty (30) days after the date when the debtor becomes obligated 12
1092	1092	to the creditor, the term of the credit insurance may commence on the date on which the insurance 13
1093	1093	company determines the evidence to be satisfactory. 14
1094	1094	(2) For insurance coverage made available to and elected by the debtor on a date subsequent 15
1095	1095	to the date of the consumer credit transaction to which the insurance relates, the insurance shall, 16
1096	1096	subject to acceptance by the insurer, commence on a date not earlier that than the date the election 17
1097	1097	is made by the debtor nor later than thirty (30) days following the date on which the insurance 18
1098	1098	company accepts the risk for coverage, according to an objective method such as one related to a 19
1099	1099	particular date within the billing or repayment cycle or a calendar month. 20
1100	1100	(3) Notwithstanding the provisions of subdivisions (1) and (2) of this subsection, when a 21
1101	1101	group policy provides coverage with respect to debts existing on the policy effective date, the 22
1102	1102	insurance relating to the debt shall not commence before the effective date of the group policy. 23
1103	1103	(4) In no event shall a charge for insurance be made to the debtor and retained by the 24
1104	1104	creditor or insurer for any time prior to commencement of the consumer credit insurance to which 25
1105	1105	the charge is related. 26
1106	1106	(b) Termination date of coverage. 27
1107	1107	(1) The term of any consumer credit insurance shall not extend beyond the termination date 28
1108	1108	specified in the policy. The termination date of insurance may precede, coincide with or follow the 29
1109	1109	scheduled maturity date of the debt to which it relates, subject to any other requirements and 30
1110	1110	restrictions of this chapter. 31
1111	1111	(2) The term of any consumer credit insurance shall not extend more than fifteen (15) days 32
1112	1112	beyond the scheduled maturity date of the debt except when extended without additional cost to 33
1113	1113	the debtor or except when extended pursuant to a written agreement, signed by the debtor, in 34
1114	1114
1115	1115
1116	1116	LC002603 - Page 31 of 137
1117	1117	connection with a variable interest rate credit transaction or a deferral, renewal, refinancing or 1
1118	1118	consolidation of debt. 2
1119	1119	(3) If the debt is discharged due to renewal, financing or consolidation prior to the 3
1120	1120	scheduled termination date of insurance, any insurance in force shall be terminated before any new 4
1121	1121	insurance may be written in connection with the renewed, refinanced or consolidated debt. 5
1122	1122	(4) In all cases of termination of insurance prior to the scheduled termination of the 6
1123	1123	insurance, an appropriate refund or credit to the debtor shall be made of any unearned insurance 7
1124	1124	charge paid by the debtor for a term of insurance after the date of the termination, except that no 8
1125	1125	refund is required of a charge made for insurance if the insurance is terminated by performance of 9
1126	1126	the insurer’s obligation with respect to insurance. 10
1127	1127	(5) An insured debtor may terminate consumer credit insurance at any time by providing 11
1128	1128	advance request to the insurer. The individual policy or group certificate may require that the 12
1129	1129	request be in writing or that the debtor surrender the individual policy or group certificate, or both. 13
1130	1130	The debtor’s right to terminate coverage may also be subject to the terms of the credit transaction 14
1131	1131	contract. 15
1132	1132	27-30-6. Disclosure to debtors and provisions of policies and certificates of insurance. 16
1133	1133	(a) Pre-purchase disclosure. Before the debtor elects to purchase consumer credit insurance 17
1134	1134	in connection with a credit transaction, the following shall be disclosed to the debtor in writing: 18
1135	1135	(1) That the purchase of consumer credit insurance is optional and not a condition of 19
1136	1136	obtaining credit approval; 20
1137	1137	(2) If more than one kind of consumer credit insurance is being made available to the 21
1138	1138	debtor, whether the debtor can purchase each kind separately or the multiple coverages only as a 22
1139	1139	package; 23
1140	1140	(3) The conditions of eligibility; 24
1141	1141	(4) That, if the consumer has another insurance that covers the risk, he or she may not want 25
1142	1142	or need credit insurance; 26
1143	1143	(5) That within the first thirty (30) days after receiving the individual policy or group 27
1144	1144	certificate, the debtor may cancel the coverage and have all premium paid by the debtor refunded 28
1145	1145	or credited. Thereafter, the debtor may cancel the policy at any time during the term of the loan and 29
1146	1146	receive a refund of any unearned premium. However, only in those instances where insurance is a 30
1147	1147	requirement for the extension of credit, the debtor may be required to offer evidence of alternative 31
1148	1148	insurance acceptable to the creditor at the time of cancellation; 32
1149	1149	(6) A brief description of the coverage, including a description of the amount, the term, 33
1150	1150	any exception, limitations and exclusions, the insured event, any waiting or elimination period, any 34
1151	1151
1152	1152
1153	1153	LC002603 - Page 32 of 137
1154	1154	deductible, any applicable waiver of premium provision, to whom the benefits would be paid and 1
1155	1155	the premium rate for each coverage or for all coverages in a package; 2
1156	1156	(7) That if the premium or insurance charge is financed, it will be subject to finance charges 3
1157	1157	at the rate applicable to the credit transaction. 4
1158	1158	(b) The disclosures required in subsection (a) above shall be provided in the following 5
1159	1159	manner: 6
1160	1160	(1) In connection with the consumer credit insurance offered contemporaneously with the 7
1161	1161	extension of credit or offered through direct mail advertisements, disclosure shall be made in 8
1162	1162	writing and presented to the consumer in a clear and conspicuous manner; 9
1163	1163	(2) In conjunction with the offer of credit insurance subsequent to the extension of credit 10
1164	1164	by other than direct mail advertisements, disclosure may be provided orally so long as written 11
1165	1165	disclosures are provided to the debtor no later than the earlier of: 12
1166	1166	(i) Ten (10) days after the offer; or 13
1167	1167	(ii) The date any other written material is provided to the debtor. 14
1168	1168	(c) All consumer credit insurance sold shall be evidenced by an individual policy, or a 15
1169	1169	group certificate of insurance which shall be delivered to the debtor. 16
1170	1170	(d) The individual policy or group certificate shall, in addition to other requirements of 17
1171	1171	law, set forth the following: 18
1172	1172	(1) The name and home office address of the insurer; 19
1173	1173	(2) The name or names of the debtor or debtors, or, in the case of a group certificate, the 20
1174	1174	identity by name or otherwise of the debtor or debtors; 21
1175	1175	(3) The premium or amount of payment by the debtor separately for each kind of coverage 22
1176	1176	or for all coverages in a package, except that for open-end loans, the premium rate and the basis of 23
1177	1177	premium calculation (e.g. average daily balance, prior monthly balance) shall be specified; 24
1178	1178	(4) A full description of the coverage or coverages, including the amount and term thereof, 25
1179	1179	and any exceptions, limitations and exclusions; 26
1180	1180	(5) A statement that the benefits shall be paid to the creditor to reduce or extinguish the 27
1181	1181	unpaid debt and, whenever the amount of insurance benefit exceeds the unpaid debt that any such 28
1182	1182	excess shall be payable to a beneficiary, other than the creditor, named by the debtor, or to the 29
1183	1183	debtor’s estate; and 30
1184	1184	(6) If the scheduled term of insurance is less than the scheduled term of the credit 31
1185	1185	transaction, a statement to that effect on the face of the individual policy or group certificate in not 32
1186	1186	less than ten (10) point bold face type. 33
1187	1187	(e) Unless the individual policy or group certificate of insurance is delivered to the debtor 34
1188	1188
1189	1189
1190	1190	LC002603 - Page 33 of 137
1191	1191	at the time the debt is incurred, or at such other time that the debtor elects to purchase coverage, a 1
1192	1192	copy of the application for the policy or a notice of proposed insurance, signed by the debtor and 2
1193	1193	setting forth the name and home office address of the insurer, the name or names of the debtor, the 3
1194	1194	premium rate or amount of payment by the debtor for the insurance and the amount, term and a 4
1195	1195	brief description of the coverage provided, shall be delivered to the debtor at the time the debt is 5
1196	1196	incurred or the election to purchase coverage is made. The copy of the application for or notice of 6
1197	1197	proposed insurance shall also refer exclusively to insurance coverage, and shall be separate and 7
1198	1198	apart from the loan, sale or other credit statement of account, instrument or agreement, unless the 8
1199	1199	information required by this subsection is prominently set forth therein. Upon acceptance of the 9
1200	1200	insurance by the insurer and within thirty (30) days of the date upon which the debt is incurred or 10
1201	1201	the election to purchase coverage is made, the insurer shall cause the individual policy or group 11
1202	1202	certificate of insurance to be delivered to the debtor. The application or notice of proposed 12
1203	1203	insurance shall state that upon acceptance by the insurer, the insurance shall become effective as 13
1204	1204	provided in § 27-30-5. 14
1205	1205	(f) The application, notice of proposed insurance or certificate may be used to fulfill all of 15
1206	1206	the requirements of subsections (a) and (d) if it contains all the information required by those 16
1207	1207	subsections. 17
1208	1208	(g) The debtor has thirty (30) days from the date that he or she receives either the individual 18
1209	1209	policy or the group certificate to review the coverage purchased. At any time within the thirty (30) 19
1210	1210	day period, the debtor may contact the creditor or insurer issuing the policy or certificate and 20
1211	1211	request that the coverage be cancelled. The individual policy or group certificate may require the 21
1212	1212	request to be in writing or that the policy or certificate be returned to the insurer or both. The debtor 22
1213	1213	shall, within thirty (30) days of the request, receive a full refund or credit of all premiums or 23
1214	1214	insurance charges paid by the debtor. 24
1215	1215	(h) If the named insurer does not accept the risk, the debtor shall receive a policy or 25
1216	1216	certificate of insurance setting forth the name and home office address of the substituted insurer 26
1217	1217	and the amount of the premium to be charged, and, if the amount of premium is less than that set 27
1218	1218	forth in the notice of proposed insurance, an appropriate refund shall be made within thirty (30) 28
1219	1219	days. In If no insurer accepts the risk, then all premiums paid shall be refunded or credited within 29
1220	1220	thirty (30) days of application to the person entitled thereto. 30
1221	1221	(i) For the purpose of subsection (e) of this section, an individual policy or group certificate 31
1222	1222	delivered in conjunction with an open-end consumer credit agreement or any consumer credit 32
1223	1223	insurance requested by the debtor after the date of the debt shall be deemed to be delivered at the 33
1224	1224	time the debt is incurred or election to purchase coverage is made if the delivery occurs within 34
1225	1225
1226	1226
1227	1227	LC002603 - Page 34 of 137
1228	1228	thirty (30) days of the date the insurance is effective. 1
1229	1229	(j) An individual policy or group certificate delivered in conjunction with an open-end 2
1230	1230	credit agreement shall continue from its effective date through the term of the agreement unless the 3
1231	1231	individual policy or group certificate is terminated in accordance with its terms at an earlier date. 4
1232	1232	SECTION 10. Section 27-34-5 of the General Laws in Chapter 27-34 entitled "Rhode 5
1233	1233	Island Property and Casualty Insurance Guaranty Association" is hereby amended to read as 6
1234	1234	follows: 7
1235	1235	27-34-5. Definitions. 8
1236	1236	As used in this chapter: 9
1237	1237	(1) “Account” means any one of the three (3) accounts created by § 27-34-6; 10
1238	1238	(2) “Affiliate” means a person, who directly or indirectly, through one or more 11
1239	1239	intermediaries, controls, is controlled by, or is under common control with another on December 12
1240	1240	31 of the year immediately preceding the date the insurer becomes an insolvent insurer; 13
1241	1241	(3) “Association” means the Rhode Island insurance guaranty association created under § 14
1242	1242	27-34-6. 15
1243	1243	(4) “Association similar to the association” means any guaranty association, security fund 16
1244	1244	or other insolvency mechanism that affords protection similar to that of the association. The term 17
1245	1245	shall also include any property and casualty insolvency mechanism that obtains assessments or 18
1246	1246	other contributions from insurers on a pre-insolvency basis. 19
1247	1247	(5) “Assumed claims transaction” means the following: 20
1248	1248	(i) Policy obligations that have been assumed by the insolvent insurer, prior to the entry of 21
1249	1249	a final order of liquidation, through a merger between the insolvent insurer and another entity 22
1250	1250	obligated under the policies, and for which assumption consideration has been paid to the applicable 23
1251	1251	guaranty associations, if the merged entity is a non-member insurer; 24
1252	1252	(ii) Policy obligations that have been assumed by the insolvent insurer, prior to the entry 25
1253	1253	of a final order of liquidation, pursuant to a plan, approved by the domestic commissioner of the 26
1254	1254	assuming insurer, which: 27
1255	1255	(A) Transfers the direct policy obligations and future policy renewals from one insurer to 28
1256	1256	another insurer; and 29
1257	1257	(B) For which assumption consideration has been paid to the applicable guaranty 30
1258	1258	associations, if the assumption is from a non-member insurer. 31
1259	1259	(C) For purposes of this section the term non-member insurer also includes a self-insurer, 32
1260	1260	non-admitted insurer and risk retention group; or 33
1261	1261	(iii) An assumption reinsurance transaction in which all of the following has occurred: 34
1262	1262
1263	1263
1264	1264	LC002603 - Page 35 of 137
1265	1265	(A) The insolvent insurer assumed, prior to the entry of a final order of liquidation, the 1
1266	1266	claim or policy obligations of another insurer or entity obligated under the claims or policies; 2
1267	1267	(B) The assumption of the claim or policy obligations has been approved, if such approval 3
1268	1268	is required, by the appropriate regulatory authorities; and 4
1269	1269	(C) As a result of the assumption, the claim or policy obligations became the direct 5
1270	1270	obligations of the insolvent insurer through a novation of the claims or policies. 6
1271	1271	(6) “Assumption consideration” shall mean the consideration received by a guaranty 7
1272	1272	association to extend coverage to the policies assumed by a member insurer from a non-member 8
1273	1273	insurer in any assumed claims transaction including liabilities that may have arisen prior to the date 9
1274	1274	of the transaction. The assumption consideration shall be in an amount equal to the amount that 10
1275	1275	would have been paid by the assuming insurer during the three (3) calendar years prior to the 11
1276	1276	effective date of the transaction to the applicable guaranty associations if the business had been 12
1277	1277	written directly by the assuming insurer. 13
1278	1278	(i) In the event that the amount of the premiums for the three (3) year period cannot be 14
1279	1279	determined, the assumption consideration will be determined by multiplying one hundred thirty 15
1280	1280	percent (130%) against the sum of the unpaid losses, loss adjustment expenses, and incurred but 16
1281	1281	not reported losses, as of the effective date of the assumed claims transaction, and then multiplying 17
1282	1282	such sum times the applicable guaranty association assessment percentage for the calendar year of 18
1283	1283	the transaction. 19
1284	1284	(ii) The funds paid to a guaranty association shall be allocated in the same manner as any 20
1285	1285	assessments made during the three (3) year period. The guaranty association receiving the 21
1286	1286	assumption consideration shall not be required to recalculate or adjust any assessments levied 22
1287	1287	during the prior three (3) calendar years as a result of receiving the assumption consideration. 23
1288	1288	Assumption consideration paid by an insurer may be recouped in the same manner as other 24
1289	1289	assessments made by a guaranty association. 25
1290	1290	(7) “Claimant” means any person instituting a covered claim; provided that no person who 26
1291	1291	is an affiliate of the insolvent insurer may be a claimant; 27
1292	1292	(8) “Commissioner” means the director of the department of business regulation or his or 28
1293	1293	her designee; 29
1294	1294	(9) “Control” means the possession, direct or indirect, of the power to direct or cause the 30
1295	1295	direction of the management and policies of a person, whether through the ownership of voting 31
1296	1296	securities, by contract other than a commercial contract for goods or nonmanagement services, or 32
1297	1297	otherwise, unless the power is the result of an official position with, or corporate office held by, the 33
1298	1298	person. Control shall be presumed to exist if any person, directly or indirectly, owns, controls, holds 34
1299	1299
1300	1300
1301	1301	LC002603 - Page 36 of 137
1302	1302	with the power to vote, or holds proxies representing, ten percent (10%) or more of the voting 1
1303	1303	securities of any other person. This presumption may be rebutted by a showing that control does 2
1304	1304	not exist in fact; 3
1305	1305	(10) “Covered claim” means: 4
1306	1306	(i) An unpaid claim, including one for unearned premiums, submitted by a claimant, which 5
1307	1307	arises out of and is within the coverage and subject to the applicable limits of an insurance policy 6
1308	1308	to which this chapter applies if the insurer becomes an insolvent insurer after the effective date of 7
1309	1309	this chapter and the policy was either issued by the insurer or assumed by the insurer in an assumed 8
1310	1310	claims transaction, and: 9
1311	1311	(A) The claimant or insured is a resident of this state at the time of the insured event; 10
1312	1312	provided, that for entities other than an individual, the residence of a claimant, insured or 11
1313	1313	policyholder is the state in which its principal place of business is located at the time of the insured 12
1314	1314	event; or 13
1315	1315	(B) The claim is a first-party claim for damage to property with a permanent location in 14
1316	1316	this state. 15
1317	1317	(ii) Except as provided elsewhere in this section, “covered claim” shall not include: 16
1318	1318	(A) Any amount awarded as punitive or exemplary damages; 17
1319	1319	(B) Any amount sought as a return of premium under any retrospective rating plan; or 18
1320	1320	(C) Any amount due any reinsurer, insurer, insurance pool, or underwriting association, 19
1321	1321	health maintenance organization, hospital plan corporation, professional health service corporation 20
1322	1322	or self-insurer as subrogation recoveries, reinsurance recoveries, contribution, indemnification or 21
1323	1323	otherwise. No claim for any amount due any reinsurer, insurer, insurance pool, underwriting 22
1324	1324	association, health maintenance organization, hospital plan corporation, professional health service 23
1325	1325	corporation or self-insurer may be asserted against a person insured under a policy issued by an 24
1326	1326	insolvent insurer other than to the extent the claim exceeds the association obligation limitations 25
1327	1327	set forth in § 27-34-8; 26
1328	1328	(D) Any claims excluded pursuant to § 27-34-11.5 due to the high net worth of an insured; 27
1329	1329	(E) Any first party claims by an insured that is an affiliate of the insolvent insurer; 28
1330	1330	(F) Any fee or other amount relating to goods or services sought by or on behalf of any 29
1331	1331	attorney or other provider of goods or services retained by the insolvent insurer or an insured prior 30
1332	1332	to the date it was determined to be insolvent; 31
1333	1333	(G) Any fee or other amount sought by or on behalf of any attorney or other provider of 32
1334	1334	goods or services retained by any insured or claimant in connection with the assertion or 33
1335	1335	prosecution of any claim, covered or otherwise, against the association; 34
1336	1336
1337	1337
1338	1338	LC002603 - Page 37 of 137
1339	1339	(H) Any claims for interest; or 1
1340	1340	(I) Any claim filed with the association or a liquidator for protection afforded under the 2
1341	1341	insured’s policy for incurred-but-not-reported losses. 3
1342	1342	(11) “Insolvent insurer” means an insurer licensed to transact insurance in this state either 4
1343	1343	at the time the policy was issued; when the obligation with respect to the covered claim was 5
1344	1344	assumed under an assumed claims transaction; or when the insured event occurred, and against 6
1345	1345	whom a final order of liquidation has been entered after the effective date of this chapter with a 7
1346	1346	finding of insolvency by a court of competent jurisdiction in the insurer’s state of domicile; 8
1347	1347	(12) “Insured” means any named insured, any additional insured, any vendor, lessor or any 9
1348	1348	other party identified as an insured under the policy. 10
1349	1349	(13) “Line of credit” means an irrevocable stand-by commitment whereby the association 11
1350	1350	or member insurer and a qualified financial institution or group of qualified financial institutions 12
1351	1351	enter into a formal and binding contract in which the qualified financial institution or group of 13
1352	1352	qualified financial institutions agree to lend a certain amount of money within a stated period of 14
1353	1353	time. 15
1354	1354	(14)(a)(i) “Member insurer” means any person who: 16
1355	1355	(i)(A) Writes any kind of insurance to which this chapter applies, under § 27-34-3, 17
1356	1356	including the exchange of reciprocal or interinsurance contracts; 18
1357	1357	(ii)(B) Is licensed to transact insurance in this state; and 19
1358	1358	(C) Is not otherwise excepted from membership by statute or regulation. 20
1359	1359	(b)(ii) An insurer shall cease to be a member insurer effective on the day following the 21
1360	1360	termination or expiration of its license to transact the kinds of insurance to which this chapter 22
1361	1361	applies, however, the insurer shall remain liable as a member insurer for any and all obligations, 23
1362	1362	including obligations for assessments levied prior to the termination or expiration of the insurer’s 24
1363	1363	license and assessment levied after the termination or expiration, which relate to any insurer that 25
1364	1364	became an insolvent insurer prior to the termination or expiration of the insurer’s license. 26
1365	1365	(iii) Is not otherwise excepted from membership by statute or regulation. 27
1366	1366	(15) “Net direct written premiums” means direct gross premiums written in this state on 28
1367	1367	insurance policies to which this chapter applies, including policy and membership fees, less the 29
1368	1368	following amounts: (i) Return premiums, (ii) Premiums on policies not taken and (iii) Dividends 30
1369	1369	paid or credited to policyholders on that direct business. “Net direct written premiums” does not 31
1370	1370	include premiums on contracts between insurers or reinsurers; 32
1371	1371	(16) “Novation” means that the assumed claim or policy obligations became the direct 33
1372	1372	obligations of the insolvent insurer through consent of the policyholder and that thereafter the 34
1373	1373
1374	1374
1375	1375	LC002603 - Page 38 of 137
1376	1376	ceding insurer or entity initially obligated under the claims or policies is released by the 1
1377	1377	policyholder from performing its claim or policy obligations. Consent may be express or implied 2
1378	1378	based upon the circumstances, notice provided and conduct of the parties. 3
1379	1379	(17) “Ocean marine insurance” means any form of insurance, regardless of the name, label 4
1380	1380	or marketing designation of the insurance policy, which insures against maritime perils or risks and 5
1381	1381	other related perils or risks, which are usually insured against by traditional marine insurance, such 6
1382	1382	as hull and machinery, marine builders risk, and marine protection and indemnity. Perils and risk 7
1383	1383	insured against include without limitation loss, damage, expense or legal liability of the insured for 8
1384	1384	loss, damage or expense arising out of or incident to ownership, operation, chartering, maintenance, 9
1385	1385	use, repair or construction of any vessel, craft or instrumentality in use in ocean or inland waterways 10
1386	1386	for commercial purposes, including liability of the insured for personal injury, injury, illness or 11
1387	1387	death or for loss or damage to the property of the insured or another person. 12
1388	1388	(18) “Person” means any individual, aggregation of individuals, corporation, partnership, 13
1389	1389	or other entity; 14
1390	1390	(19) “Qualified financial institution” shall have the same meaning as the term in § 27-1.1-15
1391	1391	3. 16
1392	1392	(20) “Receiver” means liquidator, rehabilitator, conservator or ancillary receiver, as the 17
1393	1393	context requires. 18
1394	1394	(21) “Self-insurer” means a person that covers its liability through a qualified individual or 19
1395	1395	group self-insurance program or any other formal program created for the specific purpose of 20
1396	1396	covering liabilities typically covered by insurance. 21
1397	1397	(22) “Self-insured retention” means: 22
1398	1398	(i) Any fund or other arrangement to pay claims other than by an insurance company; or 23
1399	1399	(ii) Any arrangement under which an insurance company has no obligation to pay claims 24
1400	1400	on behalf of an insured if it is not reimbursed by the insured. 25
1401	1401	SECTION 11. Sections 27-34.2-2, 27-34.2-6 and 27-34.2-21 of the General Laws in 26
1402	1402	Chapter 27-34.2 entitled "Long Term Care Insurance" are hereby amended to read as follows: 27
1403	1403	27-34.2-2. Scope. 28
1404	1404	Long term care insurance is deemed to be accident and health insurance and is classified 29
1405	1405	as such for the purposes of chapter 34.1 34.3 of this title, the Rhode Island Life and Health 30
1406	1406	Insurance Guaranty Association Act. The requirements of this chapter apply to policies delivered 31
1407	1407	or issued for delivery in this state, except as provided in § 27-34.2-5. This chapter is not intended 32
1408	1408	to supercede the obligations of entities subject to this chapter to comply with the substance of other 33
1409	1409	applicable insurance laws insofar as they do not conflict with this chapter. The benefits required 34
1410	1410
1411	1411
1412	1412	LC002603 - Page 39 of 137
1413	1413	for long term care insurance shall only be the benefits specified in this chapter and in regulations 1
1414	1414	promulgated under § 27-34.2-16. 2
1415	1415	27-34.2-6. Disclosure and performance standards for long-term-care insurance. 3
1416	1416	(a) The director may adopt regulations that establish: 4
1417	1417	(1) Standards for full and fair disclosure setting forth the manner, content, and required 5
1418	1418	disclosures for the sale of long-term-care insurance policies, terms of renewability, initial and 6
1419	1419	subsequent conditions of eligibility, nonduplication of coverage provisions, coverage of 7
1420	1420	dependents, preexisting conditions, termination of insurance, continuation or conversion, 8
1421	1421	probationary periods, limitations, exceptions, reductions, elimination periods, requirements for 9
1422	1422	replacement, recurrent conditions, and definitions of terms; and 10
1423	1423	(2) Reasonable rules and regulations that are necessary, proper, or advisable to the 11
1424	1424	administration of this chapter including the procedure for the filing or submission of policies 12
1425	1425	subject to this chapter. This provision may not abridge any other authority granted the director by 13
1426	1426	law. 14
1427	1427	(b) No long-term-care insurance policy may: 15
1428	1428	(1) Be cancelled, nonrenewed, or terminated on the grounds of the age or the deterioration 16
1429	1429	of the mental or physical health of the insured individual or certificate holder; or 17
1430	1430	(2) Contain a provision establishing a new waiting period in the event existing coverage is 18
1431	1431	converted to or replaced by a new or other form within the same company, except with respect to 19
1432	1432	an increase in benefits voluntarily selected by the insured individual or group policyholder; or 20
1433	1433	(3) Provide coverage for skilled nursing care only or provide more coverage for skilled 21
1434	1434	care in a facility than coverage for lower levels of care. 22
1435	1435	(c) A long-term-care policy must provide: 23
1436	1436	(1) Home healthcare benefits that are at least fifty percent (50%) of those provided for care 24
1437	1437	in a nursing facility. The evaluation of the amount of coverage shall be based on aggregate days of 25
1438	1438	care covered for home health care when compared to days of care covered for nursing home care; 26
1439	1439	and 27
1440	1440	(2) Home healthcare benefits that meet the National Association of Insurance 28
1441	1441	Commissioners’ minimum standards for home healthcare benefits in long-term-care insurance 29
1442	1442	policies. 30
1443	1443	(d)(1) No long-term-care insurance policy or certificate other than a policy or certificate 31
1444	1444	issued to a group as defined in § 27-34.2-4(4)(i) shall use a definition of “preexisting condition” 32
1445	1445	which is more restrictive than the following: “preexisting condition” means a condition for which 33
1446	1446	medical advice or treatment was recommended by, or received from a provider of healthcare 34
1447	1447
1448	1448
1449	1449	LC002603 - Page 40 of 137
1450	1450	services, within six (6) months preceding the effective date of coverage of an insured person; 1
1451	1451	(2) No long-term-care insurance policy or certificate other than a policy or certificate issued 2
1452	1452	to a group as defined in § 27-34.2-4(4)(i) may exclude coverage for a loss or confinement that is 3
1453	1453	the result of a preexisting condition, unless the loss or confinement begins within six (6) months 4
1454	1454	following the effective date of coverage of an insured person; 5
1455	1455	(3) The director may extend the limitation periods set forth in subsections (d)(1) and (d)(2) 6
1456	1456	of this section as to specific age group categories in specific policy forms upon findings that the 7
1457	1457	extension is in the best interest of the public; 8
1458	1458	(4) The definition of “preexisting condition” does not prohibit an insurer from using an 9
1459	1459	application form designed to elicit the complete health history of an applicant, and, on the basis of 10
1460	1460	the answers on that application, from underwriting in accordance with that insurer’s established 11
1461	1461	underwriting standards. Unless otherwise provided in the policy or certificate, a preexisting 12
1462	1462	condition, regardless of whether it is disclosed on the application, need not be covered until the 13
1463	1463	waiting period described in subsection (d)(2) of this section expires. No long-term-care insurance 14
1464	1464	policy or certificate may exclude or use waivers or riders of any kind to exclude, limit or reduce 15
1465	1465	coverage or benefits for specifically named or described preexisting diseases or physical conditions 16
1466	1466	beyond the waiting period described in subsection (d)(2) of this section, unless the waiver or rider 17
1467	1467	has been specifically approved by the director as set forth in § 27-34.2-8. This shall not permit 18
1468	1468	exclusion or limitation of benefits on the basis of Alzheimer’s disease, other dementias, or organic 19
1469	1469	brain disorders. 20
1470	1470	(e)(1) No long-term-care insurance policy may be delivered or issued for delivery in this 21
1471	1471	state if the policy: 22
1472	1472	(i) Conditions eligibility for any benefits on a prior hospitalization or institutionalization 23
1473	1473	requirement; 24
1474	1474	(ii) Conditions eligibility for benefits provided in an institutional care setting on the receipt 25
1475	1475	of a higher level of institutional care; or 26
1476	1476	(iii) Conditions eligibility for any benefits other than waiver of premium, post-27
1477	1477	confinement, post-acute care, or recuperative benefits on a prior institutionalization requirement. 28
1478	1478	(2) A long-term-care insurance policy or rider shall not condition eligibility for non-29
1479	1479	institutional benefits on the prior or continuing receipt of skilled care services. 30
1480	1480	(3) No long-term-care insurance policy or rider that provides benefits only following 31
1481	1481	institutionalization shall condition such benefits upon admission to a facility for the same or related 32
1482	1482	conditions within a period of less than thirty (30) days after discharge from the institution. 33
1483	1483	(f) The commissioner may adopt regulations establishing loss ratio standards for long-term-34
1484	1484
1485	1485
1486	1486	LC002603 - Page 41 of 137
1487	1487	care insurance policies provided that a specific reference to long-term-care insurance policies is 1
1488	1488	contained in the regulation. 2
1489	1489	(g)(1) Long-term-care insurance applicants shall have the right to return the policy, 3
1490	1490	certificate, or rider to the company or an agent/insurance producer of the company within thirty 4
1491	1491	(30) days of its receipt and to have the premium refunded if, after examination of the policy, 5
1492	1492	certificate, or rider, the applicant is not satisfied for any reason. 6
1493	1493	(2) Long-term-care insurance policies, certificates, and riders shall have a notice 7
1494	1494	prominently printed on the first page or attached thereto including specific instructions to 8
1495	1495	accomplish a return. This requirement shall not apply to certificates issued pursuant to a policy 9
1496	1496	issued to a group defined in § 27-34.2-4. The following free look statement or language 10
1497	1497	substantially similar shall be included: 11
1498	1498	“You have thirty (30) days from the day you receive this policy, certificate, or rider to 12
1499	1499	review it and return it to the company if you decide not to keep it. You do not have to tell the 13
1500	1500	company why you are returning it. If you decide not to keep it, simply return it to the company at 14
1501	1501	its administration office. Or you may return it to the agent/insurance producer that you bought it 15
1502	1502	from. You must return it within thirty (30) days of the day you first received it. The company will 16
1503	1503	refund the full amount of any premium paid within thirty (30) days after it receives the returned 17
1504	1504	policy, certificate, or rider. The premium refund will be sent directly to the person who paid it. The 18
1505	1505	returned policy, certificate, or rider will be void as if it had never been issued.” 19
1506	1506	(h)(1) An outline of coverage shall be delivered to a prospective applicant for long-term-20
1507	1507	care insurance at the time of initial solicitation through means that prominently direct the attention 21
1508	1508	of the recipient to the document and its purpose; 22
1509	1509	(2) The commissioner shall prescribe a standard format, including style, arrangement, and 23
1510	1510	overall appearance, and the content of an outline of coverage; 24
1511	1511	(3) In the case of insurance producer solicitations, an insurance producer must deliver the 25
1512	1512	outline of coverage prior to the presentation of an application or enrollment form; 26
1513	1513	(4) In the case of direct response solicitations, the outline of coverage must be presented in 27
1514	1514	conjunction with any application or enrollment form; 28
1515	1515	(5) In the case of a policy issued to a group defined in § 27-34.2-4(4)(i), an outline of 29
1516	1516	coverage shall not be required to be delivered, provided that the information described in 30
1517	1517	subsections (h)(6)(i) — (h)(6)(vi) of this section is contained in other materials relating to 31
1518	1518	enrollment. Upon request, these other materials shall be made available to the commissioner; 32
1519	1519	(6) The outline of coverage shall include: 33
1520	1520	(i) A description of the principal benefits and coverage provided in the policy; 34
1521	1521
1522	1522
1523	1523	LC002603 - Page 42 of 137
1524	1524	(ii) A description of the eligibility triggers for benefits and how those triggers are met; 1
1525	1525	(iii) A statement of the principal exclusions, reductions, and limitations contained in the 2
1526	1526	policy; 3
1527	1527	(iv) A statement of the terms under which the policy or certificate, or both, may be 4
1528	1528	continued in force or discontinued, including any reservation in the policy of a right to change 5
1529	1529	premiums. Continuation or conversion provisions of group coverage shall be specifically described; 6
1530	1530	(v) A statement that the outline of coverage is only a summary, not a contract of insurance, 7
1531	1531	and that the policy or group master policy contains governing contractual provisions; 8
1532	1532	(vi) A description of the terms under which the policy or certificate may be returned and 9
1533	1533	the premium refunded; 10
1534	1534	(vii) A brief description of the relationship of cost of care and benefits; and 11
1535	1535	(viii) A statement that discloses to the policyholder or certificate holder whether the policy 12
1536	1536	is intended to be a federally tax-qualified long-term-care insurance contract under § 7702B(b) of 13
1537	1537	the Internal Revenue Code of 1986, as amended, et seq. 14
1538	1538	(i) A certificate issued pursuant to a group long-term-care insurance policy which policy is 15
1539	1539	delivered or issued for delivery in this state shall include: 16
1540	1540	(1) A description of the principal benefits and coverage provided in the policy; 17
1541	1541	(2) A statement of the principal exclusions, reductions, and limitations contained in the 18
1542	1542	policy; and 19
1543	1543	(3) A statement that the group master policy determines governing contractual provisions. 20
1544	1544	(j) If an application for a long-term-care insurance contract or certificate is approved, the 21
1545	1545	issuer shall deliver the contract or certificate of insurance to the applicant no later than thirty (30) 22
1546	1546	days after the date of approval. 23
1547	1547	(k) At the time of policy delivery, a policy summary shall be delivered for an individual 24
1548	1548	life insurance or annuity policy that provides long-term-care benefits within the policy or by rider. 25
1549	1549	In the case of direct response solicitations, the insurer shall deliver the policy summary upon the 26
1550	1550	applicant’s request, but regardless of request shall make the delivery no later than at the time of 27
1551	1551	policy delivery. In addition to complying with all applicable requirements, the summary shall also 28
1552	1552	include: 29
1553	1553	(1) An explanation of how the long-term-care benefit interacts with other components of 30
1554	1554	the policy; 31
1555	1555	(2) An illustration of the amount of benefits, the length of benefits, and the guaranteed 32
1556	1556	lifetime benefits, including a statement that any long-term-care inflation projection option required 33
1557	1557	by § 27-34.2-13, is not available under the policy for each covered person; 34
1558	1558
1559	1559
1560	1560	LC002603 - Page 43 of 137
1561	1561	(3) Any exclusions, reductions, and limitations on long-term-care benefits; 1
1562	1562	(4) A statement that any long-term-care inflation protection option required by 230-RICR-2
1563	1563	20-35-1 is not available under this policy. If inflation protection was not required to be offered, or 3
1564	1564	if inflation protection was required to be offered but was rejected, a statement that inflation 4
1565	1565	protection is not available under this policy that provides long-term-care benefits, and an 5
1566	1566	explanation of other options available under the policy, if any, to increase the funds available to 6
1567	1567	pay for the long-term-care benefits. 7
1568	1568	(5) If applicable to the policy type, the summary shall also include: 8
1569	1569	(i) A disclosure of the effects of exercising other rights under the policy; 9
1570	1570	(ii) A disclosure of guarantees, fees or other costs related to long-term-care costs of 10
1571	1571	insurance charges in the base policy and any riders; and 11
1572	1572	(iii) Current and projected periodic and maximum lifetime benefits. 12
1573	1573	(6) The provisions of the policy summary listed above may be incorporated into a basic 13
1574	1574	illustration or into the life insurance policy summary that is required to be delivered in accordance 14
1575	1575	with chapter 4 of this title and the rules and regulations promulgated under § 27-4-23. 15
1576	1576	(l) Any time a long-term benefit, funded through a life insurance vehicle by the acceleration 16
1577	1577	of the death benefit, is in benefit payment status, a monthly report shall be provided to the 17
1578	1578	policyholder. The report shall include: 18
1579	1579	(1) Any long-term-care benefits paid out during the month; 19
1580	1580	(2) Any costs or changes that apply or will apply to the policy or any riders; 20
1581	1581	(3) An explanation of any changes in the policy, e.g., death benefits or cash values, due to 21
1582	1582	long-term-care benefits being paid out; and 22
1583	1583	(4) The amount of long-term-care benefits existing or remaining. 23
1584	1584	(m) Any policy or rider advertised, marketed, or offered as long-term-care or nursing home 24
1585	1585	insurance shall comply with the provisions of this chapter. 25
1586	1586	(n) If a claim under a long-term-care insurance contract is denied, the issuer shall, within 26
1587	1587	sixty (60) days of the date of a written request by the policyholder or certificate holder, or a 27
1588	1588	representative thereof: 28
1589	1589	(1) Provide a written explanation of the reasons for the denial; and 29
1590	1590	(2) Make available all information directly related to the denial. 30
1591	1591	(o) Any policy, certificate, or rider advertised, marketed or offered as long-term care or 31
1592	1592	nursing home insurance, as defined in § 27-34.2-4, shall comply with the provisions of this chapter. 32
1593	1593	27-34.2-21. Producer training requirements. 33
1594	1594	(a) On or after January 1, 2008, an individual may not sell, solicit or negotiate long-term-34
1595	1595
1596	1596
1597	1597	LC002603 - Page 44 of 137
1598	1598	care insurance unless the individual is licensed as an insurance producer for accident and health or 1
1599	1599	sickness or life and has completed a one-time training course. The training shall meet the 2
1600	1600	requirements set forth in this section. 3
1601	1601	(b) An individual already licensed and selling, soliciting or negotiating long-term-care 4
1602	1602	insurance on July 3, 2007 may not continue to sell, solicit or negotiate long-term-care insurance 5
1603	1603	unless the individual has completed a one-time training course as set forth in the section, within 6
1604	1604	one year from July 3, 2007. 7
1605	1605	(c) In addition to the one-time training course required in this section, an individual who 8
1606	1606	sells, solicits or negotiates long-term-care insurance shall complete ongoing training as set forth in 9
1607	1607	this section. 10
1608	1608	(d) The training requirements of this section may be approved as continuing education 11
1609	1609	courses. 12
1610	1610	(e) The one-time training required by this section shall be no less than eight (8) hours and 13
1611	1611	the ongoing training required by this section shall be no less than four (4) hours every twenty-four 14
1612	1612	(24) months. 15
1613	1613	(f) The training required under paragraph (a) shall consist of topics related to long-term-16
1614	1614	care insurance, long-term-care services and, if applicable, qualified state long-term-care insurance. 17
1615	1615	Partnership partnership programs, including, but not limited to: 18
1616	1616	(1) State and federal regulations and requirements and the relationship between qualified 19
1617	1617	state long-term-care insurance partnership programs and other public and private coverage of long-20
1618	1618	term services, including Medicaid; 21
1619	1619	(2) Available long-term-care services and providers; 22
1620	1620	(3) Changes or improvements in long-term-care services or providers; 23
1621	1621	(4) Alternatives to the purchase of private long-term-care insurance; 24
1622	1622	(5) The effect of inflation on benefits and the importance of inflation protection; and 25
1623	1623	(6) Consumer suitability standards and guidelines. 26
1624	1624	(g) The training required by this section shall not include training that is insurer or company 27
1625	1625	product specific or that includes any sales or marketing information, materials, or training, other 28
1626	1626	than those required by state or federal law. 29
1627	1627	(h) Insurers subject to this act shall obtain verification that a producer receives training 30
1628	1628	required by this section before a producer is permitted to sell, solicit or negotiate the insurer’s long-31
1629	1629	term-care insurance products, maintain records subject to the state’s record retention requirements, 32
1630	1630	and make that verification available to the commissioner upon request. 33
1631	1631	(i) Insurers subject to this act shall maintain records with respect to the training of its 34
1632	1632
1633	1633
1634	1634	LC002603 - Page 45 of 137
1635	1635	producers concerning the distribution of its partnership policies that will allow the state insurance 1
1636	1636	department to provide assurance to the state Medicaid agency that producers have received the 2
1637	1637	training contained in this section and that producers have demonstrated an understanding of the 3
1638	1638	partnership policies and their relationship to public and private coverage of long-term care, 4
1639	1639	including Medicaid, in this state. These records shall be maintained in accordance with the state’s 5
1640	1640	record retention requirements and shall be made available to the commissioner upon request. 6
1641	1641	(j) The satisfaction of these training requirements in any state shall be deemed to satisfy 7
1642	1642	the training requirements in this state. 8
1643	1643	SECTION 12. Sections 27-35-1, 27-35-3, 27-35-4 and 27-35-8 of the General Laws in 9
1644	1644	Chapter 27-35 entitled "Insurance Holding Company Systems" are hereby amended to read as 10
1645	1645	follows: 11
1646	1646	27-35-1. Definitions. 12
1647	1647	As used in this chapter: 13
1648	1648	(a) “Affiliate.” An “affiliate” of, or person “affiliated” with, a specific person, is a person 14
1649	1649	who directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is 15
1650	1650	under common control with, the person specified. An “affiliate” does not include a protected cell 16
1651	1651	of a protected cell company organized under the protected cell companies act, chapter 64 of this 17
1652	1652	title. 18
1653	1653	(b) “Commissioner” means the definition prescribed by § 42-14-5. 19
1654	1654	(c) “Control.” The term “control” (including the terms “controlling,” “controlled by,” and 20
1655	1655	“under common control with”), means the possession, direct or indirect, of the power to direct or 21
1656	1656	cause the direction of the management and policies of a person, whether through the ownership of 22
1657	1657	voting securities, by contract other than a commercial contract for goods or management services, 23
1658	1658	or otherwise, unless the power is the result of an official position with or corporate office held by 24
1659	1659	the person. Control shall be presumed to exist if any person, directly or indirectly, owns, controls, 25
1660	1660	holds with the power to vote, or holds proxies representing, ten percent (10%) or more of the voting 26
1661	1661	securities of any other person. This presumption may be rebutted by a showing made in the manner 27
1662	1662	provided by § 27-35-3(k) that control does not exist in fact. The commissioner may determine, after 28
1663	1663	furnishing all persons in interest notice and opportunity to be heard and making specific findings 29
1664	1664	of fact to support the determination, that control exists in fact, notwithstanding the absence of a 30
1665	1665	presumption to that effect. 31
1666	1666	(d) “Group capital calculation instructions” means the group capital calculation 32
1667	1667	instructions, as adopted by the NAIC and as amended by the NAIC from time to time, in accordance 33
1668	1668	with the procedures adopted by the NAIC. 34
1669	1669
1670	1670
1671	1671	LC002603 - Page 46 of 137
1672	1672	(e) “Group-wide supervisor” means the regulatory official authorized to engage in 1
1673	1673	conducting and coordinating group-wide supervision activities who is determined or acknowledged 2
1674	1674	by the commissioner under § 27-35-5.5(d) to have sufficient significant contacts with the 3
1675	1675	internationally active insurance group. 4
1676	1676	(f) “Insurance holding company system.” An “insurance holding company system” 5
1677	1677	consists of two (2) or more affiliated persons, one or more of which is an insurer. 6
1678	1678	(g) “Insurer.” The term “insurer” means any person or persons or corporation, partnership, 7
1679	1679	or company authorized by the laws of this state to transact the business of insurance in this state, 8
1680	1680	including entities organized or authorized to transact business in this state pursuant to chapters 19, 9
1681	1681	20, 20.1, 20.2, 20.3, and 41 of this title, except that it shall not include agencies, authorities, or 10
1682	1682	instrumentalities of the United States, its possessions and territories, the Commonwealth of Puerto 11
1683	1683	Rico, the District of Columbia, or a state or political subdivision of a state. 12
1684	1684	(h) “Internationally active insurance group” means an insurance holding company system 13
1685	1685	that: 14
1686	1686	(1) Includes an insurer registered under § 27-35-3; and 15
1687	1687	(2) Meets the following criteria: 16
1688	1688	(i) Premiums written in at least three (3) countries; 17
1689	1689	(ii) The percentage of gross premiums written outside the United States is at least ten 18
1690	1690	percent (10%) of the insurance holding company system’s total gross written premiums; and 19
1691	1691	(iii) Based on a three-year (3) rolling average, the total assets of the insurance holding 20
1692	1692	company system are at least fifty billion dollars ($50,000,000,000) or the total gross written 21
1693	1693	premiums of the insurance holding company system are at least ten billion dollars 22
1694	1694	($10,000,000,000). 23
1695	1695	(i) “Enterprise Risk.” “Enterprise Risk” means any activity, circumstance, event or series 24
1696	1696	of events involving one or more affiliates of an insurer that, if not remedied promptly, is likely to 25
1697	1697	have a material adverse effect upon the financial condition or liquidity of the insurer or its insurance 26
1698	1698	holding company system as a whole, including, but not limited to, anything that would cause the 27
1699	1699	insurer’s risk-based capital to fall into company action level as set forth in chapters 4.6 and 4.7 of 28
1700	1700	this title or would cause the insurer to be in a hazardous financial condition as set forth in chapter 29
1701	1701	14.2 of this title. 30
1702	1702	(j) “NAIC” means the National Association of Insurance Commissioners. 31
1703	1703	(k) “NAIC liquidity stress test framework.” The “NAIC liquidity stress test framework” is 32
1704	1704	a separate NAIC publication that includes a history of the NAIC’s development of regulatory 33
1705	1705	liquidity stress testing, the scope criteria applicable for a specific data year, and the liquidity stress 34
1706	1706
1707	1707
1708	1708	LC002603 - Page 47 of 137
1709	1709	test instructions and reporting templates for a specific data year, such scope criteria, instructions 1
1710	1710	and reporting template being as adopted by the NAIC and as amended by the NAIC from time to 2
1711	1711	time, in accordance with the procedures adopted by the NAIC. 3
1712	1712	(l) “Person.” A “person” is an individual, a corporation, a limited liability company, a 4
1713	1713	partnership, an association, a joint stock company, a trust, an unincorporated organization, or any 5
1714	1714	similar entity or any combination of the foregoing acting in concert, but shall not include any joint 6
1715	1715	venture partnership exclusively engaged in owning, managing, leasing or developing real or 7
1716	1716	tangible personal property. 8
1717	1717	(m) “Scope criteria.” The “scope criteria,” as detailed in the NAIC liquidity stress test 9
1718	1718	framework, are the designated exposure bases along with minimum magnitudes thereof for the 10
1719	1719	specified data year, used to establish a preliminary list of insurers considered scoped into the NAIC 11
1720	1720	liquidity stress test framework for that data year. 12
1721	1721	(n) “Securityholder.” A “securityholder” of a specified person is one who owns any 13
1722	1722	security of such person, including common stock, preferred stock, debt obligations, and any other 14
1723	1723	security convertible into or evidencing the right to acquire any of the foregoing. 15
1724	1724	(o) “Subsidiary.” A “subsidiary” of a specified person is an affiliate controlled by such 16
1725	1725	person directly, or indirectly, through one or more intermediaries. 17
1726	1726	(p) “Voting security.” The term “voting security” shall include any security convertible 18
1727	1727	into or evidencing a right to acquire a voting security. 19
1728	1728	27-35-3. Registration of insurers. 20
1729	1729	(a) Registration. Every insurer authorized to do business in this state and that is a member 21
1730	1730	of an insurance holding company system shall register with the commissioner, except a foreign 22
1731	1731	insurer subject to registration requirements and standards adopted by statute or regulation in the 23
1732	1732	jurisdiction of its domicile that are substantially similar to those contained in: 24
1733	1733	(1) This section; 25
1734	1734	(2) Section 27-35-4(a)(1), (b), and (d); and 26
1735	1735	(3) Either § 27-35-4(a)(2) or a provision such as the following: Each registered insurer 27
1736	1736	shall keep current the information required to be disclosed in its registration statement by reporting 28
1737	1737	all material changes or additions within fifteen (15) days after the end of the month in which it 29
1738	1738	learns of each change or addition. 30
1739	1739	Any insurer subject to registration under this section shall register within fifteen (15) days 31
1740	1740	after it becomes subject to registration, and annually thereafter by May 1 of each year for the 32
1741	1741	previous calendar year, unless the commissioner for good cause shown extends the time for 33
1742	1742	registration, and then within the extended time. The commissioner may require any insurer 34
1743	1743
1744	1744
1745	1745	LC002603 - Page 48 of 137
1746	1746	authorized to do business in the state that is a member of an insurance holding company system 1
1747	1747	and that is not subject to registration under this section to furnish a copy of the registration 2
1748	1748	statement, the summary specified in subsection (c) of this section, or other information filed by the 3
1749	1749	insurance company with the insurance regulatory authority of its domiciliary jurisdiction. 4
1750	1750	(b) Information and form required. Every insurer subject to registration shall file a 5
1751	1751	registration statement with the commissioner on a form and in a format prescribed by the NAIC 6
1752	1752	that shall contain the following current information: 7
1753	1753	(1) The capital structure, general financial condition, ownership, and management of the 8
1754	1754	insurer and any person controlling the insurer; 9
1755	1755	(2) The identity and relationship of every member of the insurance holding company 10
1756	1756	system; 11
1757	1757	(3) The following agreements in force and transactions currently outstanding or that have 12
1758	1758	occurred during the last calendar year between the insurer and its affiliates: 13
1759	1759	(i) Loans, other investments or purchases, sales or exchanges of securities of the affiliates 14
1760	1760	by the insurer or of the insurer by its affiliates; 15
1761	1761	(ii) Purchases, sales, or exchanges of assets; 16
1762	1762	(iii) Transactions not in the ordinary course of business; 17
1763	1763	(iv) Guarantees or undertakings for the benefit of an affiliate that result in an actual 18
1764	1764	contingent exposure of the insurer’s assets to liability, other than insurance contracts entered into 19
1765	1765	in the ordinary course of the insurer’s business; 20
1766	1766	(v) All management service contracts, service contracts, and all cost sharing arrangements; 21
1767	1767	(vi) Reinsurance agreements; 22
1768	1768	(vii) Dividends and other distributions to shareholders; and 23
1769	1769	(viii) Consolidated tax allocation agreements; 24
1770	1770	(4) Any pledge of the insurer’s stock, including stock of any subsidiary or controlling 25
1771	1771	affiliate, for a loan made to any member of the insurance holding company system; 26
1772	1772	(5) If requested by the commissioner, the insurer shall include financial statements of or 27
1773	1773	within an insurance holding company system, including all affiliates. Financial statements may 28
1774	1774	include, but are not limited to, annual audited financial statements filed with the U.S. Securities 29
1775	1775	and Exchange Commission (SEC) pursuant to the Securities Act of 1933, as amended, or the 30
1776	1776	Securities Exchange Act of 1934, as amended. An insurer required to file financial statements 31
1777	1777	pursuant to this paragraph may satisfy the request by providing the commissioner with the most 32
1778	1778	recently filed parent corporation financial statements that have been filed with the SEC; 33
1779	1779	(6) Other matters concerning transactions between registered insurers and any affiliates as 34
1780	1780
1781	1781
1782	1782	LC002603 - Page 49 of 137
1783	1783	may be included from time to time in any registration forms adopted or approved by the 1
1784	1784	commissioner; 2
1785	1785	(7) Statements that the insurer’s board of directors oversees corporate governance and 3
1786	1786	internal controls and that the insurer’s officers or senior management have approved, implemented, 4
1787	1787	and continue to maintain and monitor corporate governance and internal control procedures; and 5
1788	1788	(8) Any other information required by the commissioner by rule or regulation. 6
1789	1789	(c) Summary of changes to registration statement. All registration statements shall 7
1790	1790	contain a summary outlining all items in the current registration statement representing changes 8
1791	1791	from the prior registration statement. 9
1792	1792	(d) Materiality. No information need be disclosed on the registration statement filed 10
1793	1793	pursuant to subsection (b) of this section if that information is not material for the purposes of this 11
1794	1794	section. Unless the commissioner by rule, regulation, or order provides otherwise, sales, purchases, 12
1795	1795	exchanges, loans, or extensions of credit, investments, or guarantees involving one-half of one 13
1796	1796	percent (.5%) or less of an insurer’s admitted assets as of the 31st day of December next preceding 14
1797	1797	shall not be deemed material for purposes of this section. The definition of materiality provided in 15
1798	1798	this subsection shall not apply for purposes of the group capital calculation or the liquidity stress 16
1799	1799	test framework. 17
1800	1800	(e) Reporting of dividends to shareholders. Subject to § 27-35-4(b), each registered 18
1801	1801	insurer shall report to the commissioner all dividends and other distributions to shareholders within 19
1802	1802	fifteen (15) business days following the declaration thereof. 20
1803	1803	(f) Information of insurers. Any person within an insurance holding company system 21
1804	1804	subject to registration shall be required to provide complete and accurate information to an insurer, 22
1805	1805	where the information is reasonably necessary to enable the insurer to comply with the provisions 23
1806	1806	of this act chapter. 24
1807	1807	(g) Termination of registration. The commissioner shall terminate the registration of any 25
1808	1808	insurer that demonstrates that it no longer is a member of an insurance holding company system. 26
1809	1809	(h) Consolidated filing. The commissioner may require or allow two (2) or more affiliated 27
1810	1810	insurers subject to registration to file a consolidated registration statement. 28
1811	1811	(i) Alternative registration. The commissioner may allow an insurer that is authorized to 29
1812	1812	do business in this state and which is part of an insurance holding company system to register on 30
1813	1813	behalf of any affiliated insurer which is required to register under subsection (a) and to file all 31
1814	1814	information and material required to be filed under this section. 32
1815	1815	(j) Exemptions. The provisions of this section shall not apply to any insurer, information, 33
1816	1816	or transaction if and to the extent that the commissioner by rule, regulation, or order shall exempt 34
1817	1817
1818	1818
1819	1819	LC002603 - Page 50 of 137
1820	1820	from the provisions of this section. 1
1821	1821	(k) Disclaimer. Any person may file with commissioner a disclaimer of affiliation with 2
1822	1822	any authorized insurer or a disclaimer may be filed by the insurer or any member of an insurance 3
1823	1823	holding company system. The disclaimer shall fully disclose all material relationships and bases 4
1824	1824	for affiliation between the person and the insurer as well as the basis for disclaiming the affiliation. 5
1825	1825	A disclaimer of affiliation shall be deemed to have been granted unless the commissioner, 6
1826	1826	within thirty (30) days following receipt of a complete disclaimer, notifies the filing party that the 7
1827	1827	disclaimer is disallowed. In the event of disallowance, the disclaiming party may request an 8
1828	1828	administrative hearing, which shall be granted. The disclaiming party shall be relieved of its duty 9
1829	1829	to register under this section if approval of the disclaimer has been granted by the commissioner, 10
1830	1830	or if the disclaimer is deemed to have been approved. 11
1831	1831	(l) Enterprise riskfilings. 12
1832	1832	(1) The ultimate controlling person of every insurer subject to registration shall also file an 13
1833	1833	annual enterprise risk report. The report shall, to the best of the ultimate controlling person’s 14
1834	1834	knowledge and belief, identify the material risks within the insurance holding company system that 15
1835	1835	could pose enterprise risk to the insurer. The report shall be filed with the lead state commissioner 16
1836	1836	of the insurance holding company system as determined by the procedures within the Financial 17
1837	1837	Analysis Handbook adopted by the National Association of Insurance Commissioners (NAIC). 18
1838	1838	(2) Group capital calculation. Except as provided below, the ultimate controlling person 19
1839	1839	of every insurer subject to registration shall concurrently file with the registration an annual group 20
1840	1840	capital calculation, as directed by the lead state commissioner. The report shall be completed in 21
1841	1841	accordance with the NAIC group capital calculation instructions, which may permit the lead state 22
1842	1842	commissioner to allow a controlling person, that is not the ultimate controlling person, to file the 23
1843	1843	group capital calculation. The report shall be filed with the lead state commissioner of the insurance 24
1844	1844	holding company system, as determined by the commissioner, in accordance with the procedures 25
1845	1845	within the Financial Analysis Handbook adopted by the NAIC. Insurance holding company systems 26
1846	1846	described below are exempt from filing the group capital calculation: 27
1847	1847	(i) An insurance holding company system that has only one insurer within its holding 28
1848	1848	company structure, that only writes business in its domestic state, and assumes no business from 29
1849	1849	any other insurer; 30
1850	1850	(ii) An insurance holding company system that is required to perform a group capital 31
1851	1851	calculation, specified by the United States Federal Reserve Board. The lead state commissioner 32
1852	1852	shall request the calculation from the Federal Reserve Board, under the terms of information 33
1853	1853	sharing agreements in effect. If the Federal Reserve Board cannot share the calculation with the 34
1854	1854
1855	1855
1856	1856	LC002603 - Page 51 of 137
1857	1857	lead state commissioner, the insurance holding company system is not exempt from the group 1
1858	1858	capital calculation filing; 2
1859	1859	(iii) An insurance holding company system whose non-United States group-wide 3
1860	1860	supervisor is located within a reciprocal jurisdiction, as described in § 27-1.1-1(g) that recognizes 4
1861	1861	the United States state regulatory approach to group supervision and group capital; 5
1862	1862	(iv) An insurance holding company system: 6
1863	1863	(A) That provides information to the lead state that meets the requirements for accreditation 7
1864	1864	under the NAIC financial standards and accreditation program, either directly or indirectly through 8
1865	1865	the group-wide supervisor, who has determined the information is satisfactory to allow the lead 9
1866	1866	state to comply with the NAIC group supervision approach, as detailed in the NAIC Financial 10
1867	1867	Analysis Handbook; and 11
1868	1868	(B) Whose non-United States group-wide supervisor that is not in a reciprocal jurisdiction 12
1869	1869	recognizes and accepts, as specified by the commissioner in regulation, the group capital 13
1870	1870	calculation as the world-wide group capital assessment for United States insurance groups who 14
1871	1871	operate in that jurisdiction; 15
1872	1872	(v) Notwithstanding the provisions of subsections (l)(2)(iii) and (iv) of this section, a lead 16
1873	1873	state commissioner shall require the group capital calculation for United States operations of any 17
1874	1874	non-United States based insurance holding company system where, after any necessary 18
1875	1875	consultation with other supervisors or officials, it is deemed appropriate by the lead state 19
1876	1876	commissioner for prudential oversight and solvency monitoring purposes or for ensuring the 20
1877	1877	competitiveness of the insurance marketplace. 21
1878	1878	(vi) Notwithstanding the exemptions from filing the group capital calculation stated in 22
1879	1879	subsections (l)(2)(iii) and (l)(2)(iv) of this section, the lead state commissioner has the discretion 23
1880	1880	to exempt the ultimate controlling person from filing the annual group capital calculation or to 24
1881	1881	accept a limited group capital filing or report, in accordance with criteria as specified by the 25
1882	1882	commissioner in regulation. 26
1883	1883	(vii) If the lead state commissioner determines that an insurance holding company system 27
1884	1884	no longer meets one or more of the requirements for an exemption from filing the group capital 28
1885	1885	calculation under this section, the insurance holding company system shall file the group capital 29
1886	1886	calculation at the next annual filing date unless given an extension by the lead state commissioner 30
1887	1887	based on reasonable grounds shown. 31
1888	1888	(3) Liquidity stress test. The ultimate controlling person of every insurer subject to 32
1889	1889	registration and also scoped into the NAIC liquidity stress test framework shall file the results of a 33
1890	1890	specific year’s liquidity stress test. The filing shall be made to the lead state insurance 34
1891	1891
1892	1892
1893	1893	LC002603 - Page 52 of 137
1894	1894	commissioner of the insurance holding company system as determined by the procedures within 1
1895	1895	the Financial Analysis Handbook adopted by the National Association of Insurance 2
1896	1896	Commissioners: 3
1897	1897	(i) The NAIC liquidity stress test framework includes scope criteria applicable to a specific 4
1898	1898	data year. These scope criteria are reviewed at least annually by the financial stability task force or 5
1899	1899	its successor. Any change to the NAIC liquidity stress test framework or to the data year for which 6
1900	1900	the scope criteria are to be measured, shall be effective on January 1 of the year following the 7
1901	1901	calendar year when such changes are adopted. Insurers meeting at least one threshold of the scope 8
1902	1902	criteria are considered scoped into the NAIC liquidity stress test framework for the specified data 9
1903	1903	year, unless the lead state insurance commissioner, in consultation with the NAIC financial stability 10
1904	1904	task force or its successor, determines the insurer should not be scoped into the framework for that 11
1905	1905	data year. Similarly, insurers that do not trigger at least one threshold of the scope criteria are 12
1906	1906	considered scoped out of the NAIC liquidity stress test framework for the specified data year, unless 13
1907	1907	the lead state insurance commissioner, in consultation with the NAIC financial stability task force 14
1908	1908	or its successor, determines the insurer should be scoped into the framework for that data year. 15
1909	1909	(A) Regulators wish to avoid having insurers scoped in and out of the NAIC liquidity stress 16
1910	1910	test framework on a frequent basis. The lead state insurance commissioner, in consultation with the 17
1911	1911	financial stability task force or its successor, will assess this concern as part of the determination 18
1912	1912	for an insurer. 19
1913	1913	(ii) The performance of, and filing of the results from, a specific year’s liquidity stress test 20
1914	1914	shall comply with the NAIC liquidity stress test framework’s instructions and reporting templates 21
1915	1915	for that year and any lead state insurance commissioner determinations, in conjunction with the 22
1916	1916	financial stability task force or its successor, provided within the framework. 23
1917	1917	(m) Violations. The failure to file a registration statement or any summary of the 24
1918	1918	registration statement or enterprise risk filing required by this section within the time specified for 25
1919	1919	the filing shall be a violation of this section. 26
1920	1920	27-35-4. Standards and management of an insurer within a holding company system. 27
1921	1921	(a) Transactions within an insurance holding company system. 28
1922	1922	(1) Transactions within an insurance holding company system to which an insurer subject 29
1923	1923	to registration is a party shall be subject to the following standards: 30
1924	1924	(i) The terms shall be fair and reasonable; 31
1925	1925	(ii) Agreements for cost sharing and management services shall include such provisions as 32
1926	1926	required by rule and regulation issued by the commissioner; 33
1927	1927	(iii) Charges or fees for services performed shall be reasonable; 34
1928	1928
1929	1929
1930	1930	LC002603 - Page 53 of 137
1931	1931	(iv) Expenses incurred and payment received shall be allocated to the insurer in conformity 1
1932	1932	with customary insurance accounting practices consistently applied; 2
1933	1933	(v) The books, accounts, and records of each party to all such transactions shall be so 3
1934	1934	maintained as to clearly and accurately disclose the nature and details of the transactions including 4
1935	1935	such accounting information as is necessary to support the reasonableness of the charges or fees to 5
1936	1936	the respective parties; and 6
1937	1937	(vi) The insurer’s surplus as regards policyholders following any dividends or distributions 7
1938	1938	to shareholder affiliates shall be reasonable in relation to the insurer’s outstanding liabilities and 8
1939	1939	adequate to its financial needs;. 9
1940	1940	(vii) The charges or fees for services performed shall be reasonable; and 10
1941	1941	(2) The following transactions involving a domestic insurer and any person in its insurance 11
1942	1942	holding company system, including amendments or modifications of affiliate agreements 12
1943	1943	previously filed pursuant to this section, which are subject to any materiality standards contained 13
1944	1944	in subparagraphs (A) through (G) of this subsection, may not be entered into unless the insurer has 14
1945	1945	notified the commissioner in. writing of its intention to enter into the transaction at least thirty (30) 15
1946	1946	days prior, or such shorter period as the commissioner may permit, and the commissioner has not 16
1947	1947	disapproved it within that period. The notice for amendments or modifications shall include the 17
1948	1948	reasons for the change and the financial impact on the domestic insurer. Informal notice shall be 18
1949	1949	reported, within thirty (30) days after a termination of a previously filed agreement, to the 19
1950	1950	commissioner for determination of the type of filing required, if any. 20
1951	1951	(A) Sales, purchases, exchanges, loans, extensions of credit, or investments, provided the 21
1952	1952	transactions are equal to or exceed: 22
1953	1953	(i) With respect to nonlife insurers, the lesser of three percent (3%) of the insurer’s admitted 23
1954	1954	assets or twenty-five percent (25%) of surplus as regards policyholders as of the 31st day of 24
1955	1955	December next preceding; or 25
1956	1956	(ii) With respect to life insurers, three percent (3%) of the insurer’s admitted assets; as of 26
1957	1957	the 31st day of December next preceding; 27
1958	1958	(B) Loans or extensions of credit to any person who is not an affiliate, where the insurer 28
1959	1959	makes the loans or extensions of credit with the agreement or understanding that the proceeds of 29
1960	1960	the transactions, in whole or in substantial part, are to be used to make loans or extensions of credit 30
1961	1961	to, to purchase assets of, or to make investments in, any affiliate of the insurer making the loans of 31
1962	1962	or extensions of credit, provided the transactions are equal to or exceed: 32
1963	1963	(i) With respect to nonlife insurers, the lesser of three percent (3%) of the insurer’s admitted 33
1964	1964	assets or twenty-five percent (25%) of surplus as regards policyholders as of the 31st day of 34
1965	1965
1966	1966
1967	1967	LC002603 - Page 54 of 137
1968	1968	December next preceding; 1
1969	1969	(ii) With respect to life insurers, three percent (3%) of the insurer’s admitted assets; as of 2
1970	1970	the 31st day of December next preceding; 3
1971	1971	(C) Reinsurance agreements or modifications thereto, including: 4
1972	1972	(I) All reinsurance pooling agreements; 5
1973	1973	(II) Agreements in which the reinsurance premium or a change in the insurer’s liabilities, 6
1974	1974	or the projected reinsurance premiums or a change in the insurer’s liabilities in any of the next three 7
1975	1975	(3) years, equals or exceeds five percent (5%) of the insurer’s surplus as regards policyholders as 8
1976	1976	of the 31st day of December next preceding, including those agreements which may require as 9
1977	1977	consideration the transfer of assets from an insurer to a nonaffiliate, if an agreement or 10
1978	1978	understanding exists between the insurer and nonaffiliate that any portion of those assets will be 11
1979	1979	transferred to one or more affiliates of the insurer; 12
1980	1980	(D) All management agreements, service contracts, tax allocation agreements, guarantees 13
1981	1981	and all cost sharing arrangements; 14
1982	1982	(E) Guarantees when made by a domestic insurer; provided, however, that a guarantee 15
1983	1983	which is quantifiable as to amount is not subject to the notice requirements of this subsection unless 16
1984	1984	it exceeds the lesser of one-half of one percent (.5%) of the insurer’s admitted assets or ten percent 17
1985	1985	(10%) of surplus as regards policyholders as of the 31st day of December next preceding. Further, 18
1986	1986	all guarantees which are not quantifiable as to amount are subject to the notice requirements of this 19
1987	1987	subsection; 20
1988	1988	(F) Direct or indirect acquisitions or investments in a person that controls the insurer or in 21
1989	1989	an affiliate of the insurer in an amount which, together with its present holdings in such investments, 22
1990	1990	exceeds two and one-half percent (2.5%) of the insurer’s surplus to policyholders. Direct or indirect 23
1991	1991	acquisitions or investments in subsidiaries acquired pursuant to § 27-35-1.5 (or authorized under 24
1992	1992	any other section of this chapter), or in non-subsidiary insurance affiliates that are subject to the 25
1993	1993	provisions of this act chapter, are exempt from this requirements requirement; and 26
1994	1994	(G) Any material transactions, specified by regulation, which the commissioner determines 27
1995	1995	may adversely affect the interests of the insurer’s policyholders; 28
1996	1996	Nothing contained in this paragraph shall be deemed to authorize or permit any transactions 29
1997	1997	which, in the case of an insurer not a member of the same insurance holding company system, 30
1998	1998	would be otherwise contrary to law. 31
1999	1999	(3) A domestic insurer may not enter into transactions which are part of a plan or series of 32
2000	2000	like transactions with persons within the insurance holding company system if the purpose of those 33
2001	2001	separate transactions is to avoid the statutory threshold amount and thus avoid the review that would 34
2002	2002
2003	2003
2004	2004	LC002603 - Page 55 of 137
2005	2005	occur otherwise. If the commissioner determines that the separate transactions were entered into 1
2006	2006	over any twelve (12) month period for that purpose, he or she may exercise his or her authority 2
2007	2007	under § 27-35-9. 3
2008	2008	(4) The commissioner, in reviewing transactions pursuant to subdivision (a)(2) of this 4
2009	2009	section, shall consider whether the transactions comply with the standards set forth in subdivision 5
2010	2010	(a)(1) of this section and whether they may adversely affect the interests of policyholders. 6
2011	2011	(5) The commissioner shall be notified within thirty (30) days of any investment of the 7
2012	2012	domestic insurer in any one corporation if the total investment in the corporation by the insurance 8
2013	2013	holding company system exceeds ten percent (10%) of the corporation’s voting securities. 9
2014	2014	(b) Adequacy of surplus. For the purposes of this chapter, in determining whether an 10
2015	2015	insurer’s surplus as regards policyholders is reasonable in relation to the insurer’s outstanding 11
2016	2016	liabilities and adequate to its financial needs, the following factors, among others, shall be 12
2017	2017	considered: 13
2018	2018	(1) The size of the insurer as measured by its assets, capital and surplus, reserves, premium 14
2019	2019	writings, insurance in force, and other appropriate criteria; 15
2020	2020	(2) The extent to which the insurer’s business is diversified among the several lines of 16
2021	2021	insurance; 17
2022	2022	(3) The number and size of risks insured in each line of business; 18
2023	2023	(4) The extent of the geographical dispersion of the insurer’s insured risks; 19
2024	2024	(5) The nature and extent of the insurer’s reinsurance program; 20
2025	2025	(6) The quality, diversification, and liquidity of the insurer’s investment portfolio; 21
2026	2026	(7) The recent past and projected future trend in the size of the insurer’s investment 22
2027	2027	portfolio; 23
2028	2028	(8) The surplus as regards policyholders maintained by other comparable insurers; 24
2029	2029	(9) The adequacy of the insurer’s reserves; and 25
2030	2030	(10) The quality and liquidity of investment in affiliates. The commissioner may treat this 26
2031	2031	investment as a disallowed asset for the purposes of determining the adequacy of surplus as regards 27
2032	2032	policyholders whenever in his or her judgment the investment warrants. 28
2033	2033	(c) Dividends and other distributions. 29
2034	2034	(1) No domestic insurer shall pay any extraordinary dividend or make any other 30
2035	2035	extraordinary distribution to its shareholders until thirty (30) days after the commissioner has 31
2036	2036	received notice of the declaration thereof and has not within that period disapproved the payment, 32
2037	2037	or until the commissioner has approved the payment within the thirty (30) day period; 33
2038	2038	(2) For purposes of this section, an “extraordinary dividend or distribution” includes any 34
2039	2039
2040	2040
2041	2041	LC002603 - Page 56 of 137
2042	2042	dividend or distribution of cash or other property, whose fair market value together with that of 1
2043	2043	other dividends or distributions made within the preceding twelve (12) months exceeds the lesser 2
2044	2044	of: 3
2045	2045	(i) ten percent (10%) of the insurer’s surplus as regards policyholders as of the 31st day of 4
2046	2046	December next preceding; or 5
2047	2047	(ii) the net gain from operations of the insurer, if the insurer is a life insurer, or the net 6
2048	2048	income, if the insurer is not a life insurer, not including realized capital gains, for the twelve (12) 7
2049	2049	month period ending the 31st day of December next preceding, but shall not include pro rata 8
2050	2050	distributions of any class of the insurer’s own securities. 9
2051	2051	In determining whether a dividend or distribution is extraordinary, an insurer other than a 10
2052	2052	life insurer may carry forward net income from the previous two (2) calendar years that has not 11
2053	2053	already been paid out as dividends. This carry forward shall be computed by taking the net income 12
2054	2054	from the second and third preceding calendar years, not including realized capital gains, less 13
2055	2055	dividends paid in the second and immediate preceding calendar years; 14
2056	2056	(3) Notwithstanding any other provision of law, an insurer may declare an extraordinary 15
2057	2057	dividend or distribution which is conditional upon the commissioner’s approval, and the declaration 16
2058	2058	shall confer no rights upon shareholders until: (i) the commissioner has approved the payment of 17
2059	2059	the dividend or distribution or (ii) the commissioner has not disapproved the payment within the 18
2060	2060	thirty (30) day period referred to in subdivision (1) of this subsection. 19
2061	2061	(d) Management of domestic insurers subject to registration. All domestic insurers shall 20
2062	2062	become in compliance and maintain compliance with the provisions of this title addressing good 21
2063	2063	corporate governance standards § 27-1-2.1, unless otherwise exempted in § 27-1-2.1. 22
2064	2064	27-35-8. Injunctions — Prohibitions against voting securities — Sequestration of 23
2065	2065	voting securities. 24
2066	2066	(a) Injunctions. Whenever it appears to the commissioner that any insurer or any director, 25
2067	2067	officer, employee, or agent thereof has committed or is about to commit a violation of this chapter 26
2068	2068	or of any rule, regulation, or order issued by the commissioner under this chapter, the commissioner 27
2069	2069	may apply to the superior court of Providence County for an order enjoining the insurer or director, 28
2070	2070	officer, employee, or agent thereof from violating or continuing to violate this chapter or any rule, 29
2071	2071	regulation or order, and for such other equitable relief as the nature of the case and the interests of 30
2072	2072	the insurer’s policyholders, creditors, and shareholders or the public may require. 31
2073	2073	(b) Voting of securities; when prohibited. No security which is the subject of any agreement 32
2074	2074	or arrangement regarding acquisition, or which is acquired or to be acquired, in contravention of 33
2075	2075	the provisions of this chapter or of any rule, regulation, or order issued by the commissioner under 34
2076	2076
2077	2077
2078	2078	LC002603 - Page 57 of 137
2079	2079	this chapter may be voted at any shareholders’ meeting, or may be counted for quorum purposes, 1
2080	2080	and any action of shareholders requiring the affirmative vote of a percentage of shares may be taken 2
2081	2081	as though the securities were not issued and outstanding; but no action taken at the meeting shall 3
2082	2082	be invalidated by the voting of the securities, unless the action would materially affect control of 4
2083	2083	the insurer or unless the courts of this state have so ordered. If an insurer or the commissioner has 5
2084	2084	reason to believe that any security of the insurer has been or is about to be acquired in contravention 6
2085	2085	of the provisions of this chapter or of any rule, regulation, or order issued by the commissioner 7
2086	2086	under this chapter the insurer or the commissioner may apply to the superior court for Providence 8
2087	2087	County to enjoin any offer, request, invitation, agreement, or acquisition made in contravention of 9
2088	2088	§ 27-35-4 27-35-2 or any rule, regulation, or order issued by the commissioner under that section 10
2089	2089	to enjoin the voting of any security so acquired, to void any vote of the security already cast at any 11
2090	2090	meeting of shareholders, and for such other equitable relief as the nature of the case and the interests 12
2091	2091	of the insurer’s policyholders, creditors, and shareholders or the public may require. 13
2092	2092	(c) Sequestration of voting securities. In any case where a person has acquired or is 14
2093	2093	proposing to acquire any voting securities in violation of this chapter or any rule, regulation, or 15
2094	2094	order issued by the commissioner under this chapter, the superior court for Providence County may, 16
2095	2095	on such notice that the court deems appropriate, upon the application of the insurer or the 17
2096	2096	commissioner seize or sequester any voting securities of the insurer owned directly or indirectly by 18
2097	2097	the person, and issue such orders as may be appropriate to effectuate the provisions of this chapter. 19
2098	2098	Notwithstanding any other provisions of law, for the purposes of this chapter, the situs of the 20
2099	2099	ownership of the securities of domestic insurers shall be deemed to be in this state. 21
2100	2100	SECTION 13. Section 27-36-1 of the General Laws in Chapter 27-36 entitled "Consumer 22
2101	2101	Representation at Rate Hearings" is hereby amended to read as follows: 23
2102	2102	27-36-1. Representation. 24
2103	2103	All hearings conducted in accordance with the provisions of this title and chapter 62 of title 25
2104	2104	42 shall be attended by the attorney general or his or her designee and he or she shall represent, 26
2105	2105	protect, and advocate the rights of the consumers at the hearings; provided, that if the hearings are 27
2106	2106	related to a rate increase request by a health insurer, then the hearings shall be open to the public 28
2107	2107	and shall be held by the department of business regulation. The department shall promulgate rules 29
2108	2108	and regulations to ensure that the general public is given adequate notice. The term “health insurer” 30
2109	2109	as used in this chapter includes all persons, firms, corporations, or other organizations offering and 31
2110	2110	assuring health services on a prepaid or primarily expense incurred basis, including, but not limited 32
2111	2111	to, policies of accident or sickness insurance, as defined by chapter 18 of this title, nonprofit 33
2112	2112	hospital or medical service plans, whether organized under chapter 10 19 or 20 of this title or under 34
2113	2113
2114	2114
2115	2115	LC002603 - Page 58 of 137
2116	2116	any public law or by special act of the general assembly, health maintenance organizations, and 1
2117	2117	any other entity which insures or reimburses for diagnostic, therapeutic, or preventive services to a 2
2118	2118	defined population on the basis of a periodic premium. It shall also include all organizations 3
2119	2119	providing health benefits coverage for employees on a self-insurance basis without the intervention 4
2120	2120	of other entities. 5
2121	2121	SECTION 14. Sections 27-41-3, 27-41-13.1, 27-41-14, 27-41-16, 27-41-18.1, 27-41-21, 6
2122	2122	27-41-49.1, 27-41-68 and 27-41-70 of the General Laws in Chapter 27-41 entitled "Health 7
2123	2123	Maintenance Organizations" are hereby amended to read as follows: 8
2124	2124	27-41-3. Establishment of health maintenance organizations. 9
2125	2125	(a)(1) Notwithstanding chapter 5.1 of title 7, sections 27-2-22, 27-19-4, 27-20-4, 27-20.1-10
2126	2126	2, and 27-20.2-2, or any other law of this state to the contrary, any public or private organization 11
2127	2127	may apply to the director of business regulation for and obtain a license to establish and operate a 12
2128	2128	health maintenance organization in compliance with this chapter. No public or private organization 13
2129	2129	shall establish or operate a health maintenance organization in this state without obtaining a license 14
2130	2130	under this chapter. A foreign corporation may qualify under this chapter, subject to its registration 15
2131	2131	to do business in this state as a foreign corporation under § 7-1.2-1401; 16
2132	2132	(2) Notwithstanding anything to the contrary in § 7-6-4, a non-profit corporation may be 17
2133	2133	organized for the purpose of a health maintenance organization and that corporation shall not be 18
2134	2134	subject to limits in its assets except as provided in this chapter. 19
2135	2135	(b) Each application for a license shall be verified by an officer or authorized representative 20
2136	2136	of the applicant, shall be in a form prescribed by the director in consultation with the director of 21
2137	2137	health, and shall set forth or be accompanied by the following: 22
2138	2138	(1) A copy of the organizational documents of the applicant, such as the articles of 23
2139	2139	incorporation; 24
2140	2140	(2) A copy of the bylaws, rules and regulations, or similar document, if any, regulating the 25
2141	2141	conduct of the internal affairs of the applicant; 26
2142	2142	(3) A list of the names, addresses, and official positions of the persons who are to be 27
2143	2143	responsible for the conduct of the affairs of the applicant, including all members of the board of 28
2144	2144	directors, board of trustees, executive committee, or other governing board or committee, and the 29
2145	2145	principal officers of the corporation; 30
2146	2146	(4) A copy of any contract made or to be made, including any revisions to the document 31
2147	2147	between any providers or persons listed in subdivision (3) of this subsection and the applicant; 32
2148	2148	(5) A copy of the form of evidence of coverage to be issued to the enrollees; 33
2149	2149	(6) A copy of the form of the group contract, if any, which is to be issued to employers, 34
2150	2150
2151	2151
2152	2152	LC002603 - Page 59 of 137
2153	2153	unions, trustees, or other organizations; 1
2154	2154	(7) Financial statements showing the applicant’s assets, liabilities, and sources of financial 2
2155	2155	support. If the applicant’s financial affairs are audited by independent certified public accountants, 3
2156	2156	a copy of the applicant’s most recent regular certified financial statement shall be deemed to satisfy 4
2157	2157	this requirement unless the director directs that additional or more recent financial information is 5
2158	2158	required for the proper administration of this chapter; 6
2159	2159	(8) An examination report prepared by the insurance department of the company’s state of 7
2160	2160	domicile or port of entry state. This requirement shall be deemed to be satisfied if the report is less 8
2161	2161	than five (5) years old and: (i) the insurance department at the time of the examination was 9
2162	2162	accredited under the National Association of Insurance Commissioners’ financial regulations 10
2163	2163	standards and accreditation program or (ii) the examination is performed under the supervision of 11
2164	2164	an accredited insurance department or with the participation of one or more examiners who are 12
2165	2165	employed by an accredited state insurance department and who, after a review of the examination 13
2166	2166	work papers and report, state under oath that the examination was performed in a manner consistent 14
2167	2167	with the standards and procedures required by their insurance department. In lieu of an examination 15
2168	2168	meeting the requirements set forth in this section, an examination of the company may be 16
2169	2169	performed, prior to licensure, by the Rhode Island insurance division. The examination shall be 17
2170	2170	performed and the associated costs shall be borne by the company in accordance with all the 18
2171	2171	provisions of chapter 13.1 of this title. 19
2172	2172	(9) A description of the proposed method of marketing the health maintenance 20
2173	2173	organization, a financial plan which includes a projection of the initial operating results anticipated 21
2174	2174	until the organization has had net income for at least one year, and a statement as to the sources of 22
2175	2175	working capital and any other sources of funding; 23
2176	2176	(10) A power of attorney duly executed by the applicant, if not domiciled in this state, 24
2177	2177	appointing the director and his or her successors in office, and duly authorized deputies, as the true 25
2178	2178	and lawful attorney of the applicant in and for this state upon whom all lawful process in any legal 26
2179	2179	action or proceeding against the health maintenance organization on a cause of action arising in 27
2180	2180	this state may be served; 28
2181	2181	(11) A statement reasonably describing the geographic area or areas to be served; 29
2182	2182	(12) A description of the complaint procedures to be utilized as required under § 27-41-11; 30
2183	2183	(13) A description of the procedures and programs to be implemented to meet the quality 31
2184	2184	of health care requirements in § 27-41-4(a)(2); 32
2185	2185	(14) A description of the mechanism by which enrollees will be afforded an opportunity to 33
2186	2186	participate in matters of policy and operation under § 27-41-6(b); 34
2187	2187
2188	2188
2189	2189	LC002603 - Page 60 of 137
2190	2190	(15) A description of the provider networks to be utilized to provide health care services to 1
2191	2191	enrollees; 2
2192	2192	(16) A description of the utilization management mechanisms by which enrollees’ access 3
2193	2193	to and use of health services will be controlled; and 4
2194	2194	(17) Any other information that the director in consultation with the director of health may 5
2195	2195	require to make the determinations required in § 27-41-4. 6
2196	2196	(c) An applicant or a licensed health maintenance organization shall, unless otherwise 7
2197	2197	provided for in this chapter, file a notice describing any material modification of the operation 8
2198	2198	including, but not limited to, systematic changes in provider networks and mechanisms for the 9
2199	2199	management and control of the use of covered services by enrollees, set out in the information 10
2200	2200	required by subsection (b) of this section. The notice shall be filed with the director and with the 11
2201	2201	director of health prior to the modification. If the director or the director of health does not 12
2202	2202	disapprove within ninety (90) days of the filing, the modification shall be deemed approved. 13
2203	2203	(d) An applicant or a licensed health maintenance organization shall file all contracts of 14
2204	2204	reinsurance. Any agreement between the organization and an insurer shall be subject to the laws of 15
2205	2205	this state regarding reinsurance. All reinsurance agreements and any modifications to them must 16
2206	2206	be filed and approved. Reinsurance agreements shall remain in full force and effect for at least 17
2207	2207	ninety (90) days following written notice by registered mail of cancellation to the director by either 18
2208	2208	party. 19
2209	2209	27-41-13.1. Initial net worth and capital requirements. 20
2210	2210	(a) Before the director issues a certificate of authority in accordance with § 27-41-4 of this 21
2211	2211	act, an applicant seeking to establish or operate a health maintenance organization shall have the 22
2212	2212	greater of: 23
2213	2213	(1) The amount of capital required for a health organization under chapter 4.7 of this title; 24
2214	2214	(2) An initial net worth of three million dollars ($3,000,000); or 25
2215	2215	(3) At the commissioner’s discretion, an amount greater than required under subparagraph 26
2216	2216	(1) or (2), as indicated by a business plan and a projected risk-based capital calculation after the 27
2217	2217	first full year of operation based on the most current National Association of Insurance 28
2218	2218	Commissioners Health Annual Statements Bank Blank. 29
2219	2219	27-41-14. Prohibited practices. 30
2220	2220	(a) No health maintenance organization, or representative of a health maintenance 31
2221	2221	organization, may cause or knowingly permit the use of advertising which is untrue or misleading, 32
2222	2222	solicitation which is untrue or misleading, or any form of evidence of coverage which is deceptive. 33
2223	2223	For the purposes of this chapter: 34
2224	2224
2225	2225
2226	2226	LC002603 - Page 61 of 137
2227	2227	(1) A statement or item of information shall be deemed to be untrue if it does not conform 1
2228	2228	to fact in any respect that is or may be significant to an enrollee of, or a person considering 2
2229	2229	enrollment with, a health maintenance organization; 3
2230	2230	(2) A statement or item of information shall be deemed to be misleading, whether or not it 4
2231	2231	may be literally untrue, if, in the total context in which the statement is made or the item of 5
2232	2232	information is communicated, the statement or item of information may be reasonably understood 6
2233	2233	by a reasonable person, not possessing special knowledge regarding health care coverage, as 7
2234	2234	indicating any benefit or advantage or the absence of any exclusion, limitation, or disadvantage of 8
2235	2235	possible significance to an enrollee of, or a person considering enrollment in, a health maintenance 9
2236	2236	organization, if the benefit or advantage or absence of limitation, exclusion, or disadvantage does 10
2237	2237	not in fact exist; and 11
2238	2238	(3) An evidence of coverage shall be deemed to be deceptive if the evidence of coverage 12
2239	2239	taken as a whole, and with consideration given to typography, format and language, shall be such 13
2240	2240	as to cause a reasonable person, not possessing special knowledge regarding health maintenance 14
2241	2241	organizations and evidences of coverage for them, to expect benefits, services, charges, or other 15
2242	2242	advantages which the evidence of coverage does not provide or which the health maintenance 16
2243	2243	organization issuing the evidence of coverage does not regularly make available for enrollees 17
2244	2244	covered under the evidence of coverage. 18
2245	2245	(b) Section 42-62-12 and regulations pursuant to that section and chapter 29 of this title, 19
2246	2246	relating to unfair competition and practices, shall be construed to apply to health maintenance 20
2247	2247	organizations and evidences of coverage except to the extent that the director of business regulation 21
2248	2248	determines that the nature of health maintenance organizations, and evidences of coverage, render 22
2249	2249	those sections clearly inappropriate. 23
2250	2250	(c) An enrollee may not be cancelled or nonrenewed except for reasons stated in the rules 24
2251	2251	of the health maintenance organization applicable to all enrollees, for the failure to pay the charge 25
2252	2252	for coverage, or for the other reasons as may be approved by the director of business regulation. 26
2253	2253	(d) No health maintenance organization, unless licensed as an insurer, may use in its name, 27
2254	2254	contracts, or literature any of the words “insurance”, “casualty”, “surety”, or “mutual”, or any 28
2255	2255	words descriptive of the insurance, casualty, or surety business or deceptively similar to the name 29
2256	2256	or description of any insurance or surety corporation doing business in this state. 30
2257	2257	(e) No person, unless in possession of a valid license as a health maintenance organization 31
2258	2258	pursuant to the laws of this state, shall hold himself or herself out as a health maintenance 32
2259	2259	organization or HMO or shall do business as a health maintenance organization or a HMO in the 33
2260	2260	state of Rhode Island, and no person shall do business in this state under a name deceptively similar 34
2261	2261
2262	2262
2263	2263	LC002603 - Page 62 of 137
2264	2264	to the name of any health maintenance organization possessing a valid license pursuant to this 1
2265	2265	chapter. 2
2266	2266	(f) No health maintenance organization shall fail to contract with any provider who is 3
2267	2267	licensed by this state to provide the services delineated in § 27-41-2(h)(1) 27-41-2(t)(1) solely 4
2268	2268	because that provider is a podiatrist as defined in chapter 29 of title 5. 5
2269	2269	(g) Except as provided in § 27-41-13(i), no contract between a health maintenance 6
2270	2270	organization and a physician for the provision of services to patients may require that the physician 7
2271	2271	indemnify or hold harmless the health maintenance organization for any expenses and liabilities, 8
2272	2272	including without limitation, judgments, settlements, attorneys’ fees, court costs, and any 9
2273	2273	associated charges, incurred in connection with any claim or action brought against the plan based 10
2274	2274	on the health maintenance organization’s management decisions or utilization review provisions 11
2275	2275	for any patient. 12
2276	2276	27-41-16. Examination. 13
2277	2277	(a) The director of business regulation may make an examination of the affairs of any health 14
2278	2278	maintenance organization and the providers with whom the organization has contracts, agreements, 15
2279	2279	or other arrangements pursuant to its health care plan as often as is reasonably necessary for the 16
2280	2280	protection of the interests of the people of this state. The examination shall be performed and the 17
2281	2281	associated costs shall be borne by the company in accordance with all the provisions of § 27-13.1 18
2282	2282	chapter 13.1 of this title . 19
2283	2283	(b) The director of health may make an examination concerning the quality of health care 20
2284	2284	services of any health maintenance organization and the providers with whom the organization has 21
2285	2285	contracts, agreements, or other arrangements as often as is reasonably necessary for the protection 22
2286	2286	of the interests of the people of this state. 23
2287	2287	(c) Each health maintenance organization shall establish and maintain on an ongoing basis 24
2288	2288	a quality assurance program which involves the assessment of all quality assurance activities 25
2289	2289	conducted in the provision of its health care services to its subscribers, which shall include no less 26
2290	2290	than: 27
2291	2291	(1) Assessment of health outcomes; 28
2292	2292	(2) Ongoing review of health services by physicians and other health professionals; and 29
2293	2293	(3) Utilization and systematic data collection. 30
2294	2294	(d) Every health maintenance organization and provider shall submit its books and records 31
2295	2295	to those examinations and in every way facilitate them. For the purpose of examinations, the 32
2296	2296	director of business regulation and the director of health may administer oaths to, and examine, the 33
2297	2297	officers and agents of the health maintenance organization and the principals of their providers 34
2298	2298
2299	2299
2300	2300	LC002603 - Page 63 of 137
2301	2301	concerning their business. 1
2302	2302	(e) The expenses of examinations under this section shall be assessed against the 2
2303	2303	organization being examined and remitted to the director of the department for whom the 3
2304	2304	examination is being conducted. The total cost of those examinations, whether made by the director 4
2305	2305	of business regulation or by the director of health, shall be borne by the examined health 5
2306	2306	maintenance organizations and shall be in the same amount as provided for in § 27-13-1, and shall 6
2307	2307	be paid to the director of the department conducting the examination for deposit as general 7
2308	2308	revenues. That assessment shall be in addition to any taxes and fees payable to the state. In instances 8
2309	2309	where the examination is performed by outside accountants, the expenses of the examination shall 9
2310	2310	be borne by the examined health maintenance organization. 10
2311	2311	(f) In lieu of any state examination, the director of business regulation or the director of 11
2312	2312	health may accept the report of an examination made by the director of business regulation or the 12
2313	2313	director of health of another state. 13
2314	2314	27-41-18.1. Summary orders and supervision. 14
2315	2315	(a) Whenever the director determines that the financial condition of a health maintenance 15
2316	2316	organization is such that its continued operation must be hazardous to its enrollees, creditors, or the 16
2317	2317	general public, or that it has violated any provision of this act chapter, the director may, after 17
2318	2318	notice and hearing, order the health maintenance organization to take action reasonably necessary 18
2319	2319	to rectify the condition or violation, including, but not limited to, one or more of the following: 19
2320	2320	(1) Reduce the total amount of present and potential liability for benefits by reinsurance or 20
2321	2321	other method acceptable to the director; 21
2322	2322	(2) Reduce the volume of new business being accepted; 22
2323	2323	(3) Reduce expenses by specified methods; 23
2324	2324	(4) Suspend or limit the writing of new business for a period of time; 24
2325	2325	(5) Increase the health maintenance organization’s capital and surplus by contribution; 25
2326	2326	(6) Initiate administrative supervision proceedings against the health maintenance 26
2327	2327	organization in accordance with chapter 14.1 of this title; or 27
2328	2328	(7) Take other steps the director may deem appropriate under the circumstances. 28
2329	2329	(b) For purposes of this section, the violation by a health maintenance organization of any 29
2330	2330	law of this state to which the health maintenance organization is subject shall be deemed a violation 30
2331	2331	of this act chapter. 31
2332	2332	(c) The director is authorized to adopt regulations to set uniform standards and criteria for 32
2333	2333	early warning that the continued operation of any health maintenance organization might be 33
2334	2334	hazardous to its enrollees, creditors, or the general public and to set standards for evaluating the 34
2335	2335
2336	2336
2337	2337	LC002603 - Page 64 of 137
2338	2338	financial condition of any health maintenance organization. 1
2339	2339	(d) The remedies and measures available to the director under this section shall be in 2
2340	2340	addition to, and not in lieu of, the remedies and measures available to the director under the 3
2341	2341	provisions of chapters 14.1, 14.2 and 14.3 of this title. 4
2342	2342	27-41-21. Penalties and enforcement. 5
2343	2343	(a) The director of business regulation may, in lieu of the suspension or revocation of a 6
2344	2344	license under § 27-41-17, levy an administrative penalty in an amount not less than five hundred 7
2345	2345	dollars ($500) nor more than fifty thousand dollars ($50,000), if reasonable notice in writing is 8
2346	2346	given of the intent to levy the penalty and the health maintenance organization has a reasonable 9
2347	2347	time in which to remedy the defect in its operations which gave rise to the penalty citation. The 10
2348	2348	director of business regulation may augment this penalty by an amount equal to the sum that the 11
2349	2349	director calculates to be the damages suffered by enrollees or other members of the public. 12
2350	2350	(b) Any person who violates this chapter shall be guilty of a misdemeanor and may be 13
2351	2351	punished by a fine not to exceed five hundred dollars ($500) or by imprisonment for a period not 14
2352	2352	exceeding one year, or both. 15
2353	2353	(c)(1) If the director of business regulation or the director of health shall for any reason 16
2354	2354	have cause to believe that any violation of this chapter has occurred or is threatened, the director 17
2355	2355	of business regulation or the director of health may give notice to the health maintenance 18
2356	2356	organization and to their representatives, or other persons who appear to be involved in the 19
2357	2357	suspected violation, to arrange a conference with the alleged violators or their authorized 20
2358	2358	representatives for the purpose of attempting to ascertain the facts relating to the suspected 21
2359	2359	violation, and, in the event it appears that any violation has occurred or is threatened, to arrive at 22
2360	2360	an adequate and effective means of correcting or preventing the violation; 23
2361	2361	(2) Proceedings under this subsection shall be governed by chapter 35 of title 42. 24
2362	2362	(d)(1) The director of business regulation may issue an order directing a health maintenance 25
2363	2363	organization or a representative of a health maintenance organization to cease and desist from 26
2364	2364	engaging in any act or practice in violation of the provisions of this chapter; 27
2365	2365	(2) Within thirty (30) days after service of the order to cease and desist, the respondent may 28
2366	2366	request a hearing on the question of whether acts or practices in violation of this chapter have 29
2367	2367	occurred. Those hearings shall be conducted pursuant to §§ 42-35-9 — 42-35-13, and judicial 30
2368	2368	review shall be available as provided by §§ 42-35-15 and 42-35-16. 31
2369	2369	(e) In the case of any violation of the provisions of this chapter, if the director of business 32
2370	2370	regulation elects not to issue a cease and desist order, or in the event of noncompliance with a cease 33
2371	2371	and desist order issued pursuant to subsection (d) of this section, the director of business regulation 34
2372	2372
2373	2373
2374	2374	LC002603 - Page 65 of 137
2375	2375	may institute a proceeding to obtain injunctive relief, or seeking other appropriate relief, in the 1
2376	2376	superior court for the county of Providence. 2
2377	2377	(f) Notwithstanding any other provisions of this act chapter, if a health maintenance 3
2378	2378	organization fails to comply with the net worth, risk based capital or any other requirement of this 4
2379	2379	title related to the solvency of the health maintenance organization, the director is authorized to 5
2380	2380	take appropriate action to assure that the continued operation of the health maintenance 6
2381	2381	organization will not be hazardous to its enrollees or the public. 7
2382	2382	27-41-49.1. Third party reimbursement for services of registered nurse first 8
2383	2383	assistants. 9
2384	2384	(a) Every individual or group health insurance contract, plan or policy delivered, issued or 10
2385	2385	renewed by an insurer, health maintenance organization, nonprofit or for profit health service 11
2386	2386	corporation which provides benefits to individual subscribers and members within the state, or to 12
2387	2387	all group members having a principal place of employment within the state, shall provide benefits 13
2388	2388	for services rendered by a registered nurse first assistant designed designated as such; provided, 14
2389	2389	that the following conditions are met: 15
2390	2390	(1) The registered nurse first assistant provides certain health care services under the 16
2391	2391	supervision of a licensed physician; is currently licensed as a registered nurse in Rhode Island; has 17
2392	2392	successfully completed a course in preparing the registered nurse as a first assistant in accordance 18
2393	2393	with the Association of Operating Room Nurses core curriculum guide for the registered nurse first 19
2394	2394	assistant and includes a minimum of one academic year in a college or university with didactic 20
2395	2395	instruction and clinical internship programs; and is certified in perioperative nursing by the 21
2396	2396	Certification Board of Perioperative Nursing (minimum of two years perioperative experience); 22
2397	2397	(2) The policy or contract, currently provides benefits for identical services rendered by a 23
2398	2398	provider of health care licensed by the state; and 24
2399	2399	(3) The registered nurse first assistant is not a salaried employee of the licensed hospital or 25
2400	2400	facility for which the health maintenance organization has an alternative contractual relationship to 26
2401	2401	fund the services of a registered nurse first assistant. 27
2402	2402	(b) It remains within the sole discretion of the health maintenance organization as to which 28
2403	2403	registered nurse first assistant it contracts with. Reimbursement provided according to the 29
2404	2404	respective principles and policies of the health maintenance organization; provided, that no health 30
2405	2405	maintenance organization is required to provide direct reimbursement, or pay for duplicative 31
2406	2406	services actually rendered by a registered nurse first assistant and any other health care provider. 32
2407	2407	Nothing contained in this section precludes the health maintenance organization from conducting 33
2408	2408	managed care, medical necessity or utilization review. 34
2409	2409
2410	2410
2411	2411	LC002603 - Page 66 of 137
2412	2412	27-41-68. Coverage for early intervention services. 1
2413	2413	(a) Every individual or group hospital or medical expense insurance policy or contract 2
2414	2414	providing coverage for dependent children, delivered or renewed in this state on or after July 1, 3
2415	2415	2004, shall include coverage of early intervention services which coverage shall take effect no later 4
2416	2416	than January 1, 2005. Such coverage shall be limited to a benefit of five thousand dollars ($5,000) 5
2417	2417	per dependent child per policy or calendar year and shall not be subject to deductibles and 6
2418	2418	coinsurance factors. Any amount paid by an insurer under this section for a dependent child shall 7
2419	2419	not be applied to any annual or lifetime maximum benefit contained in the policy or contract. For 8
2420	2420	the purpose of this section, “early intervention services” means, but is not limited to, speech and 9
2421	2421	language therapy, occupational therapy, physical therapy, evaluation, case management, nutrition, 10
2422	2422	service plan development and review, nursing services, and assistive technology services and 11
2423	2423	devices for dependents from birth to age three (3) who are certified by the department of human 12
2424	2424	services as eligible for services under part C of the Individuals with Disabilities Education Act (20 13
2425	2425	U.S.C. § 1471 et seq.) (20 U.S.C. § 1431 et seq.). 14
2426	2426	(b) Subject to the annual limits provided in this section, insurers shall reimburse certified 15
2427	2427	early intervention providers, who are designated as such by the Department of Human Services, for 16
2428	2428	early intervention services as defined in this section at rates of reimbursement equal to or greater 17
2429	2429	than the prevailing integrated state/Medicaid rate for early intervention services as established by 18
2430	2430	the Department of Human Services. 19
2431	2431	(c) This section shall not apply to insurance coverage providing benefits for: (1) hospital 20
2432	2432	confinement indemnity; (2) disability income; (3) accident only; (4) long-term care; (5) Medicare 21
2433	2433	supplement; (6) limited benefit health; (7) specified disease indemnity; (8) sickness or bodily injury 22
2434	2434	or death by accident or both; and (9) other limited benefit policies. 23
2435	2435	27-41-70. Tobacco cessation programs. 24
2436	2436	(a) Every individual or group health insurance contract, plan or policy delivered, issued for 25
2437	2437	delivery or renewed in this state on or after January 1, 2010, which provides medical coverage that 26
2438	2438	includes coverage for physician services in a physician’s office, and every policy which provides 27
2439	2439	major medical or similar comprehensive-type coverage, shall include coverage for smoking 28
2440	2440	cessation treatment, provided that if such medical coverage does not include prescription drug 29
2441	2441	coverage, such contract, plan or policy shall not be required to include coverage for FDA approved 30
2442	2442	smoking cessation medications. 31
2443	2443	(b) As used in this section, smoking cessation treatment includes the use of an over-the-32
2444	2444	counter (OTC) or prescription US Food and Drug Administration (FDA) approved smoking 33
2445	2445	cessation medication, when used in accordance with FDA approval, for not more than two (2) 34
2446	2446
2447	2447
2448	2448	LC002603 - Page 67 of 137
2449	2449	courses of medication of up to fourteen (14) weeks each, annually, when recommended and 1
2450	2450	prescribed by a prescriber who holds prescriptive privileges in the state in which they are licensed, 2
2451	2451	and used in combination with an annual outpatient benefit of sixteen (16) one-half (½) hour 3
2452	2452	evidence based smoking cessation counseling sessions provided by a qualified practitioner for each 4
2453	2453	covered individual. Smoking cessation treatment may be redefined through regulation promulgated 5
2454	2454	by the health insurance commissioner in accordance with the most current clinical practice 6
2455	2455	guidelines sponsored by the United States department of health and human services or its 7
2456	2456	component agencies. 8
2457	2457	(c) Health insurance contracts, plans, or policies to which this section applies, may impose 9
2458	2458	copayments and/or deductibles for the benefits mandated by this section consistent with the 10
2459	2459	contracts’, plans’ or policies’ copayments and/or deductibles for physician services and 11
2460	2460	medications. Nothing contained in this section shall impact the reimbursement, medical necessity 12
2461	2461	or utilization review, managed care, or case management practices of these health insurance 13
2462	2462	contracts, plans or policies. 14
2463	2463	(d) This section shall not apply to insurance coverage providing benefits for: 15
2464	2464	(1) Hospital confinement indemnity; 16
2465	2465	(2) Disability income; 17
2466	2466	(3) Accident only; 18
2467	2467	(4) Long-term care; 19
2468	2468	(5) Medicare supplement; 20
2469	2469	(6) Limited benefit health; 21
2470	2470	(7) Specified disease indemnity; 22
2471	2471	(8) Sickness or bodily injury or death by accident or both; and 23
2472	2472	(9) Other limited benefit policies. 24
2473	2473	SECTION 15. Sections 27-44-2, 27-44-4.1 and 27-44-6 of the General Laws in Chapter 25
2474	2474	27-44 entitled "Casualty, Liability and Fire and Marine Insurance Rating" are hereby amended to 26
2475	2475	read as follows: 27
2476	2476	27-44-2. Definitions. 28
2477	2477	As used in this chapter: 29
2478	2478	(a)(1) “Advisory organization” means any person or organization other than a rating 30
2479	2479	organization which assists insurers in the authorized activities enumerated in § 27-44-11, except no 31
2480	2480	advisory organization may make any filings on behalf of insurers. 32
2481	2481	(b)(2) “Competitive market” means a market that has not been found to be noncompetitive 33
2482	2482	pursuant to § 27-44-4. 34
2483	2483
2484	2484
2485	2485	LC002603 - Page 68 of 137
2486	2486	(c)(3) “Director” means the director of department of business regulation. 1
2487	2487	(d)(4) “Market” means the interaction between buyers and sellers consisting of a product 2
2488	2488	market component. A product market component consists of identical or readily substitutable 3
2489	2489	products including, but not limited to, consideration of coverage, policy terms, rate classifications, 4
2490	2490	and underwriting. A geographic market component is a geographical area in which buyers have a 5
2491	2491	reasonable degree of access to the insurance product through sales outlets and other marketing 6
2492	2492	mechanisms. Determination of a geographic market component shall consider existing marketing 7
2493	2493	patterns. 8
2494	2494	(e)(5) “Noncompetitive market” means a market for which there is a ruling in effect 9
2495	2495	pursuant to § 27-44-4 that a reasonable degree of competition does not exist. 10
2496	2496	(f)(6) “Pool” means a voluntary arrangement, established on an on-going basis, pursuant 11
2497	2497	to which two (2) or more insurers participate in the sharing of risks on a predetermined basis. The 12
2498	2498	pool may operate through an association, syndicate, or other pooling agreement. 13
2499	2499	(g)(7) “Rating organization” means any entity which either has two (2) or more member 14
2500	2500	insurers or is controlled either directly or indirectly by two (2) or more insurers and which assists 15
2501	2501	insurers in ratemaking. Two (2) or more insurers having a common ownership or operating in this 16
2502	2502	state under common management or control constitute a single insurer for the purpose of this 17
2503	2503	definition. 18
2504	2504	(h)(8) “Residual market mechanism” means an arrangement, either voluntary or mandated 19
2505	2505	by law, involving participation by insurers in the equitable apportionment among them of insurance 20
2506	2506	which may be afforded applicants who are unable to obtain insurance through ordinary methods. 21
2507	2507	(i)(9) “Supplementary rate information” includes any manual or plan of rates, 22
2508	2508	classification, rating schedule, minimum premium, policy fee, rating rule, and any other similar 23
2509	2509	information needed to determine the applicable rate in effect or to be in effect. 24
2510	2510	(j)(10) “Supporting information” means: (1)(i) the experience and judgment of the filer 25
2511	2511	and the experience or data of other insurers or organizations relied upon by the filer; (2)(ii) the 26
2512	2512	interpretation of any statistical data relied upon by the filer; and (3)(iii) description of methods used 27
2513	2513	in making the rates, and other similar information required by the director to be filed. 28
2514	2514	27-44-4.1. Approval of policies. 29
2515	2515	(a) Every insurance company and every rating/advisory organization issuing policies 30
2516	2516	covering casualty, liability and fire and marine insurance provided for in this chapter shall file with 31
2517	2517	the director a copy of the form of the policies the company or organization is proposing to use. 32
2518	2518	A policy may not be issued until the director has approved the form. 33
2519	2519	(b) Any policy form, subject to this chapter and filed by an insurer or rating/advisory 34
2520	2520
2521	2521
2522	2522	LC002603 - Page 69 of 137
2523	2523	organization on behalf of its members or subscribers with the director, shall be deemed public 1
2524	2524	information at the time of filing. 2
2525	2525	27-44-6. Filing of rates and other rating information. 3
2526	2526	(a) Filings as to competitive markets; file and use. In a competitive market, every insurer 4
2527	2527	shall file with the director all rates and supplementary rate information to be used in this state. At 5
2528	2528	the time the rates are filed, the filing shall state the specific model(s) used (catastrophic risk 6
2529	2529	planning), and explain the manner in which each model was used to determine the filed rate. The 7
2530	2530	rates and supplementary rate information shall be filed at least thirty (30) days prior to the proposed 8
2531	2531	effective date. At the end of that time, the rates may be used if no disapproval order or request for 9
2532	2532	supporting information has been issued by the director. If the director finds that an insurer’s rates 10
2533	2533	require closer review because of an insurer’s financial condition, or upon any other grounds as the 11
2534	2534	director may consider harmful to the public interest including, but not limited to, excessiveness, 12
2535	2535	inadequacy, or unfair discrimination, the director may request supporting information as needed. If 13
2536	2536	the director requests the further information, the rates may not be made effective until thirty (30) 14
2537	2537	days after the information has been received by the director. 15
2538	2538	(b) Filings as to noncompetitive markets. Nothing contained in this chapter shall be 16
2539	2539	construed to abrogate or supersede any statute or regulation governing either classes of business 17
2540	2540	identified in § 27-44-3, or deemed noncompetitive pursuant to the provisions of this chapter. Those 18
2541	2541	classes of business and noncompetitive markets shall have rates established pursuant to the 19
2542	2542	standards and procedures applicable under chapters 6, 7.1, 9, 19, and 20 of this title, and chapter 20
2543	2543	62 of title 42. 21
2544	2544	(c) Requirement of director. Rates shall be filed in the form and manner prescribed by the 22
2545	2545	director. 23
2546	2546	(d) Rating organization. Any insurer may discharge its obligation under this section by 24
2547	2547	giving notice to the director that it uses rates and supplementary rate information prepared and filed 25
2548	2548	by a designated rating organization of which it is a member or subscriber. The insurer’s rates and 26
2549	2549	supplementary rate information shall be those filed by the rating organization, including any 27
2550	2550	amendments, subject to modifications filed by the insurer. 28
2551	2551	(e) Consent to rate. Upon the written consent of the insured, stating the reasons for consent 29
2552	2552	and filed with the director, a rate in excess of that provided by an otherwise applicable filing may 30
2553	2553	be used on any specific risk. A rate greater than that applicable to the insured under a residual 31
2554	2554	market mechanism may not be used unless approved by the director. 32
2555	2555	(f) Filings open to inspection. All rates, supplementary rate information, and any 33
2556	2556	supporting information for rates filed under this act chapter shall, as soon as filed, be open to 34
2557	2557
2558	2558
2559	2559	LC002603 - Page 70 of 137
2560	2560	public inspection at any reasonable time. Copies may be obtained by any person on request and 1
2561	2561	upon payment of a reasonable charge. 2
2562	2562	SECTION 16. Section 27-46-2 of the General Laws in Chapter 27-46 entitled "Risk 3
2563	2563	Retention Act" is hereby amended to read as follows: 4
2564	2564	27-46-2. Definitions. 5
2565	2565	As used in this chapter: 6
2566	2566	(1) “Commissioner” means the director of the department of business regulation or the 7
2567	2567	commissioner, director, or superintendent of insurance in any other state; 8
2568	2568	(2) “Completed operations liability” means liability arising out of the installation, 9
2569	2569	maintenance, or repair of any product at a site which is not owned or controlled by: 10
2570	2570	(i) Any person who performs that work; or 11
2571	2571	(ii) Any person who hires an independent contractor to perform that work; but shall include 12
2572	2572	liability for activities which are completed or abandoned before the date of the occurrence giving 13
2573	2573	rise to the liability; 14
2574	2574	(3) “Domicile”, for the purposes of determining the state in which a purchasing group is 15
2575	2575	domiciled, means: 16
2576	2576	(i) For a corporation, the state in which the purchasing group is incorporated; and 17
2577	2577	(ii) For an unincorporated entity, the state of its principal place of business; 18
2578	2578	(4) “Hazardous financial condition” means that, based on its present or reasonably 19
2579	2579	anticipated financial condition, a risk retention group, although not yet financially impaired or 20
2580	2580	insolvent, is unlikely to be able: 21
2581	2581	(i) To meet obligations to policyholders with respect to known claims and reasonably 22
2582	2582	anticipated claims; or 23
2583	2583	(ii) To pay other obligations in the normal course of business; 24
2584	2584	(5) “Insurance” means primary insurance, excess insurance, reinsurance, surplus lines 25
2585	2585	insurance, and any other arrangement for shifting and distributing risk, which is determined to be 26
2586	2586	insurance under the laws of this state; 27
2587	2587	(6) “Liability”: 28
2588	2588	(i) Means legal liability for damages, including costs of defense, legal costs and fees, and 29
2589	2589	other claims expenses, because of injuries to other persons, damage to their property, or other 30
2590	2590	damage or loss to other persons resulting from or arising out of: 31
2591	2591	(A) Any business whether profit or nonprofit, trade, product, services including 32
2592	2592	professional services, premises, or operations; or 33
2593	2593	(B) Any activity of any state or local government, or any agency or political subdivision 34
2594	2594
2595	2595
2596	2596	LC002603 - Page 71 of 137
2597	2597	of any state or local government; and 1
2598	2598	(ii) Does not include personal risk liability and an employer’s liability with respect to its 2
2599	2599	employees other than legal liability under 45 U.S.C. § 51 et seq.; 3
2600	2600	(7) “Personal risk liability” means liability for damages because of injury to any person, 4
2601	2601	damage to property, or other loss or damage resulting from any personal, familial, or household 5
2602	2602	responsibilities or activities, rather than from responsibilities or activities referred to in subdivision 6
2603	2603	(6) of this section; 7
2604	2604	(8) “Plan of operation or a feasibility study” means an analysis which presents the expected 8
2605	2605	activities and results of a risk retention group including, at a minimum: 9
2606	2606	(i) Information sufficient to verify that its members are engaged in businesses or activities 10
2607	2607	similar or related with respect to the liability to which the members are exposed by virtue of any 11
2608	2608	related, similar, or common business, trade, product, services, premises or operations; 12
2609	2609	(ii) For each state in which it intends to operate, the coverages, deductibles, coverage limits, 13
2610	2610	rates, and rating classification systems for each line of insurance the group intends to offer; 14
2611	2611	(iii) Historical and expected loss experience of the proposed members and national 15
2612	2612	experience of similar exposures to the extent that this experience is reasonably available; 16
2613	2613	(iv) Pro forma financial statements and projections; 17
2614	2614	(v) Appropriate opinions by a qualified, independent casualty actuary, including a 18
2615	2615	determination of minimum premium or participation levels required to commence operations and 19
2616	2616	to prevent a hazardous financial condition; 20
2617	2617	(vi) Identification of management, underwriting, and claims procedures, marketing 21
2618	2618	methods, managerial oversight methods, investment policies, and reinsurance agreements; 22
2619	2619	(vii) Identification of each state in which the risk retention group has obtained, or sought 23
2620	2620	to obtain, a charter and license, and a description of its status in each state; and 24
2621	2621	(viii) Any other matters that may be prescribed by the commissioner of the state in which 25
2622	2622	the risk retention group is chartered for liability insurance companies authorized by the insurance 26
2623	2623	laws of that state; 27
2624	2624	(9) “Product liability” means liability for damages because of any personal injury, death, 28
2625	2625	emotional harm, consequential economic damage, or property damage, including damages 29
2626	2626	resulting from the loss of use of property, arising out of the manufacturer, design, importation, 30
2627	2627	distribution, packaging, labeling, lease, or sale of a product, but does not include the liability of any 31
2628	2628	person for those damages if the product involved was in the possession of the person when the 32
2629	2629	incident giving rise to the claim occurred; 33
2630	2630	(10) “Purchasing group” means any group which: 34
2631	2631
2632	2632
2633	2633	LC002603 - Page 72 of 137
2634	2634	(i) Has as one of its purposes the purchase of liability insurance on a group basis; 1
2635	2635	(ii) Purchases the insurance only for its group members and only to cover their similar or 2
2636	2636	related liability exposure, as described in subdivision (10)(iii); 3
2637	2637	(iii) Is composed of members whose business or activities are similar or related with respect 4
2638	2638	to the liability to which members are exposed by virtue of any related, similar, or common business, 5
2639	2639	trade, product, services, premises or operations; and 6
2640	2640	(iv) Is domiciled in any state; 7
2641	2641	(11) “Risk retention group” means any corporation or other limited liability association: 8
2642	2642	(i) Whose primary activity consists of assuming and spreading all, or any portion, of the 9
2643	2643	liability exposure of its group members; 10
2644	2644	(ii) Which is organized for the primary purpose of conducting the activity described under 11
2645	2645	paragraph (i) of this subdivision; 12
2646	2646	(iii) Which: 13
2647	2647	(A) Is chartered and licensed as a liability insurance company and authorized to engage in 14
2648	2648	the business of insurance under the laws of any state; or 15
2649	2649	(B) Before January 1, 1985, was chartered or licensed and authorized to engage in the 16
2650	2650	business of insurance under the laws of Bermuda or the Cayman Islands and, before that date, had 17
2651	2651	certified to the insurance commissioner of at least one state that it satisfied the capitalization 18
2652	2652	requirements of that state, except that the group shall be considered to be a risk retention group 19
2653	2653	only if it has been engaged in business continuously since that date and only for the purpose of 20
2654	2654	continuing to provide insurance to cover product liability or completed operations liability, as the 21
2655	2655	terms were defined in the Product Liability Risk Retention Act of 1981 before the date of the 22
2656	2656	enactment of the Liability Risk Retention Act of 1986, 15 U.S.C. § 3901 et seq.; 23
2657	2657	(iv) That does not exclude any person from membership in the group solely to provide for 24
2658	2658	members of the group a competitive advantage over the person; 25
2659	2659	(v) Which: 26
2660	2660	(A) Has as its owners only persons who comprise the membership of the risk retention 27
2661	2661	group and who are provided insurance by the group; or 28
2662	2662	(B) Has as its sole owner an organization which has as: 29
2663	2663	(I) Its members only persons who comprise the membership of the risk retention group; 30
2664	2664	and 31
2665	2665	(II) Its owners only persons who comprise the membership of the risk retention group and 32
2666	2666	who are provided insurance by the group; 33
2667	2667	(vi) Whose members are engaged in businesses or activities similar or related with respect 34
2668	2668
2669	2669
2670	2670	LC002603 - Page 73 of 137
2671	2671	to the liability of which the members are exposed by virtue of any related, similar, or common 1
2672	2672	business, trade, product, services, premises, or operations; 2
2673	2673	(vii) Whose activities do not include the provision of insurance other than: 3
2674	2674	(A) Liability insurance for assuming and spreading all or any portion of the liability of its 4
2675	2675	group members; and 5
2676	2676	(B) Reinsurance with respect to the liability of any other risk retention group or any 6
2677	2677	members of the other group which is engaged in business or activities so that the group or member 7
2678	2678	meets the requirement described in subdivision (vi) from membership in the risk retention group 8
2679	2679	which provides the reinsurance; and 9
2680	2680	(viii) The name of which includes the phrase “risk retention group”; and 10
2681	2681	(12) “State” means any state of the United States or the District of Columbia. 11
2682	2682	SECTION 17. Section 27-47-1 of the General Laws in Chapter 27-47 entitled "Criminal 12
2683	2683	Sanctions for Failure to Report Impairment" is hereby amended to read as follows: 13
2684	2684	27-47-1. Definitions. 14
2685	2685	As used in this chapter: 15
2686	2686	(a) “Chief executive officer” is the person, irrespective of his or her title, designated by the 16
2687	2687	board of directors or trustees of an insurer as the person charged with the responsibility of 17
2688	2688	administering and implementing the insurer’s policies and procedures. 18
2689	2689	(b) “Commissioner” means the commissioner of insurance or the commissioner’s 19
2690	2690	equivalent of the state of domicile of any insurer. 20
2691	2691	(c) “Impaired” is a financial situation in which the assets of an insurer are less than the sum 21
2692	2692	of the insurer’s minimum required capital, minimum required surplus and all liabilities as 22
2693	2693	determined in accordance with the requirements for the preparation and filing of the annual 23
2694	2694	statement of an insurer under chapter 12 of this title. 24
2695	2695	(d) “Insurer” means any insurance company or other insurer licensed to do business in this 25
2696	2696	state. 26
2697	2697	SECTION 18. Section 27-49-2 of the General Laws in Chapter 27-49 entitled "Motor 27
2698	2698	Vehicle Theft and Motor Vehicle Insurance Fraud Reporting — Immunity Act" is hereby amended 28
2699	2699	to read as follows: 29
2700	2700	27-49-2. Definitions. 30
2701	2701	As used in this chapter: 31
2702	2702	(a)(1) “Authorized governmental agency” includes: 32
2703	2703	(1)(i) The office of the attorney general; 33
2704	2704	(2)(ii) The state police; 34
2705	2705
2706	2706
2707	2707	LC002603 - Page 74 of 137
2708	2708	(3)(iii) Any police or fire department of a municipality; 1
2709	2709	(4)(iv) The U.S. Attorney’s office for the state of Rhode Island; 2
2710	2710	(5)(v) Any duly constituted criminal investigative department or agency, including the 3
2711	2711	Federal Bureau of Investigation of the United States; 4
2712	2712	(6)(vi) Any solicitor or prosecuting attorney for a municipality; 5
2713	2713	(7)(vii) The director of the insurance division; 6
2714	2714	(8)(viii) The administrator of the division of motor vehicles; and 7
2715	2715	(9)(ix) The office of automobile theft and insurance fraud established by § 31-50-1. 8
2716	2716	(b)(2) “Insured” means a person, corporation, or other entity for which automobile 9
2717	2717	insurance coverage is provided by an insurer. 10
2718	2718	(c)(3) “Insurer” means any domestic insurer or foreign insurer, licensed to provide 11
2719	2719	automobile insurance coverage pursuant to the provisions of this title, or otherwise liable for any 12
2720	2720	loss due to motor vehicle theft or motor vehicle insurance fraud. 13
2721	2721	(d)(4) “Relevant” means having a tendency to make the existence of any fact that is of 14
2722	2722	consequence to the investigation or determination of the issue more probable or less probable than 15
2723	2723	it would be without the information. 16
2724	2724	SECTION 19. Section 27-51-5 of the General Laws in Chapter 27-51 entitled "Managing 17
2725	2725	General Agents Act" is hereby amended to read as follows: 18
2726	2726	27-51-5. Duties of insurers. 19
2727	2727	(a) The insurer shall have on file an independent financial examination, in a form 20
2728	2728	acceptable to the commissioner, of each MGA with which it has done business. 21
2729	2729	(b) If an MGA establishes loss reserves, the insurer shall annually obtain the opinion of an 22
2730	2730	actuary attesting to the adequacy of loss reserves established for losses incurred and outstanding 23
2731	2731	on business produced by the MGA. This is in addition to any other required loss reserve 24
2732	2732	certification. 25
2733	2733	(c) The insurer shall periodically, at least semiannually, conduct an onsite review of the 26
2734	2734	underwriting and claims processing operations of the MGA. 27
2735	2735	(d) Binding authority for all reinsurance contracts or participation in insurance or 28
2736	2736	reinsurance syndicates shall rest with an officer of the insurer, who shall not be affiliated with the 29
2737	2737	MGA. 30
2738	2738	(e) Within thirty (30) days of entering into or termination of a contract with an MGA, the 31
2739	2739	insurer shall provide written notification of the appointment or termination to the commissioner. 32
2740	2740	Notices of appointment of an MGA shall include a statement of duties which the applicant is 33
2741	2741	expected to perform on behalf of the insurer, the lines of insurance for which the applicant is to be 34
2742	2742
2743	2743
2744	2744	LC002603 - Page 75 of 137
2745	2745	authorized to act, and any other information the commissioner may request. 1
2746	2746	(f) An insurer shall review its books and records each quarter to determine if any producer 2
2747	2747	has become an MGA by virtue of the provisions of this chapter. If the insurer determines that a 3
2748	2748	producer has become a MGA pursuant to the provisions of this chapter, the insurer shall promptly 4
2749	2749	notify the producer and the commissioner of the determination and the insurer and producer must 5
2750	2750	fully comply with the provisions of this chapter within thirty (30) days. 6
2751	2751	(g) An insurer shall not appoint to its board of directors an officer, director, employee, 7
2752	2752	subproducer, or controlling shareholder of its MGAs. This subsection shall not apply to 8
2753	2753	relationships governed by chapter 35 of this title, or, if applicable, chapter 48 of title 27 the Broker 9
2754	2754	Controlled Insurer Act Business Transacted with Producer Controlled Property/Casualty 10
2755	2755	Insurer Act. 11
2756	2756	SECTION 20. Section 27-61-5 of the General Laws in Chapter 27-61 entitled "Unfair 12
2757	2757	Discrimination Against Subjects of Abuse in Life Insurance Act" is hereby amended to read as 13
2758	2758	follows: 14
2759	2759	27-61-5. Justification of adverse insurance decisions. 15
2760	2760	An insurer of an individual or group policy that takes an underwriting action that adversely 16
2761	2761	affects a subject of abuse on the basis of a medical condition that the insurer knows is abuse-related 17
2762	2762	shall explain the reason for its action to the applicant or insured in writing and shall be able to 18
2763	2763	demonstrate that its action: 19
2764	2764	(1) Does not treat abuse status as a medical condition; 20
2765	2765	(2) Is permissible by law and applies in the same manner and to the same extent to all 21
2766	2766	applicants and the insured with a similar medical condition without regard to whether the condition 22
2767	2767	or claims claim is abuse-related; and 23
2768	2768	(3) Is based on a determination, made in conformance with sound actuarial principles or 24
2769	2769	related actual or reasonably anticipated experience, that there is a correlation between the medical 25
2770	2770	condition and a material increase in insurance risk. 26
2771	2771	SECTION 21. Section 27-64-9 of the General Laws in Chapter 27-64 entitled "The 27
2772	2772	Protected Cell Companies Act" is hereby amended to read as follows: 28
2773	2773	27-64-9. Remuneration of receivers. 29
2774	2774	(a) With respect to orders of rehabilitation, conservation or liquidation directed at a 30
2775	2775	protected cell company, the remuneration, expenses, and other compensation of the receiver shall 31
2776	2776	be payable from the assets of the company’s general account, in accordance with the priority of 32
2777	2777	distribution set forth in §§ 27-14.3-46 and 27-14.4-22 27-14.4-20. 33
2778	2778	(b) With respect to orders of rehabilitation, conservation or liquidation directed at a 34
2779	2779
2780	2780
2781	2781	LC002603 - Page 76 of 137
2782	2782	protected cell, the remuneration, expenses, and other compensation of the receiver shall be payable 1
2783	2783	from the protected cell assets attributable to that protected cell. In the case where more than one 2
2784	2784	protected cell is the subject of the order, the receiver shall account for remuneration, expenses, and 3
2785	2785	other compensation separately for each protected cell in accordance with actual time and expenses 4
2786	2786	attributable to the rehabilitation, conservation or liquidation of each respective protected cell. 5
2787	2787	(c) With respect to orders of rehabilitation, conservation or liquidation directed at a 6
2788	2788	protected cell company during a pending rehabilitation, conservation or liquidation of one or more 7
2789	2789	protected cells, the remuneration, expenses, and other compensation of the receiver of the protected 8
2790	2790	cells shall be satisfied from the protected cell assets of the protected cell or cells in accordance with 9
2791	2791	the provisions of subsection (b) of this section, and the remuneration, expenses, and other 10
2792	2792	compensation of the receiver of the protected cell company shall be satisfied from the assets of the 11
2793	2793	company’s general account. 12
2794	2794	SECTION 22. Section 27-65-1 of the General Laws in Chapter 27-65 entitled "Commercial 13
2795	2795	Special Risks" is hereby amended to read as follows: 14
2796	2796	27-65-1. Commercial special risks. 15
2797	2797	(a) Commercial special risks. Notwithstanding any other provisions of this title to the 16
2798	2798	contrary and except as limited in subsection (b) of this section, insurers shall not be required to file 17
2799	2799	with, nor to receive approval from, the insurance division of the department of business regulation 18
2800	2800	for policy forms or rates used in the insurance of commercial special risks located in this state. 19
2801	2801	Commercial special risks are defined as: 20
2802	2802	(1) Risks written as commercial lines insurance, defined as insurance issued for purposes 21
2803	2803	other than for personal, family, or household and that are written on an excess or umbrella basis; 22
2804	2804	(2) Those risks, or portions of them, written as commercial lines insurance, defined as 23
2805	2805	insurance issued for purposes other than for personal, family, or household and that are not rated 24
2806	2806	according to manuals, rating plans, or schedules including “A” rates; 25
2807	2807	(3) Risks written as commercial lines insurance that employ or retain the services of a “risk 26
2808	2808	manager” and that also meet any one of the following criteria: 27
2809	2809	(i) Net worth over ten million dollars ($10,000,000); 28
2810	2810	(ii) Net revenue/sales of over five million dollars ($5,000,000); 29
2811	2811	(iii) More than twenty-five (25) employees per individual company or fifty (50) employees 30
2812	2812	per holding company in the aggregate; 31
2813	2813	(iv) Aggregates Aggregate premiums of over thirty thousand dollars ($30,000), excluding 32
2814	2814	group life, group health, workers’ compensation and professional liability (including, but not 33
2815	2815	limited to, errors and omissions and directors and officers liability); 34
2816	2816
2817	2817
2818	2818	LC002603 - Page 77 of 137
2819	2819	(v) Is a not for profit or public entity with an annual budget or assets of at least twenty-five 1
2820	2820	million dollars ($25,000,000); or 2
2821	2821	(vi) Is a municipality with a population of over twenty thousand (20,000); 3
2822	2822	(4) Specifically designated commercial special risks including: 4
2823	2823	(i) All risks classified as highly protected risks. 5
2824	2824	“Highly protected risk” means a fire resistive building that meets the highest standards of 6
2825	2825	fire safety according to insurance company underwriting requirements; 7
2826	2826	(ii) All commercial insurance aviation risks; 8
2827	2827	(iii) All credit property insurance risks that are defined as “insurance of personal property 9
2828	2828	of a commercial debtor against loss, with the creditor as sole beneficiary” or “insurance of personal 10
2829	2829	property of a commercial debtor, with the creditor as primary beneficiary and the debtor as 11
2830	2830	beneficiary of proceeds not paid to the creditor.” For the purposes of this definition, “personal 12
2831	2831	property” means furniture, fixtures, furnishings, appliances, and equipment designed for use in a 13
2832	2832	business, trade, or profession and not used by a debtor for personal or household use; 14
2833	2833	(iv) All boiler and machinery and equipment breakdown risks; 15
2834	2834	(v) All inland marine risks written as commercial lines insurance defined as insurance 16
2835	2835	issued for purposes other than for personal, family, or household; 17
2836	2836	(vi) All fidelity and surety risks; 18
2837	2837	(vii) All crime and burglary and theft risks; and 19
2838	2838	(viii) All directors and officers, fiduciary liability, employment practices liability, kidnap 20
2839	2839	and ransom, and management liability risks. 21
2840	2840	(b) Notwithstanding subsection (a) of this section, the following lines of business shall 22
2841	2841	remain subject to all filing and approval requirements contained in this title even if written for risks 23
2842	2842	which qualify as commercial special risks: 24
2843	2843	(1) Life insurance; 25
2844	2844	(2) Annuities; 26
2845	2845	(3) Accident and health insurance; 27
2846	2846	(4) Automobile insurance that is mandated by statute; 28
2847	2847	(5) Workers’ compensation and employers’ liability insurance; and 29
2848	2848	(6) Issuance through residual market mechanisms. 30
2849	2849	(c) Any insurer that provides coverage to a commercial special risk shall disclose to the 31
2850	2850	insured that forms used and rates charges charged are exempt from filing and approval 32
2851	2851	requirements by this section. Records of all such disclosures shall be maintained by the insurer. 33
2852	2852	(d) Brokers for exempt commercial policyholders as defined in subsection (a)(3) of this 34
2853	2853
2854	2854
2855	2855	LC002603 - Page 78 of 137
2856	2856	section shall be exempt from the due diligence requirements of § 27-3-38(c). 1
2857	2857	(e) Notwithstanding any other provisions of this title, the requirements of § 27-5-2 shall 2
2858	2858	not apply to any policy insuring one or more commercial special risks located in this state. 3
2859	2859	SECTION 23. Sections 27-71-3 and 27-71-5 of the General Laws in Chapter 27-71 entitled 4
2860	2860	"Market Conduct Surveillance Act" are hereby amended to read as follows: 5
2861	2861	27-71-3. Definitions. 6
2862	2862	As used in this chapter: 7
2863	2863	(a) “Commissioner” means the “director of the department of business regulation” or his 8
2864	2864	or her designee. 9
2865	2865	(b) “Complaint” means a written or documented oral communication to the commissioner 10
2866	2866	primarily expressing a grievance, meaning an expression of dissatisfaction. For healthcare 11
2867	2867	companies, a grievance is a written complaint submitted by or on behalf of a covered person. 12
2868	2868	(c) “Comprehensive market conduct examination” means a review of one or more lines of 13
2869	2869	business of an insurer domiciled in this state that is not conducted for cause. The term includes a 14
2870	2870	review of rating, tier classification, underwriting, policyholder service, claims, marketing and sales, 15
2871	2871	producer licensing, complaint handling practices, or compliance procedures and policies. 16
2872	2872	(d) “Market conduct action” means any of the full range of activities that the commissioner 17
2873	2873	may initiate to assess the market and practices of individual insurers, beginning with market 18
2874	2874	analysis and extending to targeted examinations. The commissioner’s activities to resolve an 19
2875	2875	individual consumer complaint or other reports of a specific instance of misconduct are not market 20
2876	2876	conduct actions for purposes of this chapter. 21
2877	2877	(e) “Market analysis” means a process whereby market conduct surveillance personnel 22
2878	2878	collect and analyze information from filed schedules, surveys, required reports and other sources 23
2879	2879	in order to develop a baseline and to identify patterns or practices of insurers licensed to do business 24
2880	2880	in this state that deviate significantly from the norm or that may pose a potential risk to the insurance 25
2881	2881	consumer. 26
2882	2882	(f) “Market conduct examination” means the examination of the insurance operations of 27
2883	2883	an insurer licensed to do business in this state in order to evaluate compliance with the applicable 28
2884	2884	laws and regulations of this state. A market conduct examination may be either a comprehensive 29
2885	2885	examination or a targeted examination. A market conduct examination is separate and distinct from 30
2886	2886	a financial examination of an insurer performed pursuant to the Rhode Island general laws, but may 31
2887	2887	be conducted at the same time. 32
2888	2888	(g) “Market conduct surveillance personnel” means those individuals employed or 33
2889	2889	contracted by the commissioner to collect, analyze, review or act on information on the insurance 34
2890	2890
2891	2891
2892	2892	LC002603 - Page 79 of 137
2893	2893	marketplace, which identifies patterns or practices of insurers. 1
2894	2894	(h) “National Association of Insurance Commissioners” (NAIC) means the organization of 2
2895	2895	insurance regulators from the fifty (50) states, the District of Columbia, and the four U.S. territories. 3
2896	2896	(i) “NAIC” market regulation handbook“ means a handbook, developed and adopted by 4
2897	2897	the NAIC, or successor product, which: 5
2898	2898	(1) outlines Outlines elements and objectives of market analysis and the process by which 6
2899	2899	states can establish and implement market analysis programs; and 7
2900	2900	(2) sets Sets up guidelines that document established practices to be used by market 8
2901	2901	conduct surveillance personnel in developing and executing an examination. 9
2902	2902	(j) “NAIC market conduct uniform examination procedures” means the set of guidelines 10
2903	2903	developed and adopted by the NAIC designed to be used by market conduct surveillance personnel 11
2904	2904	in conducting an examination. 12
2905	2905	(k) “NAIC” standard data request“ means the set of field names and descriptions developed 13
2906	2906	and adopted by the NAIC for use by market conduct surveillance personnel in an examination. 14
2907	2907	(l) “Qualified contract examiner” means a person under contract to the commissioner, who 15
2908	2908	is qualified by education, experience and, where applicable, professional designations, to perform 16
2909	2909	market conduct actions. 17
2910	2910	(m) “Targeted examination” means a focused exam conducted for cause, based on the 18
2911	2911	results of market analysis indicating the need to review either a specific line of business or specific 19
2912	2912	business practices, including but not limited to, underwriting and rating, marketing and sales, 20
2913	2913	complaint handling operations/management, advertising materials, licensing, policyholder 21
2914	2914	services, non-forfeitures, claims handling, or policy forms and filings. A targeted examination may 22
2915	2915	be conducted by desk examination of by an on-site examination: 23
2916	2916	(1) “Desk examination” means a targeted examination that is conducted by an examiner at 24
2917	2917	a location other than the insurer’s premises. A desk examination is usually performed at the 25
2918	2918	department of business regulation’s offices with the insurer providing requested documents by hard 26
2919	2919	copy, microfiche, discs, or other electronic media, for review; and 27
2920	2920	(2) “On-site examination” means a targeted examination conducted at the insurer’s home 28
2921	2921	office or the location where the records under review are stored. 29
2922	2922	(n) “Third-party model or product” means a model or product provided by an entity 30
2923	2923	separate from and not under directed or indirect corporate control of the insurer using the model or 31
2924	2924	product. 32
2925	2925	27-71-5. Market analysis procedures. 33
2926	2926	(a)(1) The commissioner shall gather information as deemed necessary from data currently 34
2927	2927
2928	2928
2929	2929	LC002603 - Page 80 of 137
2930	2930	available, as well as surveys and required reporting requirements, information collected by the 1
2931	2931	NAIC and a variety of other objective sources in both the public and private sectors including law 2
2932	2932	enforcement inquires. 3
2933	2933	(2) Such information, when collected, shall be analyzed in order to develop a baseline 4
2934	2934	understanding of the marketplace and to identify for further review insurers and/or practices that 5
2935	2935	deviate significantly from the norm or that may pose a potential risk to the insurance consumer. 6
2936	2936	The commissioner shall use the NAIC Market Regulation Handbook as one resource in performing 7
2937	2937	this analysis (or procedures, adopted by regulation, that are substantially similar to the foregoing 8
2938	2938	NAIC product). 9
2939	2939	(3) The commissioner shall perform the analysis described under this section by: 10
2940	2940	(i) Identifying key lines of business for systematic review; 11
2941	2941	(ii) Identifying companies for further analysis based on available information. 12
2942	2942	(b) If the analysis compels the commissioner to inquire further into a particular insurer or 13
2943	2943	practice, the following continuum of market conduct actions may be considered prior to conducting 14
2944	2944	a targeted, on-site market conduct examination. The action selected shall be made known to the 15
2945	2945	insurer in writing if the action involves insurer participation or response. These actions may 16
2946	2946	include, but are not limited to: 17
2947	2947	(1) Correspondence with insurer; 18
2948	2948	(2) Insurer interviews; 19
2949	2949	(3) Information gathering; 20
2950	2950	(4) Policy and procedure reviews; 21
2951	2951	(5) Interrogatories; 22
2952	2952	(6) Review of insurer self-evaluation (if not subject to a privilege of confidentiality) and 23
2953	2953	compliance programs, including membership in a best-practice organization; and 24
2954	2954	(7) Desk examinations. 25
2955	2955	(c) The commissioner shall select a market conduct action that is efficient for the 26
2956	2956	department of business regulation and the insurer, while still protecting the insurance consumer. 27
2957	2957	(d) The commissioner shall take those steps reasonably necessary to eliminate requests for 28
2958	2958	information that duplicate information provided as part of an insurer’s annual financial statement, 29
2959	2959	the annual market conduct statement of the National Association of Insurance Commissioners, or 30
2960	2960	other required schedules, surveys, or reports that are regularly submitted to the commissioner, or 31
2961	2961	with data requests made by other states if that information is available to the commissioner, unless 32
2962	2962	the information is state specific, and coordinate market conduct actions and findings with other 33
2963	2963	states. 34
2964	2964
2965	2965
2966	2966	LC002603 - Page 81 of 137
2967	2967	(e) Causes or conditions, if identified through market analysis, that may trigger a target 1
2968	2968	examination, included include but are not limited to: 2
2969	2969	(1) Information obtained from a market conduct annual statement, market survey or report 3
2970	2970	of financial examination indicating potential fraud, that the insurer is conducting the business of 4
2971	2971	insurance without a license or is engaged in a potential pattern of violation of the general laws or 5
2972	2972	law enforcement inquiry. 6
2973	2973	(2) A number of complaints against the insurer or a complaint ratio sufficient to indicate 7
2974	2974	potential fraud, conducting the business of insurance without a license, or a potential pattern of 8
2975	2975	unfair trade practice in violation of the general laws. For the purposes of this section, a complaint 9
2976	2976	ratio shall be determined for each line of business. 10
2977	2977	(3) Information obtained from other objective sources, such as published advertising 11
2978	2978	materials indicating potential fraud, conducting the business of insurance without a license, or 12
2979	2979	evidencing a potential pattern of unfair trade practice in violation of the general laws. 13
2980	2980	(4) Patterns of violations of the general laws and administrative regulations promulgated 14
2981	2981	thereunder that cause consumer harm. 15
2982	2982	SECTION 24. Section 27-72-4 of the General Laws in Chapter 27-72 entitled "Life 16
2983	2983	Settlements Act" is hereby amended to read as follows: 17
2984	2984	27-72-4. License suspension, revocation or refusal to renew. 18
2985	2985	(a) The commissioner may suspend, revoke or refuse to renew the license of any licensee 19
2986	2986	if the commissioner finds that: 20
2987	2987	(1) There was any material misrepresentation in the application for the license; 21
2988	2988	(2) The licensee or any officer, partner, member or director has been guilty of fraudulent 22
2989	2989	or dishonest practices, is subject to a final administrative action or is otherwise shown to be 23
2990	2990	untrustworthy or incompetent to act as a licensee; 24
2991	2991	(3) The provider demonstrates a pattern of unreasonably withholding payments to policy 25
2992	2992	owners; 26
2993	2993	(4) The licensee no longer meets the requirements for initial licensure; 27
2994	2994	(5) The licensee or any officer, partner, member or director has been convicted of a felony, 28
2995	2995	or of any misdemeanor of which criminal fraud is an element; or the licensee has pleaded guilty or 29
2996	2996	nolo contendere with respect to any felony or any misdemeanor of which criminal fraud is an 30
2997	2997	element, regardless whether a judgment of conviction has been entered by the court; 31
2998	2998	(6) The provider has entered into any life settlement contract using a form that has not been 32
2999	2999	approved pursuant to this chapter; 33
3000	3000	(7) The provider has failed to honor contractual obligations set out in a life settlement 34
3001	3001
3002	3002
3003	3003	LC002603 - Page 82 of 137
3004	3004	contract; 1
3005	3005	(8) The provider has assigned, transferred or pledged a settled policy to a person other than 2
3006	3006	a provider licensed in this state, a purchaser, an accredited investor or qualified institutional buyer 3
3007	3007	as defined respectively in Regulation D, Rule 501 or Rule 144A of the Federal Securities Act of 4
3008	3008	1933, as amended, financing entity, special purpose entity, or related provider trust; or 5
3009	3009	(9) The licensee or any officer, partner, member or key management personnel has violated 6
3010	3010	any of the provisions of this chapter. 7
3011	3011	(b) Before the commissioner denies a license application or suspends, revokes or refuses 8
3012	3012	to renew the license of any licensee under this chapter, the commissioner shall conduct a hearing 9
3013	3013	in accordance with this state’s laws governing administrative hearings. 10
3014	3014	SECTION 25. Section 27-77-2 of the General Laws in Chapter 27-77 entitled "Risk 11
3015	3015	Management and Own Risk and Solvency Assessment Act" is hereby amended to read as follows: 12
3016	3016	27-77-2. Definitions. 13
3017	3017	For purposes of this chapter: 14
3018	3018	(a) “Commissioner” means the director of the department of business regulation or his or 15
3019	3019	her designee. 16
3020	3020	(b) “Insurance group.” For the purpose of conducting an ORSA, the term “insurance group” 17
3021	3021	means those insurers and affiliates included within an insurance holding company system as 18
3022	3022	defined in chapter 27-35. 19
3023	3023	(c) “Insurer.” The term “insurer” shall not include agencies, authorities or instrumentalities 20
3024	3024	of the United States, its possessions and territories, the commonwealth of Puerto Rico, the District 21
3025	3025	of Columbia, or a state or political subdivision of a state. 22
3026	3026	(d) “NAIC” means the National Association of Insurance Commissioners. 23
3027	3027	(e) “Own Risk and Solvency Assessment” or “ORSA.” An “Own Risk and Solvency 24
3028	3028	Assessment” or “ORSA” means a confidential internal assessment, appropriate to the nature, scale 25
3029	3029	and complexity of an insurer or insurance group, conducted by that insurer or insurance group of 26
3030	3030	the material and relevant risks associated with the insurer or insurance group’s current business 27
3031	3031	plan, and the sufficiency of capital resources to support those risks. 28
3032	3032	(f) “ORSA Guidance Manual” means the current version of the “Own Risk and Solvency 29
3033	3033	Assessment Guidance Manual” developed and adopted by the NAIC and as amended from time to 30
3034	3034	time. A change in the ORSA guidance manual shall be effective on January 1 following the calendar 31
3035	3035	year in which the changes have been adopted by the NAIC. 32
3036	3036	(g) “ORSA Summary Report” means a confidential high-level summary of an insurer or 33
3037	3037	insurance group’s ORSA. 34
3038	3038
3039	3039
3040	3040	LC002603 - Page 83 of 137
3041	3041	SECTION 26. Section 27-80-3 of the General Laws in Chapter 27-80 entitled "Unclaimed 1
3042	3042	Life Insurance Benefits Act" is hereby amended to read as follows: 2
3043	3043	27-80-3. Definitions. 3
3044	3044	As used in this chapter: 4
3045	3045	(1) “Death master file” means the United States Social Security Administration’s death 5
3046	3046	master file or any other database or service that is at least as comprehensive as the United States 6
3047	3047	Social Security Administration’s death master file for determining that a person has reportedly died. 7
3048	3048	(2) “Death master file match” means a search of the death master file that results in a match 8
3049	3049	of the Social Security number or the name and date of birth of an insured, annuity owner, or retained 9
3050	3050	asset account holder. 10
3051	3051	(3) “Policy” means any policy or certificate of life insurance that provides a death benefit. 11
3052	3052	The term “policy” shall not include: 12
3053	3053	(i) Any policy of or certificate of life insurance that provides a death benefit under an 13
3054	3054	employee benefit plan: 14
3055	3055	(A) Subject to the Employee Retirement Income Security Act of 1974 (Pub. L. 93-406), 29 15
3056	3056	U.S.C. § 1002, as periodically amended; or 16
3057	3057	(B) Under any federal employee benefit program; or 17
3058	3058	(ii) Any policy or certificate of life insurance that is used to fund a pre-need funeral contract 18
3059	3059	or pre-arrangement; or 19
3060	3060	(iii) Any policy or certificate of credit life or accidental death insurance. 20
3061	3061	(4) “Contract” means an annuity contract. The term “contract” shall not include an annuity 21
3062	3062	used to fund an employment-based retirement plan or program where the insurer is not committed 22
3063	3063	by terms of the annuity contract to pay death benefits to the beneficiaries of specific plan 23
3064	3064	participants. 24
3065	3065	SECTION 27. Section 7-12-60 of the General Laws in Chapter 7-12 entitled "Partnerships" 25
3066	3066	is hereby repealed. 26
3067	3067	7-12-60. Filing of returns with the tax administrator — Annual charge. 27
3068	3068	(a) For tax years beginning on or after January 1, 2012, a limited-liability partnership 28
3069	3069	registered under § 7-12-56, shall file a return in the form and containing the information as 29
3070	3070	prescribed by the tax administrator as follows: 30
3071	3071	(1) If the fiscal year of the limited-liability partnership is the calendar year, on or 31
3072	3072	before the fifteenth day of April in the year following the close of the fiscal year; and 32
3073	3073	(2) If the fiscal year of the limited-liability partnership is not a calendar year, on or 33
3074	3074	before the fifteenth day of the fourth month following the close of the fiscal year. 34
3075	3075
3076	3076
3077	3077	LC002603 - Page 84 of 137
3078	3078	(b) For tax years beginning after December 31, 2015, a limited-liability partnership 1
3079	3079	registered under § 7-12-56, shall file a return, in the form and containing the information as 2
3080	3080	prescribed by the tax administrator, and shall be filed on or before the date a federal tax 3
3081	3081	return is due to be filed, without regard to extension. 4
3082	3082	(c) An annual charge, equal to the minimum tax imposed upon a corporation under 5
3083	3083	§ 44-11-2(e), shall be due on the filing of the limited-liability partnership’s return filed with 6
3084	3084	the tax administrator and shall be paid to the division of taxation. 7
3085	3085	(d) The annual charge is delinquent if not paid by the due date for the filing of the 8
3086	3086	return and an addition of one hundred dollars ($100) to the charge is then due. 9
3087	3087	ARTICLE II -- STATUTORY CONSTRUCTION 10
3088	3088	SECTION 1. Section 5-63.2-2 of the General Laws in Chapter 5-63.2 entitled "Mental 11
3089	3089	Health Counselors and Marriage and Family Therapists" is hereby amended to read as follows: 12
3090	3090	5-63.2-2. Definitions. 13
3091	3091	As used in this chapter: 14
3092	3092	(1) “Advertise” means, but is not limited to, the issuing or causing to be distributed any 15
3093	3093	card, sign, or device to any person; or the causing, permitting, or allowing any sign or marking on 16
3094	3094	or in any building, radio, or television; or by advertising by any other means designed to secure 17
3095	3095	public attention. 18
3096	3096	(2) “Board” means the board of mental health counselors and marriage and family 19
3097	3097	therapists. 20
3098	3098	(3) “Clinical counselor in mental health counselor” means a person who is licensed 21
3099	3099	pursuant to § 5-63.2-9, which license is in force and not suspended or revoked as of the particular 22
3100	3100	time in question. 23
3101	3101	(4) “Internship” means a part of an organized graduate program in counseling therapy and 24
3102	3102	constitutes a supervised experience within a mental health and/or marriage and family setting. 25
3103	3103	(5) “Marriage and family therapist” means a person who is licensed pursuant to § 5-63.2-26
3104	3104	10, which license is in force and not suspended or revoked as of the particular time in question. 27
3105	3105	(6) “Person” means any individual, firm, corporation, partnership, organization, or body 28
3106	3106	politic. 29
3107	3107	(7) “Practice of clinical mental health counseling” means the rendering of professional 30
3108	3108	services to individuals, families, or groups for monetary compensation. These professional services 31
3109	3109	include: 32
3110	3110	(i) Applying the principles, methods, and theories of counseling and/or psychotherapeutic 33
3111	3111	techniques to define goals and develop a treatment plan of action aimed toward the prevention, 34
3112	3112
3113	3113
3114	3114	LC002603 - Page 85 of 137
3115	3115	treatment, and resolution of social, mental, and emotional dysfunction and intra or interpersonal 1
3116	3116	disorders in persons diagnosed at intake as non-psychotic and not presenting medical problems; 2
3117	3117	and 3
3118	3118	(ii) Engaging in psychotherapy of a nonmedical nature, utilizing supervision when 4
3119	3119	appropriate, and making referrals to other psychiatric, psychological, or medical resources when 5
3120	3120	the person is diagnosed as psychotic or presenting a medical problem. 6
3121	3121	(8) “Practice of marriage and family therapy” means the rendering of professional services 7
3122	3122	to individuals, family groups, couples, or organizations for monetary compensation. These 8
3123	3123	professional services include applying principles, methods, and therapeutic techniques for the 9
3124	3124	purpose of resolving emotional conflicts; modifying perceptions and behavior; enhancing 10
3125	3125	communications and understanding among all family members; and the prevention of family and 11
3126	3126	individual crisis. Individual marriage and family therapists shall also engage in psychotherapy of a 12
3127	3127	nonmedical and non-psychotic nature with appropriate referrals to psychiatric resources. 13
3128	3128	(9) “Practicum” means a part of an organized graduate program in counseling therapy and 14
3129	3129	constitutes a supervised experience within the graduate counseling program. 15
3130	3130	(10) “Qualified supervision” means the supervision of clinical services in accordance with 16
3131	3131	standards established by the board under the supervision of an individual who has been recognized 17
3132	3132	by the board as an approved supervisor. 18
3133	3133	(11) “Recognized educational institution” means any educational institution that grants a 19
3134	3134	bachelor’s, master’s, or doctoral degree and is recognized by the board of mental health counselors 20
3135	3135	and marriage and family therapists or a recognized postgraduate clinical training program as 21
3136	3136	specified in §§ 5-63.2-9 and 5-63.2-10. 22
3137	3137	(12) “Use a title or description of” means to hold oneself out to the public as having a 23
3138	3138	particular status by means of stating on signs, mailboxes, address plates, stationery, 24
3139	3139	announcements, calling cards, or other instruments of professional identification. 25
3140	3140	SECTION 2. Sections 5-65-2, 5-65-3 and 5-65-5 of the General Laws in Chapter 5-65 26
3141	3141	entitled "Contractors’ Registration and Licensing Board" are hereby amended to read as follows: 27
3142	3142	5-65-2. Exemptions from registration — Registered agent for service of process. 28
3143	3143	(a) The following persons shall be exempt from registration under this chapter: 29
3144	3144	(1) A person who is constructing, altering, improving, or repairing his or her own personal 30
3145	3145	property. 31
3146	3146	(2) A person who is constructing, altering, improving, or repairing a structure located 32
3147	3147	within the boundaries of any site or reservation under the jurisdiction of the federal government. 33
3148	3148	(3) A person who furnishes materials, supplies, equipment, or furnishes products and does 34
3149	3149
3150	3150
3151	3151	LC002603 - Page 86 of 137
3152	3152	not fabricate them into, or consume them, in the performance of the work of a contractor. If the 1
3153	3153	person wants to file a complaint pursuant to this chapter they must be registered pursuant to this 2
3154	3154	chapter. 3
3155	3155	(4) A person working on one structure or project, under one or more contracts when the 4
3156	3156	price of all of that person’s contracts for labor, materials, and all other items is less than five 5
3157	3157	hundred dollars ($500) and the work is of a casual, minor, or inconsequential nature. This 6
3158	3158	subsection does not apply to a person who advertises or puts out any sign or card or other device 7
3159	3159	that might indicate to the public that the person is a contractor. 8
3160	3160	(5) This section does not apply to a person who constructs or for compensation with the 9
3161	3161	intent to sell the structure, or who arranges to have constructed a structure to be sold before, upon, 10
3162	3162	or after completion. It shall be prima facie evidence that there was intent to offer the structure for 11
3163	3163	sale if the person who constructed the structure or arranged to have the structure constructed does 12
3164	3164	not occupy the structure for one calendar year after completion. 13
3165	3165	(6) A person performing work on a single-dwelling-unit property that person owns, 14
3166	3166	whether occupied by that person or not, or a person performing work on that person’s residence, 15
3167	3167	whether or not that person owns the residence. This subdivision does not apply to a person 16
3168	3168	performing work on a structure owned by that person if the work is performed, in the pursuit of an 17
3169	3169	independent business, with the intent of offering the structure for sale before, upon, or after 18
3170	3170	completion. 19
3171	3171	(7) A person who performs work subject to this chapter as an employee of a contractor. 20
3172	3172	(8) A manufacturer of a mobile home constructed under standards established by the 21
3173	3173	federal government. 22
3174	3174	(9) A person involved in the movement of: 23
3175	3175	(i) Modular buildings or structures other than mobile homes not in excess of fourteen feet 24
3176	3176	(14′) in width. 25
3177	3177	(ii) Structures not in excess of sixteen feet (16′) in width when these structures are being 26
3178	3178	moved by their owner if the owner is not a contractor required to be registered under this chapter. 27
3179	3179	(10) Any person or business entity licensed by the state employing licensed trades persons 28
3180	3180	as defined by chapters 6, 20, and 56 of this title, and chapters 26 and 27 of title 28 and working 29
3181	3181	within the purview of the license issued by the governing agency shall be exempt from all the 30
3182	3182	provisions of this chapter except § 5-65-7, requiring insurance. A valid certificate of insurance shall 31
3183	3183	be required to be maintained by the licensing agency during the terms of the issuance date of the 32
3184	3184	license as a condition for a valid license. Failure of the licensee to maintain this insurance shall 33
3185	3185	result in loss of license pursuant to requirements of statutes governing the licensing authority. 34
3186	3186
3187	3187
3188	3188	LC002603 - Page 87 of 137
3189	3189	(b) No registration shall be issued to a nonresident contractor until he or she has filed with 1
3190	3190	the board a power of attorney constituting and appointing a registered agent upon whom all 2
3191	3191	processes in any action or legal proceeding against him or her may be served, and in the power of 3
3192	3192	attorney agrees that any lawful process against him or her that may be served upon his or her 4
3193	3193	registered agent is of the same force and validity as if served on the nonresident contractor, and that 5
3194	3194	the force power continues irrevocably in force until such time as the board has been duly notified 6
3195	3195	in writing of any change to that status. 7
3196	3196	5-65-3. Registration for work on a structure required of contractor — Issuance of 8
3197	3197	building permits to unregistered or unlicensed contractors prohibited — Evidence of activity 9
3198	3198	as a contractor — Duties of contractors. 10
3199	3199	(a) A person shall not undertake, offer to undertake, or submit a bid to do work as a 11
3200	3200	contractor on a structure unless that person has a current, valid certificate of registration for all 12
3201	3201	construction work issued by the board. A partnership, corporation, limited liability company, or 13
3202	3202	joint venture may do the work; offer to undertake the work; or submit a bid to do the work only if 14
3203	3203	that partnership, corporation, limited liability company, or joint venture is registered for the work 15
3204	3204	and in the case of registration by a corporation, limited liability company, joint venture, or 16
3205	3205	partnership, an individual shall be designated to be responsible for the corporation’s, company’s, 17
3206	3206	joint venture’s, or partnership’s work. The corporation, limited liability company, joint venture, or 18
3207	3207	partnership and its individual designee shall be jointly and severally liable and responsible for the 19
3208	3208	payment of the registration fee, as required in this chapter, and for compliance with all requirements 20
3209	3209	and violations of any provisions of this chapter and the regulations promulgated thereunder. 21
3210	3210	Disciplinary action taken on a registration held by a corporation, partnership, limited liability 22
3211	3211	company, joint venture, individual, or sole proprietor may affect other registrations held by the 23
3212	3212	same corporation, partnership, limited liability company, joint venture, individual, or sole 24
3213	3213	proprietorship, and shall also be grounds for the board or office to deny and preclude future 25
3214	3214	registration by any corporation, partnership, limited liability company, joint venture, individual, or 26
3215	3215	sole proprietorship where the disciplined registrant and the applicant for registration have an 27
3216	3216	individual principal and/or responsible designee in common. 28
3217	3217	(b) A registered partnership, limited liability company, or corporation shall notify the board 29
3218	3218	in writing immediately upon any change in partners or corporate officers. 30
3219	3219	(c) A city, town, or the state shall not issue a building permit to anyone required to be 31
3220	3220	registered under this chapter who does not have a current, valid registration or valid license. Each 32
3221	3221	city, town, or the state that requires the issuance of a permit as a condition precedent to construction, 33
3222	3222	alteration, improvement, demolition, movement, or repair of any building or structure or the 34
3223	3223
3224	3224
3225	3225	LC002603 - Page 88 of 137
3226	3226	appurtenance to the structure shall also require that each applicant for the permit as a condition to 1
3227	3227	issuing the permit, is registered under the provisions of this chapter, giving the number of the 2
3228	3228	registration and stating that the registration is in full force and effect, or, if the applicant is exempt 3
3229	3229	from the provisions of this chapter, listing the basis for the exemption. The city, town, or the state 4
3230	3230	shall list the contractor’s registration number on the permit obtained by that contractor, and if a 5
3231	3231	homeowner is issued a permit, the building inspector or official must ascertain registration numbers 6
3232	3232	of each contractor on the premises and shall inform the registration board of any non-registered 7
3233	3233	contractors performing work at the site. 8
3234	3234	(d) Every city and town that requires the issuance of a business license as a condition 9
3235	3235	precedent to engaging, within the city or town, in a business that is subject to regulation under this 10
3236	3236	chapter, shall require that each licensee and each applicant for issuance or renewal of the license 11
3237	3237	file, or has on file, with the city or town a signed statement that the licensee or applicant is registered 12
3238	3238	under the provisions of this chapter and stating that the registration is in full force and effect. 13
3239	3239	(e) It shall be prima facie evidence of doing business as a contractor when a person for that 14
3240	3240	person’s own use performs, employs others to perform, or for compensation and with the intent to 15
3241	3241	sell the structure, arranges to have performed any work described in § 5-65-1(4) the definition for 16
3242	3242	"contract for construction", § 5-65-1(6), if within any one twelve-month (12) period that person 17
3243	3243	offers for sale one or more structures on which that work was performed. 18
3244	3244	(f) Registration under this chapter shall be prima facie evidence that the registrant conducts 19
3245	3245	a separate, independent business. 20
3246	3246	(g) The provisions of this chapter shall be exclusive and no city or town shall require or 21
3247	3247	shall issue any registrations or licenses nor charge any fee for the regulatory registration of any 22
3248	3248	contractor registered with the board. Nothing in this subsection shall limit or abridge the authority 23
3249	3249	of any city or town to license and levy and collect a general and nondiscriminatory license fee 24
3250	3250	levied upon all businesses, or to levy a tax based upon business conducted by any firm within the 25
3251	3251	city or town’s jurisdiction, if permitted under the laws of the state. 26
3252	3252	(h)(1) Every contractor shall maintain a list that shall include the following information 27
3253	3253	about all subcontractors or other contractors performing work on a structure for that contractor: 28
3254	3254	(i) Names and addresses; and 29
3255	3255	(ii) Registration numbers or other license numbers. 30
3256	3256	(2) The list referred to in subsection (h)(1) of this section shall be delivered to the board 31
3257	3257	within twenty-four (24) hours after a request is made during reasonable working hours, or a fine of 32
3258	3258	twenty-five dollars ($25.00) may be imposed for each offense. 33
3259	3259	(i) The following subcontractors who are not employees of a registered contractor must 34
3260	3260
3261	3261
3262	3262	LC002603 - Page 89 of 137
3263	3263	obtain a registration certificate prior to conducting any work: (1) Carpenters, including finish 1
3264	3264	carpenters and framers; (2) Siding installers; (3) Roofers; (4) Foundation installers, including 2
3265	3265	concrete installers and form installers; (5) Drywall installers; (6) Plasterers; (7) Insulation installers; 3
3266	3266	(8) Ceramic tile installers; (9) Floor covering installers; (10) Swimming pool installers, both above 4
3267	3267	ground and in ground; (11) Masons, including chimney installers, fireplace installers, and general 5
3268	3268	masonry erectors; (12) Hardscape installers; (13) Power washers who perform work on structures; 6
3269	3269	and (14) Painters. This list is not all inclusive and shall not be limited to the above-referenced 7
3270	3270	contractors. No subcontractor licensed by another in-state agency pursuant to § 5-65-2 shall be 8
3271	3271	required to register, provided that said work is performed under the purview of that license. 9
3272	3272	(j) A contractor including, but not limited to, a general contractor, shall not hire any 10
3273	3273	subcontractor or other contractor to work on a structure unless the contractor is registered under 11
3274	3274	this chapter or exempt from registration under the provisions of § 5-65-2. 12
3275	3275	(k) A summary of this chapter, prepared by the board and provided at cost to all registered 13
3276	3276	contractors, shall be delivered by the contractor to the owner when the contractor begins work on 14
3277	3277	a structure; failure to comply may result in a fine. 15
3278	3278	(l) The registration number of each contractor shall appear in any advertising by that 16
3279	3279	contractor. Advertising in any form by an unregistered contractor shall be prohibited, including 17
3280	3280	alphabetical or classified directory listings, vehicles, business cards, and all other forms of 18
3281	3281	advertisements. The violations may result in a penalty being assessed by the board per 19
3282	3282	administrative procedures established. 20
3283	3283	(i) The board may publish, revoke, or suspend registrations and the date the registration 21
3284	3284	was suspended or revoked on a quarterly basis. 22
3285	3285	(ii) Use of the word “license” in any form of advertising when only registered may subject 23
3286	3286	the registrant or those required to be registered to a fine of one hundred dollars ($100) for each 24
3287	3287	offense at the discretion of the board. 25
3288	3288	(m) The contractor must see that permits required by the state building code are secured on 26
3289	3289	behalf of the owner prior to commencing the work involved. The contractor’s registration number 27
3290	3290	must be affixed to the permit as required by the state building code. 28
3291	3291	(n) [Deleted by P.L. 2022, ch. 251, § 1 and P.L. 2022, ch. 252, § 1.] 29
3292	3292	(o) All work performed, including labor and materials, in excess of one thousand dollars 30
3293	3293	($1,000) shall be accompanied by a contract in writing. Contracts required pursuant to this 31
3294	3294	subsection shall include consumer disclosures and information required pursuant to regulations 32
3295	3295	promulgated by the board and the following notice by the contractor to the homeowner: 33
3296	3296	NOTICE OF POSSIBLE MECHANIC'S LIEN 34
3297	3297
3298	3298
3299	3299	LC002603 - Page 90 of 137
3300	3300	To: Insert name of owner, lessee, or tenant, or owner of less than the fee simple. 1
3301	3301	The undersigned is about to perform work and/or furnish materials for the construction, 2
3302	3302	erection, alterations, or repair upon the land at (INSERT ADDRESS) under contract with you. 3
3303	3303	This is a notice that the undersigned and any other persons who provide labor and materials for 4
3304	3304	the improvement under contract with the undersigned may file a mechanic’s lien upon the land in 5
3305	3305	the event of nonpayment to them. It is your responsibility to assure yourself that those other 6
3306	3306	persons under contract with the undersigned receive payment for their work performed and 7
3307	3307	materials furnished for the construction, erection, alteration, or repair upon the land. 8
3308	3308	Failure to adhere to the provisions of this subsection may result in a one-thousand-dollar 9
3309	3309	fine ($1,000) against the contractor and shall not affect the right of any other person performing 10
3310	3310	work or furnishing materials of claiming a lien pursuant to chapter 28 of title 34. However, the 11
3311	3311	person failing to provide the notice shall indemnify and hold harmless any owner, lessee, or tenant, 12
3312	3312	or owner of less than the fee simple, from any payment or costs incurred on account of any lien 13
3313	3313	claims by those not in privity with them, unless the owner, lessee, or tenant, or owner of less than 14
3314	3314	the fee simple, shall not have paid such person. 15
3315	3315	(p) Contracts entered into must contain notice of right of rescission as stipulated in all 16
3316	3316	pertinent Rhode Island consumer protection laws and/or § 5-65-27, if applicable. 17
3317	3317	The contractor must stipulate whether or not all the proper insurances are in effect for each 18
3318	3318	job contracted. 19
3319	3319	A notice of possible mechanic’s lien given in accordance with the requirements of § 34-20
3320	3320	28-4.1 shall satisfy the notice of possible mechanic’s lien required pursuant to subsection (o) of 21
3321	3321	this section. 22
3322	3322	(q) In addition to the requirements of this chapter, contractors engaged in well-drilling 23
3323	3323	activities shall also be subject to regulations pertaining to licensing and registration promulgated 24
3324	3324	by the contractors’ registration and licensing board pursuant to chapter 65.2 of this title and § 46-25
3325	3325	13.2-4. 26
3326	3326	5-65-5. Application for registration — Continuing education. 27
3327	3327	(a) A person who wishes to register as a contractor shall submit an application in a manner 28
3328	3328	as prescribed by the board or office. The application shall include: 29
3329	3329	(1) Workers’ compensation insurance account number, or company name if a number has 30
3330	3330	not yet been obtained, if applicable; 31
3331	3331	(2) Unemployment insurance account number, if applicable; 32
3332	3332	(3) State withholding tax account number, if applicable; 33
3333	3333	(4) Federal employer identification number, if applicable, or if self-employed and 34
3334	3334
3335	3335
3336	3336	LC002603 - Page 91 of 137
3337	3337	participating in a retirement plan; 1
3338	3338	(5)(i) The individual(s) name and business address and residential address of: 2
3339	3339	(A) Each partner or venturer, if the applicant is a partnership or joint venture; 3
3340	3340	(B) The owner, if the applicant is an individual proprietorship; 4
3341	3341	(C) The corporate officers, members, and managers and a copy of corporate papers the 5
3342	3342	articles of incorporation filed with the Rhode Island secretary of state’s office, if the applicant is 6
3343	3343	a corporation; the members and managers and a copy of the articles of organization filed with 7
3344	3344	the Rhode Island secretary of state's office if the applicant is a limited liability company 8
3345	3345	(ii) Post office boxes are not acceptable as the only address; 9
3346	3346	(6) A statement as to whether or not the applicant has previously applied for registration, 10
3347	3347	or is or was an officer, manager, member, partner, or venturer of an applicant who previously 11
3348	3348	applied for registration and if so, the name of the corporation, limited liability company, 12
3349	3349	partnership, or venture; and 13
3350	3350	(7) Valid insurance certificate for the type of work being performed and as required under 14
3351	3351	§ 5-65-7. 15
3352	3352	(b) A person may be prohibited from registering or renewing a registration as a contractor 16
3353	3353	under the provisions of this chapter or his or her registration may be revoked or suspended if he or 17
3354	3354	she has any unsatisfied or outstanding judgments from arbitration, bankruptcy, courts, or 18
3355	3355	administrative agency against him or her relating to his or her work as a contractor, and provided, 19
3356	3356	further, that a statement shall be provided to the board attesting to the information herein. 20
3357	3357	(c) Failure to provide or falsified information on an application, or any document required 21
3358	3358	by this chapter, is punishable by a fine not to exceed ten thousand dollars ($10,000) and/or denial 22
3359	3359	or revocation of the registration, or both. 23
3360	3360	(d) An applicant must be at least eighteen (18) years of age. 24
3361	3361	(e) For new applications, satisfactory proof shall be provided to the board evidencing the 25
3362	3362	completion of five (5) hours of preregistration education units as determined by the board pursuant 26
3363	3363	to established regulations. 27
3364	3364	(f) For renewal applications, satisfactory proof shall be provided to the board evidencing 28
3365	3365	the completion of two and one-half (2.5) hours of continuing education units that will be required 29
3366	3366	to be maintained by residential contractors as a condition of registration as determined by the board 30
3367	3367	pursuant to established regulations. 31
3368	3368	(g) A certification in a form issued by the board shall be completed upon registration or 32
3369	3369	license or renewal to ensure contractors are aware of certain provisions of this law and shall be 33
3370	3370	signed by the registrant before a registration can be issued or renewed. 34
3371	3371
3372	3372
3373	3373	LC002603 - Page 92 of 137
3374	3374	SECTION 3. Section 11-47-8 of the General Laws in Chapter 11-47 entitled "Weapons" is 1
3375	3375	hereby amended to read as follows: 2
3376	3376	11-47-8. License or permit required for carrying pistol — Other weapons prohibited. 3
3377	3377	(a) No person shall, without a license or permit issued as provided in §§ 11-47-11, 11-47-4
3378	3378	12, and 11-47-18, carry a pistol or revolver in any vehicle or conveyance or on or about his or her 5
3379	3379	person whether visible or concealed, except in his or her dwelling house or place of business or on 6
3380	3380	land possessed by him or her or as provided in §§ 11-47-9 and 11-47-10. The provisions of these 7
3381	3381	sections shall not apply to any person who is the holder of a valid license or permit issued by the 8
3382	3382	licensing authority of another state, or territory of the United States, or political subdivision of the 9
3383	3383	state or territory, allowing him or her to carry a pistol or revolver in any vehicle or conveyance or 10
3384	3384	on or about his or her person whether visible or concealed, provided the person is merely 11
3385	3385	transporting the firearm through the state in a vehicle or other conveyance without any intent on 12
3386	3386	the part of the person to detain him or herself or remain within the state of Rhode Island. No person 13
3387	3387	shall manufacture, sell, purchase, or possess a machine gun except as otherwise provided in this 14
3388	3388	chapter. Every person violating the provision of this section shall, upon conviction, be punished by 15
3389	3389	imprisonment for not less than one nor more than ten (10) years, or by a fine up to ten thousand 16
3390	3390	dollars ($10,000), or both, and except for a first conviction under this section, shall not be afforded 17
3391	3391	the provisions of suspension or deferment of sentence, nor a probation. 18
3392	3392	(b) No person shall have in his or her possession or under his or her control any sawed-off 19
3393	3393	shotgun or sawed-off rifle as defined in § 11-47-2. Any person convicted of violating this 20
3394	3394	subsection shall be punished by imprisonment for up to ten (10) years, or by a fine of up to five 21
3395	3395	thousand dollars ($5,000), or both. 22
3396	3396	(c) No person shall have in his or her possession or under his or her control any firearm 23
3397	3397	while the person delivers, possesses with intent to deliver, or manufactures a controlled substance. 24
3398	3398	Any person convicted of violating this subsection shall be punished by imprisonment for not less 25
3399	3399	than two (2) years nor more than twenty (20) years, and the sentence shall be consecutive to any 26
3400	3400	sentence the person may receive for the delivery, possession with intent to deliver, or the 27
3401	3401	manufacture of the controlled substance. It shall not be a defense to a violation of this subsection 28
3402	3402	that a person has a license or permit to carry or possess a firearm. 29
3403	3403	(d) It shall be unlawful for any person to possess a bump-fire device, binary trigger, trigger 30
3404	3404	crank, or any other device that when attached to a semi-automatic weapon allows full-automatic 31
3405	3405	fire. Individuals who possess these items shall have ninety (90) days from the enactment of this 32
3406	3406	section to either sell, destroy, or otherwise remove these items from the state of Rhode Island. Every 33
3407	3407	person violating the provisions of this section shall, upon conviction, be punished by imprisonment 34
3408	3408
3409	3409
3410	3410	LC002603 - Page 93 of 137
3411	3411	for not less than one nor more than ten (10) years, or by a fine up to ten thousand dollars ($10,000), 1
3412	3412	or both, and, except for a first conviction under this section, shall not be afforded the provisions of 2
3413	3413	suspension or deferment of sentence, nor a probation. 3
3414	3414	(e) No person shall manufacture, sell, offer to sell, transfer, purchase, possess, or have 4
3415	3415	under his or her control a ghost gun or an undetectable firearm or any firearm produced by a 3D 5
3416	3416	printing process. Any person convicted of violating this subsection shall be punished by 6
3417	3417	imprisonment of not more than ten (10) years, or by a fine up to ten thousand dollars ($10,000), or 7
3418	3418	both and except for a first conviction under this section shall not be afforded the provisions of 8
3419	3419	suspension or deferment of sentence, probation, nor fine. These provisions shall not apply to 9
3420	3420	federally licensed manufacturers (FLN Federal Firearm License Type 07) pursuant to Alcohol, 10
3421	3421	Tobacco, Firearms, and Explosives (ATF) regulations. 11
3422	3422	SECTION 4. Section 17-20-9 of the General Laws in Chapter 17-20 entitled "Mail Ballots" 12
3423	3423	is hereby amended to read as follows: 13
3424	3424	17-20-9. Application by permanently disabled or incapacitated voters and nursing 14
3425	3425	home residents. 15
3426	3426	(a) A voter who is indefinitely confined because of physical illness or infirmity or is 16
3427	3427	disabled for an indefinite period or who is a long-term resident in a nursing home, may, by signing 17
3428	3428	an affidavit to that effect, request that a mail ballot application be sent to him or her automatically 18
3429	3429	for every election. The affidavit form and instructions shall be prescribed by the secretary of state, 19
3430	3430	and furnished upon request to any elector by each local board of canvassers. The envelope 20
3431	3431	containing the mail ballot application shall be clearly marked as not forwardable. If any elector is 21
3432	3432	no longer indefinitely confined or is no longer residing in a nursing home, he or she shall notify the 22
3433	3433	clerk of the local board of canvassers of this fact. The clerk shall remove the name of any voter 23
3434	3434	from the mailing list established under this section upon receipt of reliable information that a voter 24
3435	3435	no longer qualifies for the service. The voter shall be notified of the action within five (5) days after 25
3436	3436	the board takes the action. 26
3437	3437	(b) The affidavit form and instructions prescribed in this section shall be mailed to the 27
3438	3438	applicant along with a stamped return envelope addressed to the local boards of canvassers. The 28
3439	3439	secretary of state may process applications pursuant to this section through the online mail ballot 29
3440	3440	application portal established by § 17-20-2.3. 30
3441	3441	(c) For purposes of this section, “nursing home” refers to facilities defined and licensed by 31
3442	3442	the department of health. “Long-term” excludes any residents temporarily residing in such a facility 32
3443	3443	for rehabilitation. 33
3444	3444	(d) The secretary of state shall maintain a list in the central voter registration system of all 34
3445	3445
3446	3446
3447	3447	LC002603 - Page 94 of 137
3448	3448	voters who automatically receive applications for mail ballots, pursuant to this section. 1
3449	3449	(e) [Expires December 31, 2025.] Eligible disabled voters shall be entitled to electronically 2
3450	3450	receive and return their mail ballot, using the same electronic transmission system as that used by 3
3451	3451	voters covered by the Uniformed and Overseas Citizens Absentee Voting Act (UOCAVA). This 4
3452	3452	electronic process shall satisfy the federal Rehabilitation Act, section 508 concerning accessibility 5
3453	3453	standards. 6
3454	3454	(f) [Expires December 31, 2025.] For purposes of this section, “eligible disabled voter” 7
3455	3455	means a disabled person with disabilities eligible to vote who is incapacitated to such an extent 8
3456	3456	that it would be an undue hardship to vote at the polls because of illness, mental or physical 9
3457	3457	disability, blindness, or a serious impairment of mobility. 10
3458	3458	SECTION 5. Sections 19-14-3 and 19-14-10 of the General Laws in Chapter 19-14 entitled 11
3459	3459	"Licensed Activities" are hereby amended to read as follows: 12
3460	3460	19-14-3. Application for license. 13
3461	3461	(a) The application for a license shall be in the form prescribed by the director and shall 14
3462	3462	contain the name and address or addresses where the business of the applicant is located and if the 15
3463	3463	applicant is a partnership, association, corporation, or other form of business organization, the 16
3464	3464	names and addresses of each member, director, and principal officer thereof or and any individual 17
3465	3465	acting in the capacity of the manager of an office location. The application shall also include a 18
3466	3466	description of the activities of the applicant, in such detail and for such periods as the director may 19
3467	3467	require, as well as such further information as the director may require. The director may require a 20
3468	3468	background investigation of each applicant for a license by means of fingerprint checks pursuant 21
3469	3469	to §§ 19-14-7 and 42-14-14, utilizing the Federal Bureau of Investigation, or other agency as 22
3470	3470	determined by the director for state and national criminal history record checks. If the applicant is 23
3471	3471	a partnership, association, corporation, or other form of business organization, the director may 24
3472	3472	require a background investigation by means of fingerprint checks on each member, director, 25
3473	3473	trustee, or principal officer of the applicant and any individual acting in the capacity of the manager 26
3474	3474	of an office location. The director will determine by rule those items of information appearing on 27
3475	3475	a criminal records check that will constitute disqualifying information and therefore render the 28
3476	3476	applicant ineligible for licensing under this chapter in accordance with the provisions of § 19-14-29
3477	3477	7. Each application for a license shall be accompanied by an investigation fee. The applicant at the 30
3478	3478	time of making application shall pay to the department a fee equal to the annual license fee as 31
3479	3479	provided in this chapter and the sum of one half (½) of the annual license fee as a fee for 32
3480	3480	investigating the application. The license shall be continuous and the license fee shall cover the 33
3481	3481	period through December 31 of each year. The annual license fee for any application approved after 34
3482	3482
3483	3483
3484	3484	LC002603 - Page 95 of 137
3485	3485	November 1 of any given year shall satisfy the annual license fee requirement through the end of 1
3486	3486	the next succeeding calendar year ending December 31. The director, or the director’s designee, is 2
3487	3487	authorized to participate in a multistate licensing system for licensees. The director may establish 3
3488	3488	requirements for participation by an applicant for a license or a person licensed under this chapter. 4
3489	3489	Any such requirements that may be established by the director shall be published on the website of 5
3490	3490	the department of business regulation. Upon implementation, participation by an applicant for a 6
3491	3491	license or by a person licensed under the provisions of this chapter shall be mandatory. The 7
3492	3492	applicant may be required to pay an additional fee for a license or other participation in such 8
3493	3493	multistate licensing system. 9
3494	3494	(b) [Reserved]. 10
3495	3495	(c) [Reserved]. 11
3496	3496	(d) Any license issued under the provisions of former § 5-66-2 shall remain in full force 12
3497	3497	and effect until its expiration and shall be subject to the provisions of this chapter. 13
3498	3498	(e) An applicant for issuance of a mortgage loan originator license shall file with the 14
3499	3499	director, or the director’s designee, evidence acceptable to the director, or the director’s designee, 15
3500	3500	that said applicant has complied with the provisions of §§ 19-14.10-5, 19-14.10-7 and 19-14.10-8. 16
3501	3501	19-14-10. Agent for service of process. 17
3502	3502	(a) Every licensee shall appoint, and thereafter maintain, in this state a resident agent with 18
3503	3503	authority to accept process for the licensee in this state, including the process of garnishment. 19
3504	3504	(1) The appointment shall be filed with the director, or the director’s designee, 20
3505	3505	electronically through the Nationwide Multistate Licensing System. The designation of an agent 21
3506	3506	shall provide all contact information, including the business address, street, and number, if any, of 22
3507	3507	the resident agent. Thereafter, if the resident agent changes his or her business address or other 23
3508	3508	contact information, the licensee shall, within ten (10) days after any change, file electronically 24
3509	3509	through the Nationwide Multistate Licensing System notice of the change setting forth the agent’s 25
3510	3510	current business address or other contact information. 26
3511	3511	(2) If the resident agent dies, resigns, or leaves the state, the licensee shall make a new 27
3512	3512	appointment and file the new appointment electronically through the Nationwide Multistate 28
3513	3513	Licensing System. The original designation shall not be revoked until new appointment shall have 29
3514	3514	been given to some other competent person resident in this state and filed with the department. 30
3515	3515	(3) Service of process upon the resident agent shall be deemed sufficient service upon the 31
3516	3516	licensee. 32
3517	3517	(4) Any licensee who fails to appoint a resident agent and file the appointment 33
3518	3518	electronically through the Nationwide Multistate Licensing System, or fails to replace a resident 34
3519	3519
3520	3520
3521	3521	LC002603 - Page 96 of 137
3522	3522	agent for a period of thirty (30) days from vacancy, shall be liable for a penalty not exceeding five 1
3523	3523	hundred dollars ($500) and shall be subject to suspension or revocation of the license. 2
3524	3524	(5) Upon the filing of any appointment required by this section, a fee of twenty-five dollars 3
3525	3525	($25.00) shall be paid to the director for the use of the state. 4
3526	3526	(6) Any licensee that is a corporation and complies with the provisions of chapter 1.2 of 5
3527	3527	title 7 is exempt from the filing requirements of this section. Any licensee that is a limited 6
3528	3528	partnership or limited liability company and complies with the provisions of chapters 13 13.1 and 7
3529	3529	16 of title 7 is exempt from the requirements of this section. 8
3530	3530	(b) Any process, including the process of garnishment, may be served upon the director, or 9
3531	3531	the director’s designee, as agent of the licensee in the event that no resident agent can be found 10
3532	3532	upon whom service can be made, or in the event that the licensee has failed to designate a resident 11
3533	3533	agent as required, and process may be served by leaving a copy of the process with a fee of twenty-12
3534	3534	five dollars ($25.00) which shall be included in the taxable costs of the suit, action, or proceeding, 13
3535	3535	in the hands of the director, or the director’s designee. This manner of service upon the licensee 14
3536	3536	shall be sufficient, provided that notice of service and a copy of the process shall be immediately 15
3537	3537	sent by certified mail by the plaintiff, or the plaintiff’s attorney of record, to the licensee at the 16
3538	3538	latest address filed with the director, or the director’s designee. If the licensee has not filed his or 17
3539	3539	her address pursuant to this chapter, notice of service shall be given in any manner that the court in 18
3540	3540	which the action is pending may order as affording the licensee reasonable opportunity to defend 19
3541	3541	the action or to learn of the garnishment. Nothing contained in this section shall limit or affect the 20
3542	3542	right to serve process upon a licensee in any other manner now or hereafter permitted by law. 21
3543	3543	SECTION 6. Sections 19-14.9-3, 19-14.9-5, 19-14.9-12 and 19-14.9-13 of the General 22
3544	3544	Laws in Chapter 19-14.9 entitled "Rhode Island Fair Debt Collection Practices Act" are hereby 23
3545	3545	amended to read as follows: 24
3546	3546	19-14.9-3. Definitions. 25
3547	3547	For the purposes of this chapter, the following terms shall have the following meaning 26
3548	3548	unless the context otherwise requires: 27
3549	3549	(1) “Consumer” means any person obligated or allegedly obligated to pay any debt, as 28
3550	3550	defined by 15 U.S.C. § 1692a. 29
3551	3551	(2) “Consumer reporting agency” means any person which, for monetary fees, dues, or on 30
3552	3552	a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or 31
3553	3553	evaluating consumer credit information or other information on consumers for the purpose of 32
3554	3554	furnishing consumer reports to third parties. 33
3555	3555	(3) “Creditor” means any person who offers or extends credit creating a debt or to whom a 34
3556	3556
3557	3557
3558	3558	LC002603 - Page 97 of 137
3559	3559	debt is owed, but the term shall not include a person to the extent that he/she receives an assignment 1
3560	3560	or transfer of a debt in default solely for the purpose of facilitating collection of the debt. 2
3561	3561	(4) “Debt” means any obligation or alleged obligation of a consumer to pay money arising 3
3562	3562	out of a transaction in which the money, property, insurance, or services that are the subject of the 4
3563	3563	transaction are primarily for personal, family, or household purposes, whether or not the obligation 5
3564	3564	has been reduced to judgment. 6
3565	3565	(5) “Debt collector” means any person who uses an instrumentality of interstate commerce 7
3566	3566	or the mails in any business the principal purpose of which is the collection of any debts, or who 8
3567	3567	regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be 9
3568	3568	owed or due another. Notwithstanding the exclusion provided by clause (f) below, debt collector 10
3569	3569	shall include a creditor who, in the process of collecting his/her own debt, uses any name other than 11
3570	3570	his/her own which would indicate that a third person is collecting or attempting to collect the debt. 12
3571	3571	Debt collector shall also include a person who uses an instrumentality of interstate commerce or 13
3572	3572	the mails in a business the principal purpose of which is the enforcement of security interests. Debt 14
3573	3573	collector shall not include: 15
3574	3574	(a) An officer or employee of a creditor while, in the name of the creditor, collecting debts 16
3575	3575	for the creditor; 17
3576	3576	(b) A person while acting as a debt collector for another person, both of whom are related 18
3577	3577	by common ownership or affiliated by corporate control, if the person acting as a debt collector 19
3578	3578	does so only for a person to whom it is so related or affiliated and if the principal business of the 20
3579	3579	person is not the collection of a debt; 21
3580	3580	(c) An officer or employee of the United States or a state of the United States to the extent 22
3581	3581	that collecting or attempting to collect a debt is in the performance of his/her official duty; 23
3582	3582	(d) A person while serving or attempting to serve legal process on another person in 24
3583	3583	connection with the judicial enforcement of a debt; 25
3584	3584	(e) A nonprofit organization that, at the request of a consumer, performs bona fide 26
3585	3585	consumer credit counseling and assists the consumer in the liquidation of debts by receiving 27
3586	3586	payments from the consumer and distributing the amounts to creditors; 28
3587	3587	(f) A person collecting or attempting to collect a debt owed or due or asserted to be owed 29
3588	3588	or due another to the extent the activity: 30
3589	3589	(1)(i) Is incidental to a bona fide fiduciary obligation or a bona fide escrow arrangement; 31
3590	3590	or 32
3591	3591	(2)(ii) Concerns a debt that was originated by the person; 33
3592	3592	(3)(iii) Concerns a debt that was not in default at the time it was obtained by the person or 34
3593	3593
3594	3594
3595	3595	LC002603 - Page 98 of 137
3596	3596	in connection with a debt secured by a mortgage, when first serviced by the person; 1
3597	3597	(4)(iv) Concerns a debt obtained by the person as a secured party in a commercial credit 2
3598	3598	transaction involving the creditor; 3
3599	3599	(g) Attorneys-at-law collecting a debt on behalf of a client; 4
3600	3600	(h) An agent or independent contractor employed for the purpose of collecting a charge or 5
3601	3601	bill owed by a tenant to a landlord or owed by a customer to a corporation subject to the supervision 6
3602	3602	of the department of business regulation insofar as the person collects charges or bills only for the 7
3603	3603	landlord or supervised corporations. 8
3604	3604	(6) “Department” means the department of business regulation. 9
3605	3605	(7) “Director” means the director of the department of business regulation, or the director’s 10
3606	3606	designee. 11
3607	3607	“Obligor” means an individual or company that owes the debt created by the issuing 12
3608	3608	of a bond required under § 19-14.9-13. 13
3609	3609	(8) “Registrant” means an entity registered under this chapter. 14
3610	3610	SECTION 7. Section 19-14.9-5 of the General Laws in Chapter 19-14.9 entitled "Rhode 15
3611	3611	Island Fair Debt Collection Practices Act" is hereby amended to read as follows: 16
3612	3612	19-14.9-5. Communication in connection with debt collection. 17
3613	3613	(1) Without the prior consent of the consumer given directly to the debt collector or the 18
3614	3614	express permission of a court of competent jurisdiction, a debt collector may not communicate with 19
3615	3615	a consumer in connection with the collection of any debt: 20
3616	3616	(a) At any unusual time or place or a time or place known or which should be known to be 21
3617	3617	inconvenient to the consumer. In the absence of knowledge of circumstances to the contrary, a debt 22
3618	3618	collector shall assume that the convenient time for communicating with a consumer is after 8 23
3619	3619	o’clock A.M. and before 9 o’clock P.M. local time at the consumer’s location; 24
3620	3620	(b) If the debt collector knows the consumer is represented by an attorney with respect to 25
3621	3621	such debt and has knowledge of, or can readily ascertain, such attorney’s name and address, unless 26
3622	3622	the attorney fails to respond within a reasonable period of time to a communication from the debt 27
3623	3623	collector or unless the attorney consents to direct communication with the consumer; or 28
3624	3624	(c) At the consumer’s place of employment if the debt collector knows or has reason to 29
3625	3625	know that the consumer’s employer prohibits the consumer from receiving such communication. 30
3626	3626	(2) Except as provided in § 19-14.9-4, without the prior consent of the consumer given 31
3627	3627	directly to the debt collector, or the express permission of a court of competent jurisdiction, or as 32
3628	3628	reasonably necessary to effectuate a postjudgment judicial remedy, a debt collector may not 33
3629	3629	communicate, in connection with the collection of any debt, with any person other than the 34
3630	3630
3631	3631
3632	3632	LC002603 - Page 99 of 137
3633	3633	consumer, his/her attorney, a consumer reporting agency if otherwise permitted by law, the creditor, 1
3634	3634	the attorney of the creditor, or the attorney of the debt collector. 2
3635	3635	(3) If a consumer notifies a debt collector in writing that the consumer refuses to pay a debt 3
3636	3636	or that the consumer wishes the debt collector to cease further communication with the consumer, 4
3637	3637	the debt collector shall not communicate further with the consumer with respect to such debt, 5
3638	3638	except: 6
3639	3639	(a) To advise the consumer that the debt collector’s further efforts are being terminated; 7
3640	3640	(b) To notify the consumer that the debt collector or creditor may invoke specified remedies 8
3641	3641	that are ordinarily invoked by such debt collector or creditor; or 9
3642	3642	(c) Where applicable, to notify the consumer that the debt collector or creditor intends to 10
3643	3643	invoke a specified remedy. 11
3644	3644	(4) If such notice from the consumer pursuant to subsection (3) of this section is made 12
3645	3645	by mail, notification shall be complete upon receipt. 13
3646	3646	(4)(5) For the purpose of this section, the term “consumer” shall also include the 14
3647	3647	consumer’s spouse, parent (if the consumer is a minor), guardian, executor, or administrator. 15
3648	3648	SECTION 8. Section 19-14.9-12 of the General Laws in Chapter 19-14.9 entitled "Rhode 16
3649	3649	Island Fair Debt Collection Practices Act" is hereby amended to read as follows: 17
3650	3650	19-14.9-12. Registration required. 18
3651	3651	(1) After July 1, 2008, no person shall engage within this state in the business of a debt 19
3652	3652	collector, or engage in soliciting the right to collect or receive payment for another of an account, 20
3653	3653	bill, or other indebtedness, or advertise for or solicit in print the right to collect or receive payment 21
3654	3654	for another of an account, bill, or other indebtedness, without first registering with the director, or 22
3655	3655	the director’s designee. 23
3656	3656	(2) The application for registration shall be in writing; shall contain information as the 24
3657	3657	director may determine; and shall be accompanied by a registration fee of seven hundred fifty 25
3658	3658	dollars ($750). 26
3659	3659	(3) The registration shall be for a period of one year. Each registration shall plainly state 27
3660	3660	the name of the registrant and the city or town with the name of the street and number, if any, of 28
3661	3661	the place where the business is to be carried on; provided that the business shall at all times be 29
3662	3662	conducted in the name of the registrant as it appears on the registration. 30
3663	3663	(4) No person registered to act within this state as a debt collector shall do so under any 31
3664	3664	other name or at any other place of business than that named in the registration. The registration 32
3665	3665	shall be for a single location but may, with notification to the director, be moved to a different 33
3666	3666	location. A registration shall not be transferable or assignable. 34
3667	3667
3668	3668
3669	3669	LC002603 - Page 100 of 137
3670	3670	(5) This section shall not apply: 1
3671	3671	(a) To the servicer of a debt by a mortgage; or 2
3672	3672	(b) To any debt collector located out of this state, provided that the debt collector: 3
3673	3673	(1)(i) Is collecting debts on behalf of an out-of-state creditor for a debt that was incurred 4
3674	3674	out of state; and 5
3675	3675	(2)(ii) Only collects debts in this state using interstate communication methods, including 6
3676	3676	telephone, facsimile, or mail. 7
3677	3677	(c) To any regulated institution as defined under § 19-1-1, national banking association, 8
3678	3678	federal savings bank, federal savings and loan association, federal credit union, or any bank, trust 9
3679	3679	company, savings bank, savings and loan association, or credit union organized under the laws of 10
3680	3680	this state, or any other state of the United States, or any subsidiary of the above; but except as 11
3681	3681	provided herein, this section shall apply to a subsidiary or affiliate, as defined by the director, of an 12
3682	3682	exempted entity and of a bank holding company established in accordance with state or federal law. 13
3683	3683	SECTION 9. Section 19-14.9-13 of the General Laws in Chapter 19-14.9 entitled "Rhode 14
3684	3684	Island Fair Debt Collection Practices Act" is hereby amended to read as follows: 15
3685	3685	19-14.9-13. Remedies and penalties. 16
3686	3686	(1) Any person who engages in the business of a debt collector without a registration as 17
3687	3687	required by § 19-14.9-12, shall, upon conviction, be fined not more than two thousand dollars 18
3688	3688	($2,000) or imprisoned not more than one year, or both. 19
3689	3689	(2) Any debt collector who fails to comply with the provisions of §§ 19-14.9-4 — 19-14.9-20
3690	3690	11 with respect to a consumer may be subject to revocation of registration and shall be civilly liable 21
3691	3691	to such consumer in an amount equal to the sum of: 22
3692	3692	(a) Any actual damages sustained by such consumer as a result of such failure; 23
3693	3693	(b) In the case of any action by an individual, such additional damages as the court may 24
3694	3694	allow, but not to exceed one thousand dollars ($1,000); 25
3695	3695	(c) In the case of a class action: 26
3696	3696	(1)(i) Such amount for each named plaintiff as could be recovered under subsection (2)(b); 27
3697	3697	(2)(ii) Such amount as the court may allow for all other class members, without regard to 28
3698	3698	a minimum individual recovery, not to exceed five hundred thousand dollars ($500,000) or one 29
3699	3699	percent of the net worth of the debt collector, whichever is the lesser; 30
3700	3700	(d) In the case of any successful action to enforce such liability, the costs of the action, 31
3701	3701	together with such reasonable attorney fees as may be determined by the court. 32
3702	3702	(3) In determining the amount of liability in any action under subsection (2), the court shall 33
3703	3703	consider, among other relevant factors: 34
3704	3704
3705	3705
3706	3706	LC002603 - Page 101 of 137
3707	3707	(a) In any individual action under subsection (2)(b), the frequency and persistence of 1
3708	3708	noncompliance by the debt collector or the nature of such noncompliance, and the extent to which 2
3709	3709	such noncompliance was intentional; 3
3710	3710	(b) In any class action under subsection (2)(c), the frequency and persistence of 4
3711	3711	noncompliance by the debt collector; the nature of such noncompliance; the resources of the debt 5
3712	3712	collector; the number of persons adversely affected; and the extent to which the debt collector’s 6
3713	3713	noncompliance was intentional. 7
3714	3714	(4) A debt collector may not be held liable in any action brought pursuant to the provisions 8
3715	3715	of this chapter if: 9
3716	3716	(a) The debt collector shows by a preponderance of evidence that the violation was not 10
3717	3717	intentional or negligent and the violation resulted from a bona fide error, notwithstanding the 11
3718	3718	maintenance of procedures reasonably adapted to avoid any such error; or 12
3719	3719	(b) Within fifteen (15) days, either after discovering a violation that is able to be cured, or 13
3720	3720	after the receipt of a written notice of such violation, the debt collector notifies the consumer of the 14
3721	3721	violation, and makes whatever adjustments or corrections are necessary to cure the violation with 15
3722	3722	respect to the consumer. 16
3723	3723	(5) An action to enforce any liability created by the provisions of this article may be brought 17
3724	3724	in any court of competent jurisdiction within one year from the date on which the violation occurs. 18
3725	3725	(6) The policy of this state is not to award double damages under this article and the federal 19
3726	3726	“Fair Debt Collection Practices Act” (15 U.S.C. § 1692 et seq.). No damages under this section 20
3727	3727	shall be recovered if damages are recovered for a like provision of said federal act. 21
3728	3728	SECTION 10. Section 27-1.1-1 of the General Laws in Chapter 27-1.1 entitled "Credit for 22
3729	3729	Reinsurance Act" is hereby amended to read as follows: 23
3730	3730	27-1.1-1. Credit allowed a domestic ceding insurer. 24
3731	3731	(a) Credit for reinsurance shall be allowed a domestic ceding insurer as either an asset or a 25
3732	3732	reduction from liability on account of reinsurance ceded only when the reinsurer meets the 26
3733	3733	requirements of subsections (b), (c), (d), (e), (f), (g), or (h) of this section; provided, further, that 27
3734	3734	the commissioner may adopt by regulation pursuant to § 27-1.1-4 specific additional requirements 28
3735	3735	relating to or setting forth: 29
3736	3736	(1) The valuation of assets or reserve credits; 30
3737	3737	(2) The amount and forms of security supporting reinsurance arrangements described in § 31
3738	3738	27-1.1-4; and 32
3739	3739	(3) The circumstances pursuant to which credit will be reduced or eliminated. 33
3740	3740	Credit shall be allowed under subsections (b), (c), or (d) of this section only as respects 34
3741	3741
3742	3742
3743	3743	LC002603 - Page 102 of 137
3744	3744	cessions of those kinds or classes of business which the assuming insurer is licensed or otherwise 1
3745	3745	permitted to write or assume in its state of domicile or, in the case of a United States branch of an 2
3746	3746	alien assuming insurer, in the state through which it is entered and licensed to transact insurance or 3
3747	3747	reinsurance. Credit shall be allowed under subsections (d) or (e) of this section only if the applicable 4
3748	3748	requirements of subsection (i) of this section have been satisfied. 5
3749	3749	(b) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is 6
3750	3750	licensed to transact insurance or reinsurance in this state. 7
3751	3751	(c) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is 8
3752	3752	accredited by the commissioner as a reinsurer in this state. In order to be eligible for an accreditation 9
3753	3753	a reinsurer must: 10
3754	3754	(1) File with the commissioner evidence of its submission to this state’s jurisdiction; 11
3755	3755	(2) Submit to this state’s authority to examine its books and records; 12
3756	3756	(3) Be licensed to transact insurance or reinsurance in at least one state, or in the case of a 13
3757	3757	United States branch of an alien assuming insurer, be entered through and licensed to transact 14
3758	3758	insurance or reinsurance in at least one state; 15
3759	3759	(4) Annually file with the commissioner a copy of its annual statement filed with the 16
3760	3760	insurance department of its state of domicile and a copy of its most recent audited financial 17
3761	3761	statement; and 18
3762	3762	(5) Demonstrate to the satisfaction of the commissioner that it has adequate financial 19
3763	3763	capacity to meet its reinsurance obligations and is otherwise qualified to assume reinsurance from 20
3764	3764	domestic insurers. An assuming insurer is deemed to meet this requirement as of the time of its 21
3765	3765	application if it maintains a surplus as regards policyholders in an amount not less than twenty 22
3766	3766	million dollars ($20,000,000) and its accreditation has not been denied by the commissioner within 23
3767	3767	ninety (90) days after submission of its application. 24
3768	3768	(d)(1) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is 25
3769	3769	domiciled in, or in the case of a United States branch of an alien assuming insurer is entered 26
3770	3770	through, a state that employs standards regarding credit for reinsurance substantially similar to 27
3771	3771	those applicable under this statute and the assuming insurer or United States branch of an alien 28
3772	3772	assuming insurer: 29
3773	3773	(i) Maintains a surplus regarding policyholders in an amount not less than twenty million 30
3774	3774	dollars ($20,000,000); and 31
3775	3775	(ii) Submits to the authority of this state to examine its books and records. 32
3776	3776	(2) Provided, that the requirement of subsection (d)(1)(i) of this section does not apply to 33
3777	3777	reinsurance ceded and assumed pursuant to pooling arrangements among insurers in the same 34
3778	3778
3779	3779
3780	3780	LC002603 - Page 103 of 137
3781	3781	holding company system. 1
3782	3782	(e)(1) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that 2
3783	3783	maintains a trust fund in a qualified United States financial institution, as defined in § 27-1.1-3(b), 3
3784	3784	for the payment of the valid claims of its United States ceding insurers, their assigns, and successors 4
3785	3785	in interest. To enable the commissioner to determine the sufficiency of the trust fund, the assuming 5
3786	3786	insurer shall report annually to the commissioner information substantially the same as that required 6
3787	3787	to be reported on the National Association of Insurance Commissioners (NAIC) annual statement 7
3788	3788	form by licensed insurers. The assuming insurer shall submit to examination of its books and 8
3789	3789	records by the commissioner and bear the expense of examination. 9
3790	3790	(2)(i) Credit for reinsurance shall not be granted under this subsection unless the form of 10
3791	3791	the trust and any amendments to the trust have been approved by: 11
3792	3792	(A) The commissioner of the state where the trust is domiciled; or 12
3793	3793	(B) The commissioner of another state who, pursuant to the terms of the trust instrument, 13
3794	3794	has accepted principal regulatory oversight of the trust. 14
3795	3795	(ii) The form of the trust and any trust amendments shall also be filed with the 15
3796	3796	commissioner of every state in which the ceding insurer beneficiaries of the trust are domiciled. 16
3797	3797	The trust instrument shall provide that contested claims shall be valid and enforceable upon the 17
3798	3798	final order of any court of competent jurisdiction in the United States. The trust shall vest legal title 18
3799	3799	to its assets in its trustees for the benefit of the assuming insurer’s United States ceding insurers, 19
3800	3800	their assigns, and successors in interest. The trust and the assuming insurer shall be subject to 20
3801	3801	examination as determined by the commissioner. 21
3802	3802	(iii) The trust shall remain in effect for as long as the assuming insurer has outstanding 22
3803	3803	obligations due under the reinsurance agreements subject to the trust. No later than February 28 of 23
3804	3804	each year the trustee of the trust shall report to the commissioner in writing the balance of the trust 24
3805	3805	and listing the trust’s investments at the preceding year end and shall certify the date of termination 25
3806	3806	of the trust, if so planned, or certify that the trust will not expire prior to the following December 26
3807	3807	31. 27
3808	3808	(3) The following requirements apply to the following categories of assuming insurer: 28
3809	3809	(i) The trust fund for a single assuming insurer shall consist of funds in trust in an amount 29
3810	3810	not less than the assuming insurer’s liabilities attributable to reinsurance ceded by United States 30
3811	3811	ceding insurers, and, in addition, the assuming insurer shall maintain a trusteed surplus of not less 31
3812	3812	than twenty million dollars ($20,000,000), except as provided in subsection (e)(3)(ii); 32
3813	3813	(ii) At any time after the assuming insurer has permanently discontinued underwriting new 33
3814	3814	business secured by the trust for at least three (3) full years, the commissioner with principal 34
3815	3815
3816	3816
3817	3817	LC002603 - Page 104 of 137
3818	3818	regulatory oversight of the trust may authorize a reduction in the required trusteed surplus, but only 1
3819	3819	after a finding, based on an assessment of the risk, that the new required surplus level is adequate 2
3820	3820	for the protection of United States ceding insurers, policyholders, and claimants in light of 3
3821	3821	reasonably foreseeable adverse loss development. The risk assessment may involve an actuarial 4
3822	3822	review, including an independent analysis of reserves and cash flows, and shall consider all material 5
3823	3823	risk factors, including, when applicable, the lines of business involved; the stability of the incurred 6
3824	3824	loss estimates; and the effect of the surplus requirements on the assuming insurer’s liquidity or 7
3825	3825	solvency. The minimum required trusteed surplus may not be reduced to an amount less than thirty 8
3826	3826	percent (30%) of the assuming insurer’s liabilities attributable to reinsurance ceded by United 9
3827	3827	States ceding insurers covered by the trust; 10
3828	3828	(iii)(A) In the case of a group including incorporated and individual unincorporated 11
3829	3829	underwriters: 12
3830	3830	(I) For reinsurance ceded under reinsurance agreements with an inception, amendment or 13
3831	3831	renewal date on or after January 1, 1993, the trust shall consist of a trusteed account in an amount 14
3832	3832	not less than the respective underwriters’ several liabilities attributable to business ceded by United 15
3833	3833	States domiciled ceding insurers to any underwriter of the group; 16
3834	3834	(II) For reinsurance ceded under reinsurance agreements with an inception date on or 17
3835	3835	before December 31, 1992, and not amended or renewed after that date, notwithstanding the other 18
3836	3836	provisions of this chapter, the trust shall consist of a trusteed account in an amount not less than 19
3837	3837	the respective underwriters’ several insurance and reinsurance liabilities attributable to business 20
3838	3838	written in the United States; 21
3839	3839	(III) In addition to these trusts, the group shall maintain in trust a trusteed surplus of which 22
3840	3840	one hundred million dollars ($100,000,000) shall be held jointly for the benefit of the United States 23
3841	3841	domiciled ceding insurers of any member of the group for all years of account; 24
3842	3842	(B) The incorporated members of the group shall not be engaged in any business other than 25
3843	3843	underwriting as a member of the group and shall be subject to the same level of regulation and 26
3844	3844	solvency control by the group’s domiciliary regulator as are the unincorporated members; 27
3845	3845	(C) Within ninety (90) days after its financial statements are due to be filed with the group’s 28
3846	3846	domiciliary regulator, the group shall provide to the commissioner an annual certification by the 29
3847	3847	group’s domiciliary regulator of the solvency of each underwriter member; or if a certification is 30
3848	3848	unavailable, financial statements, prepared by independent public accountants, of each underwriter 31
3849	3849	member of the group; and 32
3850	3850	(iv) In the case of a group of incorporated underwriters under common administration the 33
3851	3851	group shall: 34
3852	3852
3853	3853
3854	3854	LC002603 - Page 105 of 137
3855	3855	(A) Have continuously transacted an insurance business outside the United States for at 1
3856	3856	least three (3) years immediately prior to making application for accreditation; 2
3857	3857	(B) Maintain an aggregate policyholders surplus of ten billion dollars ($10,000,000,000); 3
3858	3858	(C) Maintain a trust fund in an amount not less than the group’s several liabilities 4
3859	3859	attributable to business ceded by United States domiciled ceding insurers to any member of the 5
3860	3860	group pursuant to reinsurance contracts issued in the name of the group; 6
3861	3861	(D) In addition, maintain a joint trusteed surplus of which one hundred million dollars 7
3862	3862	($100,000,000) shall be held jointly for the benefit of United States domiciled ceding insurers of 8
3863	3863	any member of the group as additional security for these liabilities; and 9
3864	3864	(E) Within ninety (90) days after its financial statements are due to be filed with the group’s 10
3865	3865	domiciliary regulator, make available to the commissioner an annual certification of each 11
3866	3866	underwriter member’s solvency by the member’s domiciliary regulator and financial statements of 12
3867	3867	each underwriter member of the group prepared by its independent public accountant. 13
3868	3868	(f) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that has 14
3869	3869	been certified by the commissioner as a reinsurer in this state and secures its obligations in 15
3870	3870	accordance with the requirements of this subsection. 16
3871	3871	(1) In order to be eligible for certification, the assuming insurer shall meet the following 17
3872	3872	requirements: 18
3873	3873	(i) The assuming insurer must be domiciled and licensed to transact insurance or 19
3874	3874	reinsurance in a qualified jurisdiction, as determined by the commissioner pursuant to paragraph 20
3875	3875	(f)(3) of this subsection; 21
3876	3876	(ii) The assuming insurer must maintain minimum capital and surplus, or its equivalent, in 22
3877	3877	an amount to be determined by the commissioner pursuant to regulation; 23
3878	3878	(iii) The assuming insurer must maintain financial strength ratings from two or more rating 24
3879	3879	agencies deemed acceptable by the commissioner pursuant to regulation; 25
3880	3880	(iv) The assuming insurer must agree to submit to the jurisdiction of this state, appoint the 26
3881	3881	commissioner as its agent for service of process in this state, and agree to provide security for one 27
3882	3882	hundred percent (100%) of the assuming insurer’s liabilities attributable to reinsurance ceded by 28
3883	3883	United States ceding insurers if it resists enforcement of a final United States judgment; 29
3884	3884	(v) The assuming insurer must agree to meet applicable information filing requirements as 30
3885	3885	determined by the commissioner, both with respect to an initial application for certification and on 31
3886	3886	an ongoing basis; and 32
3887	3887	(vi) The assuming insurer must satisfy any other requirements for certification deemed 33
3888	3888	relevant by the commissioner. 34
3889	3889
3890	3890
3891	3891	LC002603 - Page 106 of 137
3892	3892	(2) An association including incorporated and individual unincorporated underwriters may 1
3893	3893	be a certified reinsurer. In order to be eligible for certification, in addition to satisfying requirements 2
3894	3894	of subsection (f)(1) above: 3
3895	3895	(i) The association shall satisfy its minimum capital and surplus requirements through the 4
3896	3896	capital and surplus equivalents (net of liabilities) of the association and its members, which shall 5
3897	3897	include a joint central fund that may be applied to any unsatisfied obligation of the association or 6
3898	3898	any of its members, in an amount determined by the commissioner to provide adequate protection; 7
3899	3899	(ii) The incorporated members of the association shall not be engaged in any business other 8
3900	3900	than underwriting as a member of the association and shall be subject to the same level of regulation 9
3901	3901	and solvency control by the association’s domiciliary regulator as are the unincorporated members; 10
3902	3902	and 11
3903	3903	(iii) Within ninety (90) days after its financial statements are due to be filed with the 12
3904	3904	association’s domiciliary regulator, the association shall provide to the commissioner an annual 13
3905	3905	certification by the association’s domiciliary regulator of the solvency of each underwriter member; 14
3906	3906	or if a certification is unavailable, financial statements, prepared by independent public 15
3907	3907	accountants, of each underwriter member of the association. 16
3908	3908	(3) The commissioner shall create and publish a list of qualified jurisdictions, under which 17
3909	3909	an assuming insurer licensed and domiciled in such jurisdiction is eligible to be considered for 18
3910	3910	certification by the commissioner as a certified reinsurer. 19
3911	3911	(i) In order to determine whether the domiciliary jurisdiction of a non-United States 20
3912	3912	assuming insurer is eligible to be recognized as a qualified jurisdiction, the commissioner shall 21
3913	3913	evaluate the appropriateness and effectiveness of the reinsurance supervisory system of the 22
3914	3914	jurisdiction, both initially and on an ongoing basis, and consider the rights, benefits, and the extent 23
3915	3915	of reciprocal recognition afforded by the non-United States jurisdiction to reinsurers licensed and 24
3916	3916	domiciled in the United States. A qualified jurisdiction must agree to share information and 25
3917	3917	cooperate with the commissioner with respect to all certified reinsurers domiciled within that 26
3918	3918	jurisdiction. A jurisdiction may not be recognized as a qualified jurisdiction if the commissioner 27
3919	3919	has determined that the jurisdiction does not adequately and promptly enforce final United States 28
3920	3920	judgments and arbitration awards. Additional factors may be considered in the discretion of the 29
3921	3921	commissioner; 30
3922	3922	(ii) A list of qualified jurisdictions shall be published through the NAIC committee process. 31
3923	3923	The commissioner shall consider this list in determining qualified jurisdictions. If the commissioner 32
3924	3924	approves a jurisdiction as qualified that does not appear on the list of qualified jurisdictions, the 33
3925	3925	commissioner shall provide thoroughly documented justification in accordance with criteria to be 34
3926	3926
3927	3927
3928	3928	LC002603 - Page 107 of 137
3929	3929	developed under regulations; 1
3930	3930	(iii) United States jurisdictions that meet the requirement for accreditation under the NAIC 2
3931	3931	financial standards and accreditation program shall be recognized as qualified jurisdictions; and 3
3932	3932	(iv) If a certified reinsurer’s domiciliary jurisdiction ceases to be a qualified jurisdiction, 4
3933	3933	the commissioner has the discretion to suspend the reinsurer’s certification indefinitely, in lieu of 5
3934	3934	revocation. 6
3935	3935	(4) The commissioner shall assign a rating to each certified reinsurer, giving due 7
3936	3936	consideration to the financial strength ratings that have been assigned by rating agencies deemed 8
3937	3937	acceptable to the commissioner pursuant to regulation. The commissioner shall publish a list of all 9
3938	3938	certified reinsurers and their ratings. 10
3939	3939	(5) A certified reinsurer shall secure obligations assumed from United States ceding 11
3940	3940	insurers under this subsection at a level consistent with its rating, as specified in regulations 12
3941	3941	promulgated by the commissioner. 13
3942	3942	(i) In order for a domestic ceding insurer to qualify for full financial statement credit for 14
3943	3943	reinsurance ceded to a certified reinsurer, the certified reinsurer shall maintain security in a form 15
3944	3944	acceptable to the commissioner and consistent with the provisions of section (3) § 27-1.1-2, or in 16
3945	3945	a multi-beneficiary trust in accordance with subsection (e) of this section, except as otherwise 17
3946	3946	provided in this subsection; 18
3947	3947	(ii) If a certified reinsurer maintains a trust to fully secure its obligations subject to 19
3948	3948	subsection (e) of this section, and chooses to secure its obligations incurred as a certified reinsurer 20
3949	3949	in the form of a multi-beneficiary trust, the certified reinsurer shall maintain separate trust accounts 21
3950	3950	for its obligations incurred under reinsurance agreements issued or renewed as a certified reinsurer 22
3951	3951	with reduced security as permitted by this subsection or comparable laws of other United States 23
3952	3952	jurisdictions and for its obligations subject to subsection (e) of this section. It shall be a condition 24
3953	3953	to the grant of certification under subsection (f) of this section that the certified reinsurer shall have 25
3954	3954	bound itself, by the language of the trust and agreement with the commissioner with principal 26
3955	3955	regulatory oversight of each such trust account, to fund, upon termination of any such trust account, 27
3956	3956	out of the remaining surplus of such trust any deficiency of any other such trust account; 28
3957	3957	(iii) The minimum trusteed surplus requirements provided in subsection (e) are not 29
3958	3958	applicable with respect to a multi-beneficiary trust maintained by a certified reinsurer for the 30
3959	3959	purpose of securing obligations incurred under this subsection, except that such trust shall maintain 31
3960	3960	a minimum trusteed surplus of ten million dollars ($10,000,000); 32
3961	3961	(iv) With respect to obligations incurred by a certified reinsurer under this subsection, if 33
3962	3962	the security is insufficient, the commissioner shall reduce the allowable credit by an amount 34
3963	3963
3964	3964
3965	3965	LC002603 - Page 108 of 137
3966	3966	proportionate to the deficiency, and has the discretion to impose further reductions in allowable 1
3967	3967	credit upon finding that there is a material risk that the certified reinsurer’s obligations will not be 2
3968	3968	paid in full when due; and 3
3969	3969	(v) For purposes of this subsection, a certified reinsurer whose certification has been 4
3970	3970	terminated for any reason shall be treated as a certified reinsurer required to secure one hundred 5
3971	3971	percent (100%) of its obligations. 6
3972	3972	(A) As used in this subsection, the term “terminated” refers to revocation, suspension, 7
3973	3973	voluntary surrender and inactive status; and 8
3974	3974	(B) If the commissioner continues to assign a higher rating as permitted by other provisions 9
3975	3975	of this section, this requirement does not apply to a certified reinsurer in inactive status or to a 10
3976	3976	reinsurer whose certification has been suspended. 11
3977	3977	(6) If an applicant for certification has been certified as a reinsurer in an NAIC-accredited 12
3978	3978	jurisdiction, the commissioner has the discretion to defer to that jurisdiction’s certification, and has 13
3979	3979	the discretion to defer to the rating assigned by that jurisdiction, and such assuming insurer shall 14
3980	3980	be considered to be a certified reinsurer in this state. 15
3981	3981	(7) A certified reinsurer that ceases to assume new business in this state may request to 16
3982	3982	maintain its certification in inactive status in order to continue to qualify for a reduction in security 17
3983	3983	for its in-force business. An inactive certified reinsurer shall continue to comply with all applicable 18
3984	3984	requirements of this subsection, and the commissioner shall assign a rating that takes into account, 19
3985	3985	if relevant, the reasons why the reinsurer is not assuming new business. 20
3986	3986	(g)(1) Credit shall be allowed when the reinsurance is ceded to an assuming insurer, 21
3987	3987	meeting each of the conditions set forth below. 22
3988	3988	(i) The assuming insurer must have its head office or be domiciled in, as applicable, and 23
3989	3989	be licensed in a reciprocal jurisdiction. A “reciprocal jurisdiction” is a jurisdiction that meets one 24
3990	3990	of the following: 25
3991	3991	(A) A non-United States jurisdiction that is subject to an in-force covered agreement with 26
3992	3992	the United States, each within its legal authority, or, in the case of a covered agreement between 27
3993	3993	the United States and European Union, is a member state of the European Union. For purposes of 28
3994	3994	this subsection, a “covered agreement” is an agreement entered into, pursuant to the Dodd-Frank 29
3995	3995	Wall Street Reform and Consumer Protection Act, 31 U.S.C. §§ 313 and 314, that is currently in 30
3996	3996	effect or in a period of provisional application and addresses the elimination, under specified 31
3997	3997	conditions, of collateral requirements, as a condition for entering into any reinsurance agreement 32
3998	3998	with a ceding insurer domiciled in this state or for allowing the ceding insurer to recognize credit 33
3999	3999	for reinsurance; 34
4000	4000
4001	4001
4002	4002	LC002603 - Page 109 of 137
4003	4003	(B) A United States jurisdiction that meets the requirements for accreditation under the 1
4004	4004	NAIC financial standards and accreditation program; or 2
4005	4005	(C) A qualified jurisdiction, as determined by the commissioner pursuant to subsection 3
4006	4006	(f)(3) of this section, that is not otherwise described in subsection (g)(1)(i)(A) or (g)(1)(i)(B) of this 4
4007	4007	section and that meets certain additional requirements, consistent with the terms and conditions of 5
4008	4008	in-force covered agreements, as specified by the commissioner in regulation. 6
4009	4009	(ii) The assuming insurer must have and maintain, on an ongoing basis, minimum capital 7
4010	4010	and surplus, or its equivalent, calculated according to the methodology of its domiciliary 8
4011	4011	jurisdiction, in an amount to be set forth in regulation. If the assuming insurer is an association, 9
4012	4012	including incorporated and individual unincorporated underwriters, it must have and maintain, on 10
4013	4013	an ongoing basis, minimum capital and surplus equivalents (net of liabilities), calculated according 11
4014	4014	to the methodology applicable in its domiciliary jurisdiction, and a central fund containing a 12
4015	4015	balance in amounts to be set forth in regulation. 13
4016	4016	(iii) The assuming insurer must have and maintain, on an ongoing basis, a minimum 14
4017	4017	solvency or capital ratio, as applicable, that will be set forth in regulation. If the assuming insurer 15
4018	4018	is an association, including incorporated and individual unincorporated underwriters, it must have 16
4019	4019	and maintain, on an ongoing basis, a minimum solvency or capital ratio in the reciprocal jurisdiction 17
4020	4020	where the assuming insurer has its head office or is domiciled, as applicable, and is also licensed. 18
4021	4021	(iv) The assuming insurer must agree and provide adequate assurance to the commissioner, 19
4022	4022	in a form specified by the commissioner, pursuant to regulation, as follows: 20
4023	4023	(A) The assuming insurer must provide prompt written notice and explanation to the 21
4024	4024	commissioner, if it falls below the minimum requirements set forth in subsections (g)(1)(ii) or 22
4025	4025	(g)(1)(iii) of this section, or if any regulatory action is taken against it, for serious noncompliance 23
4026	4026	with applicable law; 24
4027	4027	(B) The assuming insurer must consent in writing to the jurisdiction of the courts of this 25
4028	4028	state and to the appointment of the commissioner as agent for service of process. The commissioner 26
4029	4029	may require that consent for service of process be provided to the commissioner and included in 27
4030	4030	each reinsurance agreement. Nothing in this provision shall limit, or in any way alter, the capacity 28
4031	4031	of parties to a reinsurance agreement to agree to alternative dispute resolution mechanisms, except 29
4032	4032	to the extent the agreements are unenforceable under applicable insolvency or delinquency laws; 30
4033	4033	(C) The assuming insurer must consent in writing to pay all final judgments, wherever 31
4034	4034	enforcement is sought, obtained by a ceding insurer or its legal successor, that have been declared 32
4035	4035	enforceable in the jurisdiction where the judgment was obtained; 33
4036	4036	(D) Each reinsurance agreement must include a provision requiring the assuming insurer 34
4037	4037
4038	4038
4039	4039	LC002603 - Page 110 of 137
4040	4040	to provide security in an amount equal to one hundred percent (100%) of the assuming insurer’s 1
4041	4041	liabilities, attributable to reinsurance ceded pursuant to that agreement, if the assuming insurer 2
4042	4042	resists enforcement of a final judgment that is enforceable under the law of the jurisdiction in which 3
4043	4043	it was obtained or a properly enforceable arbitration award, whether obtained by the ceding insurer 4
4044	4044	or by its legal successor on behalf of its resolution estate; and 5
4045	4045	(E) The assuming insurer must confirm that it is not presently participating in any solvent 6
4046	4046	scheme of arrangement that involves this state’s ceding insurers, and agree to notify the ceding 7
4047	4047	insurer and the commissioner and to provide security in an amount equal to one hundred percent 8
4048	4048	(100%) of the assuming insurer’s liabilities to the ceding insurer, should the assuming insurer enter 9
4049	4049	into such a solvent scheme of arrangement. Such security shall be in a form consistent with the 10
4050	4050	provisions of subsection (f) of this section and § 27-1.1-2 and as specified by the commissioner in 11
4051	4051	regulation. 12
4052	4052	(v) The assuming insurer or its legal successor must provide, if requested by the 13
4053	4053	commissioner, on behalf of itself and any legal predecessors, certain documentation to the 14
4054	4054	commissioner, as specified by the commissioner in regulation. 15
4055	4055	(vi) The assuming insurer must maintain a practice of prompt payment of claims under 16
4056	4056	reinsurance agreements, pursuant to criteria set forth in regulation. 17
4057	4057	(vii) The assuming insurer’s supervisory authority must confirm to the commissioner on 18
4058	4058	an annual basis, as of the preceding December 31 or at the annual date otherwise statutorily reported 19
4059	4059	to the reciprocal jurisdiction, that the assuming insurer complies with the requirements set forth in 20
4060	4060	subsections (g)(1)(ii) and (g)(1)(iii) of this section. 21
4061	4061	(viii) Nothing in this provision precludes an assuming insurer from providing the 22
4062	4062	commissioner with information on a voluntary basis. 23
4063	4063	(2) The commissioner shall timely create and publish a list of reciprocal jurisdictions. 24
4064	4064	(i) A list of reciprocal jurisdictions is published through the NAIC committee process. The 25
4065	4065	commissioner’s list shall include any reciprocal jurisdiction as defined under subsections 26
4066	4066	(g)(1)(i)(A) and (g)(1)(i)(B) of this section, and shall consider any other reciprocal jurisdiction 27
4067	4067	included on the NAIC list. The commissioner may approve a jurisdiction that does not appear on 28
4068	4068	the NAIC list of reciprocal jurisdictions, in accordance with criteria to be developed under 29
4069	4069	regulations issued by the commissioner. 30
4070	4070	(ii) The commissioner may remove a jurisdiction from the list of reciprocal jurisdictions, 31
4071	4071	upon a determination that the jurisdiction no longer meets the requirements of a reciprocal 32
4072	4072	jurisdiction, in accordance with a process set forth in regulations issued by the commissioner, 33
4073	4073	except that the commissioner shall not remove from the list a reciprocal jurisdiction as defined 34
4074	4074
4075	4075
4076	4076	LC002603 - Page 111 of 137
4077	4077	under subsections (g)(1)(i)(A) and (g)(1)(i)(B) of this section. Upon removal of a reciprocal 1
4078	4078	jurisdiction from this list, credit for reinsurance ceded to an assuming insurer which has its home 2
4079	4079	office or is domiciled in that jurisdiction shall be allowed, if otherwise allowed pursuant to this 3
4080	4080	chapter. 4
4081	4081	(3) The commissioner shall timely create and publish a list of assuming insurers that have 5
4082	4082	satisfied the conditions set forth in this subsection and to which cessions shall be granted credit in 6
4083	4083	accordance with this subsection. The commissioner may add an assuming insurer to such list, if an 7
4084	4084	NAIC accredited jurisdiction has added such assuming insurer to a list of such assuming insurers 8
4085	4085	or if, upon initial eligibility, the assuming insurer submits the information to the commissioner, as 9
4086	4086	required under subsection (g)(1)(iv) of this section and complies with any additional requirements 10
4087	4087	that the commissioner may impose by regulation, except to the extent that they conflict with an 11
4088	4088	applicable covered agreement. 12
4089	4089	(4) If the commissioner determines that an assuming insurer no longer meets one or more 13
4090	4090	of the requirements under this subsection, the commissioner may revoke or suspend the eligibility 14
4091	4091	of the assuming insurer for recognition under this subsection in accordance with procedures set 15
4092	4092	forth in regulation. 16
4093	4093	(i) While an assuming insurer’s eligibility is suspended, no reinsurance agreement issued, 17
4094	4094	amended, or renewed after the effective date of the suspension qualifies for credit except to the 18
4095	4095	extent that the assuming insurer’s obligations under the contract are secured in accordance with § 19
4096	4096	27-1.1-2. 20
4097	4097	(ii) If an assuming insurer’s eligibility is revoked, no credit for reinsurance may be granted 21
4098	4098	after the effective date of the revocation, with respect to any reinsurance agreements entered into 22
4099	4099	by the assuming insurer, including reinsurance agreements entered into prior to the date of 23
4100	4100	revocation, except to the extent that the assuming insurer’s obligations, under the contract, are 24
4101	4101	secured in a form acceptable to the commissioner and consistent with the provisions of § 27-1.1-2. 25
4102	4102	(5) If subject to a legal process of rehabilitation, liquidation, or conservation, as applicable, 26
4103	4103	the ceding insurer, or its representative, may seek and, if determined appropriate by the court in 27
4104	4104	which the proceedings are pending, may obtain an order requiring that the assuming insurer post 28
4105	4105	security for all outstanding ceded liabilities. 29
4106	4106	(6) Nothing in this subsection shall limit or in any way alter the capacity of parties to a 30
4107	4107	reinsurance agreement to agree on requirements for security or other terms in that reinsurance 31
4108	4108	agreement, except as expressly prohibited by this chapter or other applicable law or regulation. 32
4109	4109	(7) Credit may be taken under this subsection only for reinsurance agreements entered into, 33
4110	4110	amended, or renewed on or after the effective date of the statute adding this subsection, and only 34
4111	4111
4112	4112
4113	4113	LC002603 - Page 112 of 137
4114	4114	with respect to losses incurred and reserves reported on or after the later of: 1
4115	4115	(i) The date on which the assuming insurer has met all eligibility requirements, pursuant to 2
4116	4116	subsection (g)(1) of this section; and 3
4117	4117	(ii) The effective date of the new reinsurance agreement, amendment, or renewal. 4
4118	4118	(A) This subsection (g)(7) does not alter or impair a ceding insurer’s right to take credit for 5
4119	4119	reinsurance, to the extent that credit is not available under this subsection, as long as the reinsurance 6
4120	4120	qualifies for credit, under any other applicable provision of this chapter. 7
4121	4121	(B) Nothing in this subsection shall authorize an assuming insurer to withdraw or reduce 8
4122	4122	the security provided under any reinsurance agreement, except as permitted by the terms of the 9
4123	4123	agreement. 10
4124	4124	(C) Nothing in this subsection shall limit, or in any way alter, the capacity of parties to any 11
4125	4125	reinsurance agreement to renegotiate the agreement. 12
4126	4126	(h) Credit shall be allowed when the reinsurance is ceded to an assuming insurer not 13
4127	4127	meeting the requirements of subsections (b), (c), (d), (e), (f), or (g) of this section, but only as to 14
4128	4128	the insurance of risks located in jurisdictions where the reinsurance is required by applicable law 15
4129	4129	or regulation of that jurisdiction. 16
4130	4130	(i) If the assuming insurer is not licensed, accredited, or certified to transact insurance or 17
4131	4131	reinsurance in this state, the credit permitted by subsections (d) and (e) of this section shall not be 18
4132	4132	allowed unless the assuming insurer agrees in the reinsurance agreements: 19
4133	4133	(1)(i) That in the event of the failure of the assuming insurer to perform its obligations 20
4134	4134	under the terms of the reinsurance agreement, the assuming insurer, at the request of the ceding 21
4135	4135	insurer, shall submit to the jurisdiction of any court of competent jurisdiction in any state of the 22
4136	4136	United States, will comply with all requirements necessary to give the court jurisdiction, and will 23
4137	4137	abide by the final decision of the court or of any appellate court in the event of an appeal; and 24
4138	4138	(ii) To designate the commissioner or a designated attorney as its true and lawful attorney 25
4139	4139	upon whom may be served any lawful process in any action, suit, or proceeding instituted by or on 26
4140	4140	behalf of the ceding insurer. 27
4141	4141	(2) This subsection is not intended to conflict with or override the obligation of the parties 28
4142	4142	to a reinsurance agreement to arbitrate their disputes, if this obligation is created in the agreement. 29
4143	4143	(j) If the assuming insurer does not meet the requirements of subsections (b), (c), (d), or 30
4144	4144	(g), the credit permitted by subsection (e) or (f) of this section shall not be allowed unless the 31
4145	4145	assuming insurer agrees in the trust agreements to the following conditions: 32
4146	4146	(1) Notwithstanding any other provisions in the trust instrument, if the trust fund is 33
4147	4147	inadequate because it contains an amount less than the amount required by subsection (e)(3) of this 34
4148	4148
4149	4149
4150	4150	LC002603 - Page 113 of 137
4151	4151	section, or if the grantor of the trust has been declared insolvent or placed into receivership, 1
4152	4152	rehabilitation, liquidation, or similar proceedings under the laws of its state or country of domicile, 2
4153	4153	the trustee shall comply with an order of the commissioner with regulatory oversight over the trust 3
4154	4154	or with an order of a court of competent jurisdiction directing the trustee to transfer to the 4
4155	4155	commissioner with regulatory oversight all of the assets of the trust fund; 5
4156	4156	(2) The assets shall be distributed by and claims shall be filed with and valued by the 6
4157	4157	commissioner with regulatory oversight in accordance with the laws of the state in which the trust 7
4158	4158	is domiciled that are applicable to the liquidation of domestic insurance companies; 8
4159	4159	(3) If the commissioner with regulatory oversight determines that the assets of the trust 9
4160	4160	fund or any part thereof are not necessary to satisfy the claims of the United States ceding insurers 10
4161	4161	of the grantor of the trust, the assets or part thereof shall be returned by the commissioner with 11
4162	4162	regulatory oversight to the trustee for distribution in accordance with the trust agreement; and 12
4163	4163	(4) The grantor shall waive any right otherwise available to it under United States law that 13
4164	4164	is inconsistent with this provision. 14
4165	4165	(k) If an accredited or certified reinsurer ceases to meet the requirements for accreditation 15
4166	4166	or certification, the commissioner may suspend or revoke the reinsurer’s accreditation or 16
4167	4167	certification. 17
4168	4168	(1) The commissioner must give the reinsurer notice and opportunity for hearing. The 18
4169	4169	suspension or revocation may not take effect until after the commissioner’s order on hearing, 19
4170	4170	unless: 20
4171	4171	(i) The reinsurer waives its right to hearing; 21
4172	4172	(ii) The commissioner’s order is based on regulatory action by the reinsurer’s domiciliary 22
4173	4173	jurisdiction or the voluntary surrender or termination of the reinsurer’s eligibility to transact 23
4174	4174	insurance or reinsurance business in its domiciliary jurisdiction or in the primary certifying state of 24
4175	4175	the reinsurer under subparagraph (f)(6) of this section; or 25
4176	4176	(iii) The commissioner finds that an emergency requires immediate action and a court of 26
4177	4177	competent jurisdiction has not stayed the commissioner’s action. 27
4178	4178	(2) While a reinsurer’s accreditation or certification is suspended, no reinsurance contract 28
4179	4179	issued or renewed after the effective date of the suspension qualifies for credit except to the extent 29
4180	4180	that the reinsurer’s obligations under the contract are secured in accordance with § 27-1.1-2. If a 30
4181	4181	reinsurer’s accreditation or certification is revoked, no credit for reinsurance may be granted after 31
4182	4182	the effective date of the revocation except to the extent that the reinsurer’s obligations under the 32
4183	4183	contract are secured in accordance with subsection (f)(5) or § 27-1.1-2. 33
4184	4184	(l) Concentration Risk. 34
4185	4185
4186	4186
4187	4187	LC002603 - Page 114 of 137
4188	4188	(1) A ceding insurer shall take steps to manage its reinsurance recoverables proportionate 1
4189	4189	to its own book of business. A domestic ceding insurer shall notify the commissioner within thirty 2
4190	4190	(30) days after reinsurance recoverables from any single assuming insurer, or group of affiliated 3
4191	4191	assuming insurers, exceeds fifty percent (50%) of the domestic ceding insurer’s last reported 4
4192	4192	surplus to policyholders, or after it is determined that reinsurance recoverables from any single 5
4193	4193	assuming insurer, or group of affiliated assuming insurers, is likely to exceed this limit. The 6
4194	4194	notification shall demonstrate that the exposure is safely managed by the domestic ceding insurer. 7
4195	4195	(2) A ceding insurer shall take steps to diversify its reinsurance program. A domestic 8
4196	4196	ceding insurer shall notify the commissioner within thirty (30) days after ceding to any single 9
4197	4197	assuming insurer, or group of affiliated assuming insurers, more than twenty percent (20%) of the 10
4198	4198	ceding insurer’s gross written premium in the prior calendar year, or after it has determined that 11
4199	4199	the reinsurance ceded to any single assuming insurer, or group of affiliated assuming insurers, is 12
4200	4200	likely to exceed this limit. The notification shall demonstrate that the exposure is safely managed 13
4201	4201	by the domestic ceding insurer. 14
4202	4202	SECTION 11. Section 27-4.4-4 of the General Laws in Chapter 27-4.4 entitled "The 15
4203	4203	Standard Nonforfeiture Law for Individual Deferred Annuities" is hereby amended to read as 16
4204	4204	follows: 17
4205	4205	27-4.4-4. Minimum values. 18
4206	4206	(a) The minimum values as specified in §§ 27-4.4-5 — 27-4.4-8 and 27-4.4-10 of any paid-19
4207	4207	up annuity, cash surrender, or death benefits available under an annuity contract shall be based 20
4208	4208	upon minimum nonforfeiture amounts as defined in this section. 21
4209	4209	(b) The minimum nonforfeiture amount at any time at or prior to the commencement of 22
4210	4210	any annuity payments shall be equal to an accumulation up to that time at rates of interest as 23
4211	4211	provided in subsection (d) of this section, of the net considerations as defined in this section paid 24
4212	4212	prior to that time, decreased by the sum of: 25
4213	4213	(1) Any prior withdrawals from or partial surrenders of the contract accumulated at rates 26
4214	4214	of interest as provided in subsection (d) of this section; 27
4215	4215	(2) The amount of any indebtedness to the company on the contract, including interest due 28
4216	4216	and accrued; 29
4217	4217	(3) An annual contract charge of fifty dollars ($50.00), accumulated at rates of interest as 30
4218	4218	provided in subsection (d) of this section; and 31
4219	4219	(4) Any premium tax paid by the company for the contract, accumulated at rates of interest 32
4220	4220	as provided in subsection (d) of this section. 33
4221	4221	(c) The net considerations for a given contract year used to define the minimum 34
4222	4222
4223	4223
4224	4224	LC002603 - Page 115 of 137
4225	4225	nonforfeiture amount shall be an amount equal to eighty-seven and one-half percent (87.5%) of the 1
4226	4226	gross considerations credited to the contract during that contract year. 2
4227	4227	(d) The interest rate used in determining minimum nonforfeiture amounts shall be an 3
4228	4228	annual rate of interest determined as the lesser of three percent (3%) per annum and the following, 4
4229	4229	which shall be specified in the contract if the interest rate will be reset: 5
4230	4230	(1) The five-year (5) Constant Maturity Treasury Rate reported by the Federal Reserve as 6
4231	4231	of a date, or average over a period, rounded to the nearest one twentieth of one percent (
4232	4232	1
4233	4233	/20%), 7
4234	4234	specified in the contract no longer than fifteen (15) months prior to the contract issue date or 8
4235	4235	redetermination date under subsection (d)(4) of this section; 9
4236	4236	(2) Reduced by one hundred twenty-five (125) basis points; 10
4237	4237	(3) Where the resulting interest rate is not less than one percent (1%); and 11
4238	4238	(4) The interest rate shall apply for an initial period and may be redetermined for additional 12
4239	4239	periods. The redetermination date, basis and period, if any, shall be stated in the contract. The basis 13
4240	4240	is the date or average over a specified period that produces the value of the five-year (5) Constant 14
4241	4241	Maturity Treasury Rate to be used at each redetermination date. 15
4242	4242	(e) During the period or term that a contract provides substantive participation in an equity 16
4243	4243	indexed benefit, it may increase the reduction described in subsection (d)(2) of this section above 17
4244	4244	by up to an additional one hundred (100) basis points to reflect the value of the equity index benefit. 18
4245	4245	The present value at the contract issue date, and at each redetermination date thereafter, of the 19
4246	4246	additional reduction shall not exceed the market value of the benefit. The commissioner of 20
4247	4247	insurance may require a demonstration that the present value of the reduction does not exceed the 21
4248	4248	market value of the benefit. Lacking such a demonstration that is acceptable to the commissioner, 22
4249	4249	the commissioner may disallow or limit the additional reduction. 23
4250	4250	(f) The commissioner of insurance may adopt rules to implement the provisions of 24
4251	4251	subsection (e) of this section and to provide for further adjustments to the calculation of minimum 25
4252	4252	nonforfeiture amounts for contracts that provide substantive participation in an equity index benefit 26
4253	4253	and for other contracts that the commissioner determines adjustments are justified. 27
4254	4254	SECTION 12. Sections 42-8.1-2, 42-8.1-11 and 42-8.1-17 of the General Laws in Chapter 28
4255	4255	42-8.1 entitled "State Archives" are hereby amended to read as follows: 29
4256	4256	42-8.1-2. Definitions. 30
4257	4257	For the purpose of this chapter: 31
4258	4258	(1) “Agency” or “public body” means any executive, legislative, judicial, regulatory, 32
4259	4259	administrative body of the state or any political subdivision thereof; including, but not limited to 33
4260	4260	the leadership of the general assembly, chairperson in the house and senate, public officials elected 34
4261	4261
4262	4262
4263	4263	LC002603 - Page 116 of 137
4264	4264	or appointed and any department, division, agency, commission, board, office, bureau, authority, 1
4265	4265	any school, fire, or water district, or other agency or quasi-public agency of state or local 2
4266	4266	government that exercises governmental functions, any other public or private agency, person, 3
4267	4267	partnership, corporation, or business entity acting on behalf of any public agency. 4
4268	4268	(2) “Archive” means an establishment maintained primarily for the storage, servicing, 5
4269	4269	security, and processing of records that must be preserved permanently for historical, legal, or other 6
4270	4270	value and need not be retained in office equipment and space. 7
4271	4271	(3) “Archives of the state” means those official records that have been determined by the 8
4272	4272	state archivist to have permanent value to warrant their continued preservation by the state, and 9
4273	4273	have been accepted by the state archivist for deposit in his or her custody. 10
4274	4274	(4) “Authenticated copies” means exact copies or reproductions of records or other 11
4275	4275	materials that are certified as such under seal and that need be legally accepted as evidence. 12
4276	4276	(5) “Custodian” means any authorized person having personal custody and control of the 13
4277	4277	public records in question. 14
4278	4278	(6) “Division” means the division of state archives of the department of state. 15
4279	4279	(7) “Official custodian” means and includes any officer or employee of the state or any 16
4280	4280	agency, institution, or political subdivision thereof, who is responsible for the maintenance, care, 17
4281	4281	and keeping of public records, regardless of whether such records are in his or her actual personal 18
4282	4282	custody and control. 19
4283	4283	(8) “Permanent records” means public records or records that are established in the records 20
4284	4284	retention schedule at the time of creation, which shall not be destroyed, and are determined to have 21
4285	4285	enduring, legal, and or historical value to the state. 22
4286	4286	(9) “Person” means and includes any natural person, corporation, partnership, firm, or 23
4287	4287	association. 24
4288	4288	(10) “Personal paper(s)” means documents unrelated to work but maintained at a place of 25
4289	4289	work by an employee or general officers of the state government of Rhode Island. 26
4290	4290	(11) “Political subdivision” means and includes every city, town, school district, fire 27
4291	4291	district, water or sanitation district, or any other special district or other quasi-public agency within 28
4292	4292	the state. 29
4293	4293	(12) “Public record” or “public records” means public records as defined in chapter 2 of 30
4294	4294	title 38, “Access to Public Records”. 31
4295	4295	(13) “Records” means all books, letters, papers, maps, photographs, tapes, films, sound 32
4296	4296	recordings, machine-readable records, or any other documentary materials, regardless of physical 33
4297	4297	form or characteristics, made or received by any governmental agency, office, or general officer in 34
4298	4298
4299	4299
4300	4300	LC002603 - Page 117 of 137
4301	4301	pursuance of law or in connection with the transaction of public business and preserved or 1
4302	4302	appropriate for preservation by the agency or its legitimate successor as evidence of the 2
4303	4303	organization, functions, policies, decisions, procedures, operations, or other activities of the 3
4304	4304	government or because of the value of the official government data contained therein. As used in 4
4305	4305	this part 1 this subsection, the following are excluded from the definition of records: 5
4306	4306	(i) Materials preserved or appropriate for preservation because of the value of the data 6
4307	4307	contained therein other than that of an official government nature or because of the historical value 7
4308	4308	of the materials themselves; 8
4309	4309	(ii) Library books, pamphlets, newspapers, or museum material made, acquired, or 9
4310	4310	preserved for reference, historical, or exhibition purposes; 10
4311	4311	(iii) Private papers, manuscripts, letters, diaries, pictures, biographies, books, and maps, 11
4312	4312	including materials and collections previously owned by persons other than the state or any political 12
4313	4313	subdivision thereof; 13
4314	4314	(iv) Extra copies of publications or duplicated documents preserved for convenience of 14
4315	4315	reference; and 15
4316	4316	(v) Stocks of publications. 16
4317	4317	(14) “State archives” means the official state repository or any other repository approved 17
4318	4318	by the state archivist for long-term or permanent records. 18
4319	4319	(15) “State archivist” means the individual who coordinates, directs, and administers the 19
4320	4320	activities and responsibilities of the state archives. 20
4321	4321	42-8.1-11. Transfer of records to archives. 21
4322	4322	(a) Those records deemed by the public officer having custody thereof to be unnecessary 22
4323	4323	for the transaction of the business of his or her office and yet deemed by the public records 23
4324	4324	administrator, attorney general, or the auditor general and the state archivist to be permanent 24
4325	4325	records shall be transferred, with the consent of the state archivist, to the custody of the division of 25
4326	4326	state archives. A list of all records so transferred, together with a statement certifying compliance 26
4327	4327	with the provisions of this chapter signed by the state archivist, shall be preserved in the files of the 27
4328	4328	office from which the records were drawn and in the files of the division. 28
4329	4329	(b) Those records created or received by general officers, immediate staff, or a unit or 29
4330	4330	individual of the executive office whose function is to advise and assist general officers, in the 30
4331	4331	course of conducting activities that relate to or have an effect upon the carrying out of the 31
4332	4332	constitutional, statutory, or other official duties carried out on behalf of the state. Such materials 32
4333	4333	shall be transferred at the end of the official’s final term within thirty (30) days of leaving the office. 33
4334	4334	(c) Items in the care, custody, and trusteeship of the state archivist that are not records as 34
4335	4335
4336	4336
4337	4337	LC002603 - Page 118 of 137
4338	4338	defined by chapter 2 of title 38 and items that are not records that are proposed for disposition but 1
4339	4339	determined to be of historical or museum interest or value by the state archivist may be transferred 2
4340	4340	to the custody of the Rhode Island historical society or other local historical societies. 3
4341	4341	(d) Qualified researchers, scholars, and students and other appropriate persons performing 4
4342	4342	qualified research shall have the right of reasonable access to all records in the custody of the state 5
4343	4343	archivist for purposes of historical reference, research, and information, subject to the provisions 6
4344	4344	of chapter 2 of title 38. Copies of records, having historical, or museum interest or value shall be 7
4345	4345	furnished by the state archivist upon request of any person, society, state agency, or political 8
4346	4346	subdivision, subject to restraints of standard archival practices. 9
4347	4347	(e) In the event of disagreement as to the custody of any records as defined in § 38-3-6, the 10
4348	4348	archivist with the advice of the attorney general and auditor general shall make final and conclusive 11
4349	4349	determination, and order and direct custody accordingly per § 38-3-6. 12
4350	4350	42-8.1-17. Duties of agencies. 13
4351	4351	It shall be the duty of each agency of the state and political subdivision thereof to: 14
4352	4352	(1) Assist in the creation of record control schedules containing adequate and proper 15
4353	4353	documentation of the organization, functions, policies, decisions, procedures, and essential 16
4354	4354	transactions of the agency and designed to furnish the information necessary to protect public 17
4355	4355	records created or received by the agency until they have met retention requirements; 18
4356	4356	(2) Cooperate fully with the division in complying with the provisions of this chapter; 19
4357	4357	(3) Establish and maintain an active and continuing program for the preservation of 20
4358	4358	permanent records and assist the division to implement the provisions of this chapter. Agencies that 21
4359	4359	do not transfer permanent records to the state archives shall submit an annual preservation report 22
4360	4360	to the state archives; and 23
4361	4361	(4) Establish necessary safeguards against the removal or loss of records. These safeguards 24
4362	4362	shall include notification to all officials and employees of the agency that no records in the custody 25
4363	4363	of the agency are to be alienated or destroyed except in accordance with the provisions of this 26
4364	4364	chapter, §§ 38-1-10 and 38-3-6. 27
4365	4365	(5) [Deleted by P.L. 2022, ch. 127, § 1 and P.L. 2022, ch. 128, § 1.] 28
4366	4366	SECTION 13. Section 44-9-46 of the General Laws in Chapter 44-9 entitled "Tax Sales" 29
4367	4367	is hereby amended to read as follows: 30
4368	4368	44-9-46. Forms. 31
4369	4369	The following forms may be used in proceedings for the collection of taxes under this 32
4370	4370	chapter, and, if substantially followed, they shall be deemed sufficient for the proceedings to which 33
4371	4371	they relate; but other suitable forms may also be used. 34
4372	4372
4373	4373
4374	4374	LC002603 - Page 119 of 137
4375	4375	Form No. 1 1
4376	4376	§ 44-9-18 2
4377	4377	This notice to be sent by registered or certified mail. 3
4378	4378	NOTICE OF INTENTION TO ASSIGN TAX TITLE 4
4379	4379	State of Rhode Island 5
4380	4380	________________________ 6
4381	4381	Name of City or Town 7
4382	4382	OFFICE OF THE TREASURER 8
4383	4383	_____________________________________________________________________, 20 ____ 9
4384	4384	(Name of owner of record) 10
4385	4385	_____________________________________________________________________________ 11
4386	4386	(Last known address) 12
4387	4387	You are hereby notified that after the expiration of ten (10) days from the date of this notice 13
4388	4388	I, _________, Treasurer of the City - Town of _________, intend to assign and transfer to 14
4389	4389	_________ the tax title on the hereinafter described land upon the payment by him or her of a sum 15
4390	4390	not less than the amount necessary for redemption, the tax title having been acquired by the city or 16
4391	4391	town under a tax collector's deed dated _________, 20 _________, and recorded in the Registry of 17
4392	4392	Deeds, Book _________, Page ______. 18
4393	4393	DESCRIPTION OF LAND 19
4394	4394	____________ Treasurer 20
4395	4395	of ________________________ 21
4396	4396	Name of City or Town 22
4397	4397	Form No. 2 23
4398	4398	§ 44-9-18 24
4399	4399	INSTRUMENT OF ASSIGNMENT OF TAX TITLE 25
4400	4400	(This instrument must be recorded within sixty (60) days from its date) 26
4401	4401	STATE OF RHODE ISLAND 27
4402	4402	________________________ 28
4403	4403	Name of City or Town 29
4404	4404	OFFICE OF THE TREASURER 30
4405	4405	I, ________, Treasurer of the City - Town of _________, pursuant to the provisions of § 31
4406	4406	44-9-18, in consideration of _________/100 dollars to me paid, do hereby on behalf of the city - 32
4407	4407	town assign and transfer to (Name of Assignee) of (No., Street, City, State), the tax title acquired 33
4408	4408	by the city - town on the hereinafter described land under a tax collector's deed dated ________ 20 34
4409	4409
4410	4410
4411	4411	LC002603 - Page 120 of 137
4412	4412	______, and recorded in the _______ Registry of Deeds, Book _______, Page ______. 1
4413	4413	DESCRIPTION OF LAND 2
4414	4414	The above-mentioned sum is not less than the amount necessary for redemption, and 3
4415	4415	includes all taxes assessed on the land subsequent to the assessment, for nonpayment of which the 4
4416	4416	land was so purchased, and which have not been paid. 5
4417	4417	On ________, 20 ______, notice of intended assignment was sent by registered or certified 6
4418	4418	mail to the owner of record as follows: 7
4419	4419	________________________________ __________________________ 8
4420	4420	(Name) (Last known address) 9
4421	4421	In Witness Whereof, I have hereunto set my hand and seal this ________ day of ________, 10
4422	4422	20 _____. 11
4423	4423	WITNESS 12
4424	4424	__________________________ 13
4425	4425	Treasurer 14
4426	4426	STATE OF RHODE ISLAND, 15
4427	4427	County of ________________ 16
4428	4428	In the _______ of ________ this ________ day of _______ 20____, personally appeared 17
4429	4429	before me _________, Treasurer of the City - Town of __________, known to me and known by 18
4430	4430	me to be the person who executed the foregoing instrument, and acknowledged the instrument, by 19
4431	4431	him or her signed in that capacity to be his or her free and voluntary act and deed. 20
4432	4432	__________________________ 21
4433	4433	Notary Public 22
4434	4434	Form No. 3 23
4435	4435	§ 44-9-20 24
4436	4436	FORM OF DEED WHEN ESTATE IS REDEEMED 25
4437	4437	UNDER SECTION 44-9-19 26
4438	4438	KNOW ALL MEN BY THESE PRESENTS, 27
4439	4439	That the ________ of ________, in consideration of ________, to it paid by ________ of 28
4440	4440	________, the receipt whereof is hereby acknowledged, does hereby remise, release, and forever 29
4441	4441	quitclaim unto ________ all the right, title, and interest which ________ of ________ acquired, by 30
4442	4442	or under a deed made to it by the Collector of Taxes for the city - town of ________, dated 31
4443	4443	________ 20 ____, and recorded in Deed Book ________ Page ________ in and to the following 32
4444	4444	parcel of real estate: 33
4445	4445	(Description) 34
4446	4446
4447	4447
4448	4448	LC002603 - Page 121 of 137
4449	4449	To have and to hold the above-released premises, with all the privileges and appurtenances 1
4450	4450	to the premises belonging, to _____, h _____ heirs and assigns, to h ____ and their use and behoof 2
4451	4451	forever. 3
4452	4452	In witness whereof, etc. 4
4453	4453	__________________________ 5
4454	4454	By: __________________________ 6
4455	4455	Treasurer 7
4456	4456	Acknowledgment. See Form 2. 8
4457	4457	Form No. 4 9
4458	4458	§ 44-9-23 10
4459	4459	TREASURER'S CERTIFICATE OF RECEIPT OF 11
4460	4460	MONEY PAID FOR PURPOSE OF REDEMPTION 12
4461	4461	STATE OF RHODE ISLAND 13
4462	4462	________________________ 14
4463	4463	Name of City or Town 15
4464	4464	OFFICE OF THE TREASURER 16
4465	4465	I, ______, Treasurer of the City - Town of ______, hereby certify that on this day of 17
4466	4466	______, 20 ____, pursuant to the provisions of § 44-9-19 - 44-9-23, (Name of person redeeming) 18
4467	4467	______, residing at ______ (No., Street, City or Town, and State), ______ who claims to be the 19
4468	4468	holder of an interest in - a mortgage on the land hereinafter described, which was purchased for 20
4469	4469	nonpayment of the 20 ____ tax assessed thereon to ______, has paid to me as Treasurer of the city 21
4470	4470	- town the amount of ______/100 dollars for the purpose of redeeming the land from the tax title 22
4471	4471	thereby held by (Present holder of tax title), residing at ______ (No., Street, City or Town, and 23
4472	4472	State) ______, under a tax collector's deed dated ______, 20 ____, and recorded in ______ Registry 24
4473	4473	of Deeds, Book ______, Page ____. 25
4474	4474	(If there has been no assignment, strike out the following reference) 26
4475	4475	_____________________________________________________________________________ 27
4476	4476	the tax title having been assigned to the above-named ______ (present holder of tax title) 28
4477	4477	______ by instrument of assignment dated ______, 20 ____, and recorded in the registry, Book 29
4478	4478	______, Page ____ 30
4479	4479	The above-mentioned amount is computed as follows: 31
4480	4480	(Strike out whichever computation is inapplicable) 32
4481	4481	TITLE HELD BY ORIGINAL PURCHASER TITLE HELD BY ASSIGNEE 33
4482	4482	Original Sum for which Amount Stated in Instrument 34
4483	4483
4484	4484
4485	4485	LC002603 - Page 122 of 137
4486	4486	Land was Sold $.... of Assignment $.... 1
4487	4487	Intervening Taxes and Costs Paid Taxes and Costs Paid by 2
4488	4488	by Purchaser .... Assignee since Assignment .... 3
4489	4489	Interest According to Law .... Interest According to Law .... 4
4490	4490	Recording .... Recording .... 5
4491	4491	____ ____ 6
4492	4492	TOTAL AMOUNT PAID $.... TOTAL AMOUNT PAID $.... 7
4493	4493	DESCRIPTION OF LAND 8
4494	4494	In Witness, etc. 9
4495	4495	__________________________ 10
4496	4496	By: __________________________ 11
4497	4497	Treasurer 12
4498	4498	Acknowledgment. See Form 2. 13
4499	4499	Form No. 5 14
4500	4500	§ 44-9-25 15
4501	4501	STATE OF RHODE ISLAND 16
4502	4502	PETITION TO FORECLOSE RIGHT OF REDEMPTION 17
4503	4503	To the Honorable Judges of the Superior Court: 18
4504	4504	The undersigned hereby represents that the land hereinafter described was sold on ____ 19
4505	4505	(Date of sale) ____ for nonpayment of taxes by the town or city of _____ in the County of _____ 20
4506	4506	by instrument dated ____ and duly recorded on (Date) ____ in Book _____, Page ______; that 21
4507	4507	more than one year from the date of the sale has elapsed and no redemption has been made; that 22
4508	4508	these proceedings have been conducted according to law; that the deed was recorded within sixty 23
4509	4509	(60) days from date of sale - that the undersigned now holds title under the instrument; that the 24
4510	4510	following are the names and addresses of all persons known to the undersigned who have any 25
4511	4511	interest in the land, other than the petitioner to wit: (Also give name of wife or husband of the 26
4512	4512	equity owner) 27
4513	4513	Name _______ Address ________ Nature of Interest __________ that the assessed value 28
4514	4514	of the land and buildings is $_________; and that the land is described as follows: 29
4515	4515	(Description) 30
4516	4516	WHEREFORE your petitioner prays that the rights of all persons entitled to redeem from 31
4517	4517	the proceedings may be foreclosed, that the Court enter a decree that the title of the petitioner to 32
4518	4518	the land under the proceedings is absolute, and that all rights of redemption are barred, and for such 33
4519	4519	other and further relief as may seem meet and proper to the Court. 34
4520	4520
4521	4521
4522	4522	LC002603 - Page 123 of 137
4523	4523	Name _______________________ 1
4524	4524	Address ______________________ 2
4525	4525	On this __________ day of __________, 20 ______, personally appeared before me the 3
4526	4526	within named, known to me to be the signer of the foregoing petition, and made oath that the 4
4527	4527	statements therein contained so far as made of __________ own knowledge are true and so far as 5
4528	4528	made upon information and belief that __________ believe them to be true. 6
4529	4529	Before me 7
4530	4530	__________________________ 8
4531	4531	Notary Public 9
4532	4532	__________________________ 10
4533	4533	Attorney for Petitioner 11
4534	4534	Form No. 6 12
4535	4535	§ 44-9-27 13
4536	4536	CITATION 14
4537	4537	STATE OF RHODE ISLAND 15
4538	4538	OFFICE OF THE CLERK OF THE SUPERIOR COURT 16
4539	4539	PETITION TO FORECLOSE RIGHT OF REDEMPTION 17
4540	4540	No. 18
4541	4541	TO ALL WHOM IT MAY CONCERN, and to ________________________ 19
4542	4542	Whereas, a petition has been presented to the Court by __________ of __________ in the 20
4543	4543	County of __________ and the State to foreclose all rights of redemption from the lien proceedings 21
4544	4544	described in the petition in and concerning a certain parcel of land situate in the County of 22
4545	4545	__________ and in the State, bounded and described in the petition as follows: 23
4546	4546	(Description) 24
4547	4547	If you desire to make any objection or defense to the petition, you or your attorney must 25
4548	4548	file a written appearance and an answer, under oath, setting forth clearly and specifically your 26
4549	4549	objections or defense to each part of the petition, in the office of the Superior Court in __________ 27
4550	4550	on or before the __________ day of __________ next, that you may then and there show cause, if 28
4551	4551	any, why the prayer of the petition should not be granted. 29
4552	4552	Unless your appearance is filed by or for you, your default will be recorded, the petition 30
4553	4553	will be taken as confessed, and you will be forever barred from contesting the petition or any decree 31
4554	4554	entered thereon. And in addition to the usual service of this notice as required by law, it is ordered 32
4555	4555	that the foregoing citation be published once each week for three (3) successive weeks in the 33
4556	4556	__________ a newspaper published in __________ (optional). 34
4557	4557
4558	4558
4559	4559	LC002603 - Page 124 of 137
4560	4560	Witness, the Seal of our Superior Court at _______ this _______ day of ______, 20 ____. 1
4561	4561	__________________________ Clerk 2
4562	4562	CERTIFICATE OF SERVICE BY REGISTERED 3
4563	4563	OR CERTIFIED MAIL 4
4564	4564	I hereby certify that I have this day served the foregoing citation by causing to be mailed a 5
4565	4565	duly attested copy thereof of each respondent named therein whose address was furnished by the 6
4566	4566	petitioner or otherwise known to me, the copies being sent by _________ mail and return receipts 7
4567	4567	required. 8
4568	4568	__________________________ 9
4569	4569	Attorney for Petitioner 10
4570	4570	CERTIFICATE OF SERVICE BY PUBLICATION 11
4571	4571	_________________ 20 _____ 12
4572	4572	I hereby certify that I have caused the foregoing citation to be published once each week 13
4573	4573	for three (3) successive weeks in the _______ a newspaper published in ________, in the County 14
4574	4574	of _______, and the State, to wit: on the _______ day of _______, the _______ day of ________, 15
4575	4575	and the ________ day of _______, 20 ____, a copy of which publication is hereto annexed. 16
4576	4576	__________________________ 17
4577	4577	Attorney for Petitioner 18
4578	4578	Form No. 7 19
4579	4579	§ 44-9-32 20
4580	4580	(To be recorded in the Registry of Deeds) 21
4581	4581	NOTICE OF FILING PETITION 22
4582	4582	STATE OF RHODE ISLAND 23
4583	4583	SUPERIOR COURT 24
4584	4584	To all whom it may concern: 25
4585	4585	____________________________________________________________________________ 26
4586	4586	____________________________________________________________________________ 27
4587	4587	hereby give notice that, on the _______ day _______ of _______, 20 ____ filed in the Court a 28
4588	4588	petition against* to foreclose the right of redemption acquired under a certain tax deed (or deeds) 29
4589	4589	from the Collector of Taxes for the City (or Town) of ______, in the County of ______ and the 30
4590	4590	State, to me dated ______, and recorded with ______ Deeds in Book _____, Page _______ the 31
4591	4591	deed (or deeds) covers a certain parcel of land situated in _______ in the County of ________ and 32
4592	4592	the State, which is described as follows: 33
4593	4593	(Description) 34
4594	4594
4595	4595
4596	4596	LC002603 - Page 125 of 137
4597	4597	__________________________ 1
4598	4598	*Name all respondents as in petition. 2
4599	4599	Form No. 8 3
4600	4600	§ 44-9-28 4
4601	4601	MOTION FOR DECREE PRO CONFESSO 5
4602	4602	STATE OF RHODE ISLAND 6
4603	4603	SUPERIOR COURT 7
4604	4604	No. ____________ 8
4605	4605	In the matter of the Petition of _____________________________________________ 9
4606	4606	And now comes the petitioner in the above-entitled case and moves that a general default 10
4607	4607	of all parties respondent, whether named in the notice or not, who have not appeared or answered, 11
4608	4608	be recorded, and that the application as to them be taken for confessed. 12
4609	4609	__________________________ 13
4610	4610	Attorney for Petitioner 14
4611	4611	Form No. 9 15
4612	4612	§ 44-9-30 16
4613	4613	FINAL DECREE IN TAX LIEN CASE 17
4614	4614	STATE OF RHODE ISLAND 18
4615	4615	SUPERIOR COURT 19
4616	4616	Case No.______________ 20
4617	4617	vs. 21
4618	4618	DECREE 22
4619	4619	This case came on to be heard and was argued by counsel, and thereupon, upon 23
4620	4620	consideration thereof, it is 24
4621	4621	ORDERED, ADJUDGED AND DECREED that all rights of redemption are forever 25
4622	4622	foreclosed and barred under the deed given by the Collector of Taxes for the ______ of _____ in 26
4623	4623	the County of _____ and the State, dated _____ and duly recorded in Book _____, Page _____ 27
4624	4624	By the Court. 28
4625	4625	Attest: 29
4626	4626	__________________________ 30
4627	4627	Clerk 31
4628	4628	Dated ______________ 32
4629	4629	Form No. 10 33
4630	4630	§ 44-9-32 34
4631	4631
4632	4632
4633	4633	LC002603 - Page 126 of 137
4634	4634	NOTICE OF DISPOSAL IN TAX LIEN CASE 1
4635	4635	STATE OF RHODE ISLAND 2
4636	4636	SUPERIOR COURT 3
4637	4637	This is to certify that the petition of 4
4638	4638	vs. 5
4639	4639	to foreclose the right of redemption under certain deed _______ for nonpayment of taxes, 6
4640	4640	given by the Collector of Taxes for the _______ in the County of _______ and the State, dated 7
4641	4641	______ and duly recorded in Book ______, Page ______ was filed in this Court on _________. 8
4642	4642	Thereafter due proceedings under the petition were instituted according to law, and finally 9
4643	4643	on _______, a decree forever foreclosing and barring all rights of redemption under the deed was 10
4644	4644	entered, and this notice of final disposition of the petition is directed to be recorded in the Registry 11
4645	4645	of Deeds for the City of _______ in _______ County, pursuant to § 44-9-32. 12
4646	4646	By the Court, 13
4647	4647	Attest: 14
4648	4648	__________________________ 15
4649	4649	Clerk 16
4650	4650	Dated ______________ 17
4651	4651	Form No. 11 18
4652	4652	§ 44-9-36 19
4653	4653	NOTICE OF SALE -- LAND OF LOW VALUE 20
4654	4654	STATE OF RHODE ISLAND 21
4655	4655	________________________ 22
4656	4656	Name of City or Town 23
4657	4657	OFFICE OF THE TREASURER 24
4658	4658	_______________, 20 _______ 25
4659	4659	NOTICE IS HEREBY GIVEN THAT ON ____________ the______ day of ______, 20 26
4660	4660	___ , at ______ o'clock ____ M., at ______ (Place of Sale) ____________ pursuant to the 27
4661	4661	provisions of §§ 44-9-36 -- 44-9-45, I SHALL OFFER FOR SALE AT PUBLIC AUCTION, 28
4662	4662	severally or together, certain parcels of land of low value listed below, these parcels having been 29
4663	4663	purchased by the City _________ Town of _________ for nonpayment of the taxes due thereon. 30
4664	4664	(List of Parcels) 31
4665	4665	__________________________ 32
4666	4666	Treasurer 33
4667	4667	of __________________________ 34
4668	4668
4669	4669
4670	4670	LC002603 - Page 127 of 137
4671	4671	(Name of City or Town) 1
4672	4672	To be posted in some convenient and public place in the city or town at least fourteen (14) 2
4673	4673	days before the sale. 3
4674	4674	Form No. 12 4
4675	4675	§ 44-9-36 5
4676	4676	NOTICE OF SALE 6
4677	4677	LAND OF LOW VALUE 7
4678	4678	STATE OF RHODE ISLAND 8
4679	4679	________________________ 9
4680	4680	Name of City or Town 10
4681	4681	OFFICE OF THE TREASURER 11
4682	4682	_______________, 20 _______ 12
4683	4683	NOTICE IS HEREBY GIVEN THAT on ______, 20 ___, at _____ M., at ______ (Place 13
4684	4684	of Sale) ______, pursuant to the provisions of §§ 44-9-36 -- 44-9-45, I SHALL OFFER FOR SALE 14
4685	4685	AT PUBLIC AUCTION, severally or together, certain parcels of land of low value listed below, 15
4686	4686	these parcels having been purchased by the City -- Town of _______ for nonpayment of the taxes 16
4687	4687	due thereon. 17
4688	4688	(List of parcels) 18
4689	4689	Further notice is given that the following land in which you appear to have an interest is 19
4690	4690	included in the sale. 20
4691	4691	(Description as given in original notice of sale) 21
4692	4692	Amount Required for Redemption on Above Date of Sale, $________ 22
4693	4693	Your attention is directed to § 44-9-39 as follows: 23
4694	4694	"Any person having a right of redemption or any other interest in the land conveyed or 24
4695	4695	purporting to be conveyed under § 44-9-36 or § 44-9-38, upon whom service of the notice of sale 25
4696	4696	provided in § 4-9-36 44-9-36 has been made by registered or certified mail, who, prior to the sale, 26
4697	4697	neither redeems the land nor brings proceedings to enjoin the sale, shall, upon the recording of the 27
4698	4698	deed as required by § 44-9-36 or § 44-9-38, be forever barred from raising any question concerning 28
4699	4699	the validity of the title conveyed, and a statement contained in the treasurer's deed that service has 29
4700	4700	been made, naming the persons who were served by registered or certified mail, shall be prima 30
4701	4701	facie evidence of service." 31
4702	4702	_____________________________________ 32
4703	4703	Treasurer of City _____ Town of _____ 33
4704	4704	Send this notice by registered or certified mail, return receipt requested, at least fourteen 34
4705	4705
4706	4706
4707	4707	LC002603 - Page 128 of 137
4708	4708	(14) days before the sale, to any person having a right of redemption or any other interest in any of 1
4709	4709	the parcels to be sold. 2
4710	4710	Form No. 13 3
4711	4711	§ 44-9-36 4
4712	4712	This deed is not valid unless recorded in the proper registry of deeds within sixty (60) days 5
4713	4713	after the sale. 6
4714	4714	TREASURER'S DEED TO A PERSON -- LAND OF 7
4715	4715	LOW VALUE 8
4716	4716	STATE OF RHODE ISLAND 9
4717	4717	________________________ 10
4718	4718	Name of city or town 11
4719	4719	OFFICE OF THE TREASURER 12
4720	4720	I, _________, Treasurer of the City - Town of _______ pursuant to the provisions of § 44-13
4721	4721	9-36, in consideration of ______/100 dollars to me paid, hereby grant to ______ of ______ the 14
4722	4722	parcel-parcels of land described in the tax collector's deed to which reference is made in the 15
4723	4723	following schedule: 16
4724	4724	____________________________________________________________________________ 17
4725	4725	____________________________________________________________________________ 18
4726	4726	Name of Person Assessed in the Names of Interested Persons 19
4727	4727	Year of the Tax for which served by registered or certified 20
4728	4728	the land was taken or sold. mail with notice of sale under 21
4729	4729	_________ Recorded § 44-9-39. 22
4730	4730	Location of Parcel Book Page 23
4731	4731	____________________________________________________________________________ 24
4732	4732	____________________________________________________________________________ 25
4733	4733	____________________________________________________________________________ 26
4734	4734	____________________________________________________________________________ 27
4735	4735	____________________________________________________________________________ 28
4736	4736	The land hereby granted was assessed for $ _____ and was offered for sale at public auction 29
4737	4737	on _____, 20 ___, in accordance with a notice of sale posted on _____, 20 ___, in (Specify place 30
4738	4738	where notice was posted) _____; and was sold to the above-named grantee (at the original time and 31
4739	4739	place appointed for the sale - at an adjournment of the sale on ______, 20 ___,) that grantee being 32
4740	4740	the highest bidder whose bid was not rejected as inadequate. 33
4741	4741	This deed is given with the covenant that the sale was in all particulars conducted according 34
4742	4742
4743	4743
4744	4744	LC002603 - Page 129 of 137
4745	4745	to law. 1
4746	4746	In Witness, etc. 2
4747	4747	_____________________________________ 3
4748	4748	Treasurer 4
4749	4749	of ___________________________________ 5
4750	4750	Name of City or Town 6
4751	4751	Acknowledgment. See Form 2. 7
4752	4752	Form No. 14 8
4753	4753	§ 44-9-38 9
4754	4754	This deed is not valid unless recorded in the proper registry of deeds within sixty (60) days 10
4755	4755	after the sale. 11
4756	4756	TREASURER'S DEED TO MUNICIPALITY -- LAND 12
4757	4757	OF LOW VALUE 13
4758	4758	STATE OF RHODE ISLAND 14
4759	4759	________________________ 15
4760	4760	Name of City of Town 16
4761	4761	OFFICE OF THE TREASURER 17
4762	4762	I, ___________, Treasurer of the City - Town of __________, pursuant to the provisions 18
4763	4763	of §§ 44-9-36 -- 44-9-38, hereby grant to the city - town the parcel-parcels of land described in the 19
4764	4764	tax collector's deed to which reference is made in the following schedule: 20
4765	4765	____________________________________________________________________________ 21
4766	4766	____________________________________________________________________________ 22
4767	4767	Name of Person Assessed in the Names of Interested Persons 23
4768	4768	Year of the Tax for which served by registered or certified 24
4769	4769	the land was taken or sold. mail with notice of sale under 25
4770	4770	_________ Recorded § 44-9-39. 26
4771	4771	Location of Parcel Book Page 27
4772	4772	____________________________________________________________________________ 28
4773	4773	____________________________________________________________________________ 29
4774	4774	____________________________________________________________________________ 30
4775	4775	____________________________________________________________________________ 31
4776	4776	____________________________________________________________________________ 32
4777	4777	The land hereby granted was assessed for $ _____ and was offered for sale at public auction 33
4778	4778	on ______, 20 ___, in accordance with a notice of sale posted on _____, 20 ___, in (Specify place 34
4779	4779
4780	4780
4781	4781	LC002603 - Page 130 of 137
4782	4782	where notice of sale posted) on ______, 20 ___, in (Specify place where notice was posted). 1
4783	4783	(Strike out Paragraph (A) or (B) as the Circumstances Require) 2
4784	4784	No bid 3
4785	4785	(A) No bid deemed adequate by me was made at the time and place appointed for the sale 4
4786	4786	or at any adjournment thereof, and the city - town therefore became the purchaser at an adjournment 5
4787	4787	of the sale on _______, 20 ___. 6
4788	4788	(B) The purchaser failed to pay the amount bid by him or her at ____ the original time and 7
4789	4789	place appointed for the sale, or ________ an adjournment of the sale on _______, 20 ___, within 8
4790	4790	ten (10) days thereafter, wherefore the sale became void and the city - town became the purchaser. 9
4791	4791	In Witness, etc. 10
4792	4792	_____________________________________ 11
4793	4793	Treasurer 12
4794	4794	of ___________________________________ 13
4795	4795	Name of City or Town 14
4796	4796	Acknowledgment. See Form 2. 15
4797	4797	Form No. 15 16
4798	4798	§ 44-9-40 17
4799	4799	STATE OF RHODE ISLAND 18
4800	4800	Petition to Establish Title Acquired under § 44-9-36 or § 44-9-38. To the Honorable, the 19
4801	4801	Judges of the Superior Court. 20
4802	4802	The undersigned hereby represent that the land hereinafter described was sold on _______ 21
4803	4803	for the nonpayment of taxes by ________ , County of ________ . Pursuant to §§ 44-9-36 and 44-22
4804	4804	9-38, the land was conveyed to ________ by instrument dated ________ and recorded in Book 23
4805	4805	________ , Page ________ , that the undersigned now hold title under an instrument from 24
4806	4806	________ dated ________ , and duly recorded in Book ________ , Page _______ , that the 25
4807	4807	following are the names and addresses of all persons known to the undersigned who have any 26
4808	4808	interest in the land other than the petitioner ______________ to wit: 27
4809	4809	that the assessed value of the land and buildings is $_________ ; and that the land is 28
4810	4810	described as follows: 29
4811	4811	(Description) 30
4812	4812	Wherefore your petitioner prays that all persons having an interest in the above-described 31
4813	4813	premises show cause why they should not bring an action to try any claim or claims which they 32
4814	4814	may have adverse to your petitioner's title. And if such persons do not appear within the time fixed 33
4815	4815	or having appeared disobey the lawful Order of the Court to try their claim or claims, that the Court 34
4816	4816
4817	4817
4818	4818	LC002603 - Page 131 of 137
4819	4819	enter a decree that they be forever barred from having or enforcing any claim or claims adversely 1
4820	4820	to the petitioner, his or her heirs or assigns, in the land described. 2
4821	4821	_____________________________________ 3
4822	4822	_____________________________________ 4
4823	4823	On this ________ day of ________, 20 ___, personally appeared before me the within 5
4824	4824	named ________, known to me to be the signers of the foregoing petition, and made oath that the 6
4825	4825	statements therein contained so far as made of their own knowledge are true and so far as made 7
4826	4826	upon information and belief that they believe them to be true. 8
4827	4827	Before me 9
4828	4828	_____________________________________ 10
4829	4829	Notary Public 11
4830	4830	SECTION 14. Section 21-28-4.01 of the General Laws as amended by P.L. 2021, ch. 100, 12
4831	4831	§ 1 and P.L. 2021, ch. 101, § 1 in Chapter 21-28 entitled "Uniform Controlled Substances Act" is 13
4832	4832	hereby repealed. 14
4833	4833	21-28-4.01. Prohibited acts A — Penalties. [As amended by P.L. 2021, ch. 100, § 1 and 15
4834	4834	P.L. 2021, ch. 101, § 1.] 16
4835	4835	(a)(1) Except as authorized by this chapter, it shall be unlawful for any person to 17
4836	4836	manufacture, deliver, or possess with intent to manufacture or deliver a controlled substance. 18
4837	4837	(2) Any person who is not a drug-addicted person, as defined in § 21-28-1.02, who 19
4838	4838	violates this subsection with respect to a controlled substance classified in schedule I or II, 20
4839	4839	except the substance classified as marijuana, is guilty of a crime and, upon conviction, may 21
4840	4840	be imprisoned to a term up to life or fined not more than five hundred thousand dollars 22
4841	4841	($500,000) nor less than ten thousand dollars ($10,000), or both. 23
4842	4842	(3) Where the deliverance as prohibited in this subsection shall be the proximate cause 24
4843	4843	of death to the person to whom the controlled substance is delivered, it shall not be a defense 25
4844	4844	that the person delivering the substance was, at the time of delivery, a drug-addicted person 26
4845	4845	as defined in § 21-28-1.02. 27
4846	4846	(4) Any person, except as provided for in subsection (a)(2), who violates this 28
4847	4847	subsection with respect to: 29
4848	4848	(i) A controlled substance, classified in schedule I or II, is guilty of a crime and, upon 30
4849	4849	conviction, may be imprisoned for not more than thirty (30) years, or fined not more than 31
4850	4850	one hundred thousand dollars ($100,000) nor less than three thousand dollars ($3,000), or 32
4851	4851	both; 33
4852	4852	(ii) A controlled substance, classified in schedule III or IV, is guilty of a crime and, 34
4853	4853
4854	4854
4855	4855	LC002603 - Page 132 of 137
4856	4856	upon conviction, may be imprisoned for not more than twenty (20) years, or fined not more 1
4857	4857	than forty thousand dollars ($40,000), or both; provided, with respect to a controlled 2
4858	4858	substance classified in schedule III(d), upon conviction may be imprisoned for not more than 3
4859	4859	five (5) years, or fined not more than twenty thousand dollars ($20,000), or both. 4
4860	4860	(iii) A controlled substance, classified in schedule V, is guilty of a crime and, upon 5
4861	4861	conviction, may be imprisoned for not more than one year, or fined not more than ten 6
4862	4862	thousand dollars ($10,000), or both. 7
4863	4863	(b)(1) Except as authorized by this chapter, it is unlawful for any person to create, 8
4864	4864	deliver, or possess with intent to deliver, a counterfeit substance. 9
4865	4865	(2) Any person who violates this subsection with respect to: 10
4866	4866	(i) A counterfeit substance, classified in schedule I or II, is guilty of a crime and, upon 11
4867	4867	conviction, may be imprisoned for not more than thirty (30) years, or fined not more than 12
4868	4868	one hundred thousand dollars ($100,000), or both; 13
4869	4869	(ii) A counterfeit substance, classified in schedule III or IV, is guilty of a crime and, 14
4870	4870	upon conviction, may be imprisoned for not more than twenty (20) years, or fined not more 15
4871	4871	than forty thousand dollars ($40,000), or both; provided, with respect to a controlled 16
4872	4872	substance classified in schedule III(d), upon conviction may be imprisoned for not more than 17
4873	4873	five (5) years, or fined not more than twenty thousand dollars ($20,000), or both. 18
4874	4874	(iii) A counterfeit substance, classified in schedule V, is guilty of a crime and, upon 19
4875	4875	conviction, may be imprisoned for not more than one year, or fined not more than ten 20
4876	4876	thousand dollars ($10,000), or both. 21
4877	4877	(c)(1) It shall be unlawful for any person knowingly or intentionally to possess a 22
4878	4878	controlled substance, unless the substance was obtained directly from, or pursuant to, a valid 23
4879	4879	prescription or order of a practitioner while acting in the course of his or her professional 24
4880	4880	practice, or except as otherwise authorized by this chapter. 25
4881	4881	(2) Any person who violates this subsection with respect to: 26
4882	4882	(i) A controlled substance classified in schedules I, II and III, IV, and V, except 27
4883	4883	buprenorphine and the substance classified as marijuana, is guilty of a crime and, upon 28
4884	4884	conviction, may be imprisoned for not more than three (3) years, or fined not less than five 29
4885	4885	hundred dollars ($500) nor more than five thousand dollars ($5,000), or both; 30
4886	4886	(ii) More than one ounce (1 oz.) of a controlled substance classified in schedule I as 31
4887	4887	marijuana is guilty of a misdemeanor, except for those persons subject to (a)(1), and, upon 32
4888	4888	conviction, may be imprisoned for not more than one year, or fined not less than two hundred 33
4889	4889	dollars ($200) nor more than five hundred dollars ($500), or both. 34
4890	4890
4891	4891
4892	4892	LC002603 - Page 133 of 137
4893	4893	(iii) Notwithstanding any public, special, or general law to the contrary, the possession 1
4894	4894	of one ounce (1 oz.) or less of marijuana by a person who is eighteen (18) years of age or older, 2
4895	4895	and who is not exempted from penalties pursuant to chapter 28.6 of this title, shall constitute 3
4896	4896	a civil offense, rendering the offender liable to a civil penalty in the amount of one hundred 4
4897	4897	fifty dollars ($150) and forfeiture of the marijuana, but not to any other form of criminal or 5
4898	4898	civil punishment or disqualification. Notwithstanding any public, special, or general law to 6
4899	4899	the contrary, this civil penalty of one hundred fifty dollars ($150) and forfeiture of the 7
4900	4900	marijuana shall apply if the offense is the first (1st) or second (2nd) violation within the 8
4901	4901	previous eighteen (18) months. 9
4902	4902	(iv) Notwithstanding any public, special, or general law to the contrary, possession of 10
4903	4903	one ounce (1 oz.) or less of marijuana by a person who is seventeen (17) years of age or older 11
4904	4904	and under the age of eighteen (18) years, and who is not exempted from penalties pursuant 12
4905	4905	to chapter 28.6 of this title, shall constitute a civil offense, rendering the offender liable to a 13
4906	4906	civil penalty in the amount of one hundred fifty dollars ($150) and forfeiture of the 14
4907	4907	marijuana; provided the minor offender completes an approved, drug-awareness program 15
4908	4908	and community service as determined by the court. If the person seventeen (17) years of age 16
4909	4909	or older and under the age of eighteen (18) years fails to complete an approved, drug-17
4910	4910	awareness program and community service within one year of the disposition, the penalty 18
4911	4911	shall be a three hundred dollar ($300) civil fine and forfeiture of the marijuana, except that 19
4912	4912	if no drug-awareness program or community service is available, the penalty shall be a fine 20
4913	4913	of one hundred fifty dollars ($150) and forfeiture of the marijuana. The parents or legal 21
4914	4914	guardian of any offender seventeen (17) years of age or older and under the age of eighteen 22
4915	4915	(18) shall be notified of the offense and the availability of a drug-awareness and community-23
4916	4916	service program. The drug-awareness program must be approved by the court, but shall, at 24
4917	4917	a minimum, provide four (4) hours of instruction or group discussion and ten (10) hours of 25
4918	4918	community service. Notwithstanding any other public, special, or general law to the contrary, 26
4919	4919	this civil penalty shall apply if the offense is the first or second violation within the previous 27
4920	4920	eighteen (18) months. 28
4921	4921	(v) Notwithstanding any public, special, or general law to the contrary, a person not 29
4922	4922	exempted from penalties pursuant to chapter 28.6 of this title found in possession of one ounce 30
4923	4923	(1 oz.) or less of marijuana is guilty of a misdemeanor and, upon conviction, may be 31
4924	4924	imprisoned for not more than thirty (30) days, or fined not less than two hundred dollars 32
4925	4925	($200) nor more than five hundred dollars ($500), or both, if that person has been previously 33
4926	4926	adjudicated on a violation for possession of less than one ounce (1 oz.) of marijuana under 34
4927	4927
4928	4928
4929	4929	LC002603 - Page 134 of 137
4930	4930	(c)(2)(iii) or (c)(2)(iv) two (2) times in the eighteen (18) months prior to the third (3rd) offense. 1
4931	4931	(vi) Any unpaid civil fine issued under (c)(2)(iii) or (c)(2)(iv) shall double to three 2
4932	4932	hundred dollars ($300) if not paid within thirty (30) days of the disposition. The civil fine shall 3
4933	4933	double again to six hundred dollars ($600) if it has not been paid within ninety (90) days. 4
4934	4934	(vii) No person may be arrested for a violation of (c)(2)(iii) or (c)(2)(iv) of this 5
4935	4935	subsection except as provided in this subparagraph. Any person in possession of an 6
4936	4936	identification card, license, or other form of identification issued by the state or any state, 7
4937	4937	city, or town, or any college or university, who fails to produce the same upon request of a 8
4938	4938	police officer who informs the person that he or she has been found in possession of what 9
4939	4939	appears to the officer to be one ounce (1 oz.) or less of marijuana, or any person without any 10
4940	4940	such forms of identification who fails or refuses to truthfully provide his or her name, address, 11
4941	4941	and date of birth to a police officer who has informed such person that the officer intends to 12
4942	4942	provide such individual with a citation for possession of one ounce (1 oz.) or less of marijuana, 13
4943	4943	may be arrested. 14
4944	4944	(viii) No violation of (c)(2)(iii) or (c)(2)(iv) of this subsection shall be considered a 15
4945	4945	violation of parole or probation. 16
4946	4946	(ix) Any records collected by any state agency, tribunal, or the family court that 17
4947	4947	include personally identifiable information about violations of (c)(2)(iii) or (c)(2)(iv) shall not 18
4948	4948	be open to public inspection in accordance with § 8-8.2-21. 19
4949	4949	(3) Jurisdiction. Any and all violations of (c)(2)(iii) and (c)(2)(iv) shall be the exclusive 20
4950	4950	jurisdiction of the Rhode Island traffic tribunal. All money associated with the civil fine issued 21
4951	4951	under (c)(2)(iii) or (c)(2)(iv) shall be payable to the Rhode Island traffic tribunal. Fifty percent 22
4952	4952	(50%) of all fines collected by the Rhode Island traffic tribunal from civil penalties issued 23
4953	4953	pursuant to (c)(2)(iii) or (c)(2)(iv) shall be expended on drug-awareness and treatment 24
4954	4954	programs for youth. 25
4955	4955	(4) Additionally, every person convicted or who pleads nolo contendere under (c)(2)(i) 26
4956	4956	or convicted or who pleads nolo contendere a second or subsequent time under (c)(2)(ii), who 27
4957	4957	is not sentenced to a term of imprisonment to serve for the offense, shall be required to: 28
4958	4958	(i) Perform up to one hundred (100) hours of community service; 29
4959	4959	(ii) Attend and complete a drug-counseling and education program, as prescribed, by 30
4960	4960	the director of the department of behavioral healthcare, developmental disabilities and 31
4961	4961	hospitals and pay the sum of four hundred dollars ($400) to help defray the costs of this 32
4962	4962	program which shall be deposited as general revenues. Failure to attend may result, after 33
4963	4963	hearing by the court, in jail sentence up to one year; 34
4964	4964
4965	4965
4966	4966	LC002603 - Page 135 of 137
4967	4967	(iii) The court shall not suspend any part or all of the imposition of the fee required 1
4968	4968	by this subsection, unless the court finds an inability to pay; 2
4969	4969	(iv) If the offense involves the use of any automobile to transport the substance or the 3
4970	4970	substance is found within an automobile, then a person convicted or who pleads nolo 4
4971	4971	contendere under (c)(2)(i) and (c)(2)(ii) shall be subject to a loss of license for a period of six 5
4972	4972	(6) months for a first offense and one year for each offense after. 6
4973	4973	(5) All fees assessed and collected pursuant to (c)(3)(ii) shall be deposited as general 7
4974	4974	revenues and shall be collected from the person convicted or who pleads nolo contendere 8
4975	4975	before any other fines authorized by this chapter. 9
4976	4976	(d) It shall be unlawful for any person to manufacture, distribute, or possess with 10
4977	4977	intent to manufacture or distribute, an imitation controlled substance. Any person who 11
4978	4978	violates this subsection is guilty of a crime and, upon conviction, shall be subject to the same 12
4979	4979	term of imprisonment and/or fine as provided by this chapter for the manufacture or 13
4980	4980	distribution of the controlled substance that the particular imitation controlled substance 14
4981	4981	forming the basis of the prosecution was designed to resemble and/or represented to be; but 15
4982	4982	in no case shall the imprisonment be for more than five (5) years nor the fine for more than 16
4983	4983	twenty thousand dollars ($20,000). 17
4984	4984	(e) It shall be unlawful for a practitioner to prescribe, order, distribute, supply, or sell 18
4985	4985	an anabolic steroid or human growth hormone for: (1) Enhancing performance in an 19
4986	4986	exercise, sport, or game, or (2) Hormonal manipulation intended to increase muscle mass, 20
4987	4987	strength, or weight without a medical necessity. Any person who violates this subsection is 21
4988	4988	guilty of a misdemeanor and, upon conviction, may be imprisoned for not more than six (6) 22
4989	4989	months or a fine of not more than one thousand dollars ($1,000), or both. 23
4990	4990	(f) It is unlawful for any person to knowingly or intentionally possess, manufacture, 24
4991	4991	distribute, or possess with intent to manufacture or distribute, any extract, compound, salt 25
4992	4992	derivative, or mixture of salvia divinorum or datura stramonium or its extracts unless the 26
4993	4993	person is exempt pursuant to the provisions of § 21-28-3.30. Notwithstanding any laws to the 27
4994	4994	contrary, any person who violates this section is guilty of a misdemeanor and, upon 28
4995	4995	conviction, may be imprisoned for not more than one year, or fined not more than one 29
4996	4996	thousand dollars ($1,000), or both. The provisions of this section shall not apply to licensed 30
4997	4997	physicians, pharmacists, and accredited hospitals and teaching facilities engaged in the 31
4998	4998	research or study of salvia divinorum or datura stramonium and shall not apply to any person 32
4999	4999	participating in clinical trials involving the use of salvia divinorum or datura stramonium. 33
5000	5000	ARTICLE III -- EFFECTIVE DATE 34
5001	5001
5002	5002
5003	5003	LC002603 - Page 136 of 137
5004	5004	SECTION 1. Sections 1 through 27 of Article I of this act shall take effect on December 1
5005	5005	31, 2023. Sections 1 through 14 of Article II of this act shall take effect upon passage. 2
5006	5006	========
5007	5007	LC002603
5008	5008	========
5009	5009
5010	5010
5011	5011	LC002603 - Page 137 of 137
5012	5012	EXPLANATION
5013	5013	BY THE LEGISLATIVE COUNCIL
5014	5014	OF
5015	5015	A N A C T
5016	5016	RELATING TO STATUTES AND STATUTORY CONSTR UCTION
5017	5017	***
5018	5018	This act makes a number of technical amendments to the general laws, prepared at the 1
5019	5019	recommendation of the law revision office. Article I contains the reenactment of titles 7 and 27 of 2
5020	5020	the general laws. Article II includes the statutory construction provisions 3
5021	5021	Sections 1 through 27 of Article I of this act would take effect on December 31, 2023. 4
5022	5022	Sections 1 through 14 of Article II of this act would take effect upon passage. 5
5023	5023	========
5024	5024	LC002603
5025	5025	========