Rhode Island 2025 Regular Session

Rhode Island Senate Bill S0604 Compare Versions

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

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5	5	2025 -- S 0604
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7	7	LC001778
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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. 2025
12	12	____________
13	13
14	14	A N A C T
15	15	RELATING TO INSURANCE -- RHODE ISLAND PROPERTY AND CASUALT Y
16	16	INSURANCE GUARANTY A SSOCIATION
17	17	Introduced By: Senators Sosnowski, Murray, and Britto
18	18	Date Introduced: March 06, 2025
19	19	Referred To: Senate Commerce
20	20	(Dept. of Business Regulation)
21	21
22	22	It is enacted by the General Assembly as follows:
23	23	SECTION 1. Section 27-34-8 of the General Laws in Chapter 27-34 entitled "Rhode Island 1
24	24	Property and Casualty Insurance Guaranty Association" is hereby amended to read as follows: 2
25	25	27-34-8. Powers and duties of the association. 3
26	26	(a) The association shall: 4
27	27	(1)(i) Be obligated to pay covered claims existing prior to the order of liquidation; arising 5
28	28	within sixty (60) days after the order of liquidation or before the policy expiration date if less than 6
29	29	sixty (60) days after the order of liquidation or before the insured replaces the policy or causes its 7
30	30	cancellation if the insured does so within sixty (60) days of the order of liquidation. The obligations 8
31	31	shall be satisfied by paying to the claimant an amount as follows: 9
32	32	(A) The full amount of a covered claim for benefits under a workers’ compensation 10
33	33	insurance coverage; 11
34	34	(B) An amount not exceeding ten thousand dollars ($10,000), per policy for a covered 12
35	35	claim for the return of unearned premium; 13
36	36	(C) An amount not exceeding one million dollars ($1,000,000) for all first-party property 14
37	37	loss claims arising from a single occurrence under a policy covering commercial or residential 15
38	38	property for all other covered claims for insolvencies occurring after January 1, 2026; an amount 16
39	39	not exceeding five hundred thousand dollars ($500,000), per claimant for all other covered claims 17
40	40	for insolvencies occurring on or after January 1, 2008,; and an amount not exceeding three hundred 18
41	41
42	42
43	43	LC001778 - Page 2 of 15
44	44	thousand dollars ($300,000) per claimant for all other covered claims for insolvencies occurring 1
45	45	prior to January 1, 2008. 2
46	46	(ii) In no event shall the association be obligated to pay a claimant an amount in excess of 3
47	47	the obligation of the insolvent insurer under the policy or coverage from which the claim arises. 4
48	48	Notwithstanding any other provision of this chapter, a covered claim shall not include a claim filed 5
49	49	with the guaranty association after the final date set by the court for the filing of claims against the 6
50	50	liquidator or receiver of an insolvent insurer. For the purpose of filing a claim under this subsection, 7
51	51	notice of claims to the liquidator of the insolvent insurer shall be deemed notice to the association 8
52	52	or its agent and a list of claims shall be periodically submitted to the association or association 9
53	53	similar to the association in another state by the liquidator. 10
54	54	(iii) Any obligation of the association to defend an insured shall cease upon the 11
55	55	association’s payment or tender of an amount equal to the lesser of the association’s covered claim 12
56	56	obligation limit or the applicable policy limit; 13
57	57	(2) Be deemed the insurer to the extent of its obligation on the covered claims and to that 14
58	58	extent, subject to the limitation provided in this chapter, shall have all rights, duties, and obligations 15
59	59	of the insolvent insurer as if the insurer had not become insolvent, including, but not limited to, the 16
60	60	right to pursue and retain salvage and subrogation recoverable on covered claim obligations to the 17
61	61	extent paid by the association. The association shall not be deemed the insolvent insurer for the 18
62	62	purpose of conferring jurisdiction; 19
63	63	(3) Allocate claims paid and expenses incurred among the three (3) accounts separately, 20
64	64	and assess member insurers separately for each account amounts necessary to pay the obligations 21
65	65	of the association under subdivision (a)(1) subsequent to an insolvency, the expenses of handling 22
66	66	covered claims subsequent to an insolvency, and other expenses authorized by this chapter. The 23
67	67	assessments of each member insurer shall be in the proportion that the net direct written premiums 24
68	68	of the member insurer for the calendar year preceding the assessment on the kinds of insurance in 25
69	69	the account bears to the net direct written premiums of all member insurers for the calendar year 26
70	70	preceding the assessment on the kinds of insurance in the account. Each member insurer shall be 27
71	71	notified of the assessment not later than thirty (30) days before it is due. 28
72	72	A member insurer may not be assessed in any one year on any account an amount greater 29
73	73	than two percent (2%) of that member insurer’s net direct written premiums for the calendar year 30
74	74	preceding the assessment on the kinds of insurance in the account. If the maximum assessment, 31
75	75	together with the other assets of the association in any account, does not provide in any one year in 32
76	76	any account an amount sufficient to make all necessary payments from that account, each member 33
77	77	insurer shall be assessed the additional amount that must be obtained to make all necessary 34
78	78
79	79
80	80	LC001778 - Page 3 of 15
81	81	payments of the underfunded account from the other two accounts, subject to the same limitation 1
82	82	of two percent (2%) of that member insurer’s net direct written premiums for the calendar year 2
83	83	preceding the assessment on the kinds of insurance in the account. The additional assessments shall 3
84	84	be considered loans by and between the separate accounts. Amounts borrowed under this 4
85	85	subsection shall be paid back to the separate accounts from which they were borrowed, out of 5
86	86	assets, including, but not limited to, existing and future assessments in the account receiving the 6
87	87	loan. An interest charge shall be levied on all amounts borrowed under this subsection based on the 7
88	88	average prime rate of interest for each year the money remains unpaid. If the amounts borrowed 8
89	89	remain unpaid on the seventh yearly anniversary as a result of the inability of the borrowing account 9
90	90	to make repayment, then the amount borrowed and interest which is not repaid, starting with the 10
91	91	principal and interest of the first year, shall be considered uncollectible. The funds available shall 11
92	92	be prorated and the unpaid portion shall be paid as soon after this as funds become available. The 12
93	93	association may exempt or defer, in whole or in part, the assessment of any member insurer if the 13
94	94	assessment would cause the member insurer’s financial statement to reflect amounts of capital or 14
95	95	surplus less than the minimum amounts required for a certificate of authority by any jurisdiction in 15
96	96	which the member insurer is authorized to transact insurance. However, during the period of 16
97	97	deferment, no dividends shall be paid to shareholders or policyholders. Deferred assessments shall 17
98	98	be paid when the payment will not reduce capital or surplus below required minimums. Payments 18
99	99	shall be refunded to those companies receiving larger assessments by virtue of the deferment, or, 19
100	100	at the election of any company, credited against future assessments; 20
101	101	(4) Investigate claims brought against the association and adjust, compromise, settle, and 21
102	102	pay covered claims to the extent of the association’s obligation and deny all other claims. The 22
103	103	association shall pay claims in any order that it may deem reasonable, including the payment of 23
104	104	claims as they are received from the claimants or in groups or categories of claims. The association 24
105	105	shall have the right to appoint and to direct legal counsel retained under liability insurance policies 25
106	106	for the defense of covered claims; 26
107	107	(5) Notify claimants in this state as deemed necessary by the commissioner and upon the 27
108	108	commissioner’s request, to the extent records are available to the association; 28
109	109	(6)(i) Have the right to review and contest as set forth in this subsection settlements, 29
110	110	releases, compromises, waivers, and judgments to which the insolvent insurer or its insureds were 30
111	111	parties prior to the entry of the order of liquidation. In an action to enforce settlements, releases, 31
112	112	and judgments to which the insolvent insurer or its insureds were parties prior to the entry of the 32
113	113	order of liquidation, the association shall have the right to assert the following defenses, in addition 33
114	114	to the defenses available to the insurer: 34
115	115
116	116
117	117	LC001778 - Page 4 of 15
118	118	(A) The association is not bound by a settlement, release, compromise, or waiver executed 1
119	119	by an insured or the insurer, or any judgment entered against an insured or the insurer by consent 2
120	120	or through a failure to exhaust all appeals, if the settlement, release, compromise, waiver, or 3
121	121	judgment was: 4
122	122	(I) Executed or entered into within one hundred twenty (120) days prior to the entry of an 5
123	123	order of liquidation, and the insured or the insurer did not use reasonable care in entering into the 6
124	124	settlement, release, compromise, waiver, or judgment, or did not pursue all reasonable appeals of 7
125	125	an adverse judgment; or 8
126	126	(II) Executed by or taken against an insured or the insurer based on default, fraud, collusion, 9
127	127	or the insurer’s failure to defend. 10
128	128	(B) If a court of competent jurisdiction finds that the association is not bound by a 11
129	129	settlement, release, compromise, waiver, or judgment for the reasons described in subparagraph 12
130	130	(i)(A), the settlement, release, compromise, waiver, or judgment shall be set aside, and the 13
131	131	association shall be permitted to defend any covered claim on the merits. The settlement, release, 14
132	132	compromise, waiver, or judgment may not be considered as evidence of liability or damages in 15
133	133	connection with any claim brought against the association or any other party under this chapter. 16
134	134	(C) The association shall have the right to assert any statutory defenses or rights of offset 17
135	135	against any settlement, release, compromise, or waiver executed by an insured or the insurer, or 18
136	136	any judgment taken against the insured or the insurer. 19
137	137	(ii) As to any covered claims arising from a judgment under any decision, verdict, or 20
138	138	finding based on the default of the insolvent insurer or its failure to defend, the association, either 21
139	139	on its own behalf or on behalf of an insured, may apply to have the judgment, order, decision, 22
140	140	verdict, or finding set aside by the same court or administrator that entered the judgment, order, 23
141	141	decision, verdict, or finding and shall be permitted to defend the claim on the merits; 24
142	142	(7) Handle claims through its employees or through one or more insurers or other persons 25
143	143	designated as servicing facilities. Designation of a servicing facility is subject to the approval of 26
144	144	the commissioner, but the designation may be declined by a member insurer; 27
145	145	(8) Reimburse each servicing facility for obligations of the association paid by the facility 28
146	146	and for expenses incurred by the facility while handling claims on behalf of the association and 29
147	147	shall pay the other expenses of the association authorized by this chapter; 30
148	148	(9)(i) The association shall obtain a line of credit for the benefit of each account, in an 31
149	149	amount not to exceed the applicable maximum to ensure the immediate availability of funds for 32
150	150	purposes of future claims and expenses attributable to an insurer insolvency in that account. The 33
151	151	line of credit shall be obtained from qualified financial institutions. The line of credit shall provide 34
152	152
153	153
154	154	LC001778 - Page 5 of 15
155	155	for a thirty-day (30) notice of termination or nonrenewal to the commissioner and the association 1
156	156	and shall provide funding to the association within three (3) business days of receipt of written 2
157	157	notice from the commissioner of an insolvent insurer in that account. Each member insurer upon 3
158	158	receipt of notice from the association shall make immediate payment for its proportionate share of 4
159	159	the amount borrowed based on the premium for the preceding calendar year. The maximum line of 5
160	160	credit or preinsolvency assessment for each account shall be subject to prior review and approval 6
161	161	by the commissioner at the time of origination. 7
162	162	(ii) If the association cannot obtain a line of credit, the association may obtain an 8
163	163	irrevocable line of credit agreement from each member insurer in an amount not to exceed the 9
164	164	member insurer’s maximum assessment pursuant to subdivision (a)(3) to ensure the immediate 10
165	165	availability of funds for the purposes of future claims and expenses attributable to an insurer 11
166	166	insolvency. 12
167	167	Any amount drawn under any line of credit shall be considered a payment toward the 13
168	168	member insurer’s assessment provided for in subdivision (a)(3). 14
169	169	The member insurer shall provide funding to the association under the line of credit within 15
170	170	three (3) business days of receipt of a written request from the association for a draw-down under 16
171	171	the line of credit. 17
172	172	The line of credit agreement shall be subject to prior review and approval by the 18
173	173	commissioner at the time of origination and any subsequent renewal. It shall include any 19
174	174	commercially reasonable provisions the association or the commissioner may deem advisable, 20
175	175	including a provision that the line of credit is irrevocable or for a stated period of time and provides 21
176	176	for thirty-day (30) notice to the association and the commissioner that the line is being terminated 22
177	177	or not renewed. 23
178	178	(iii) If a line of credit is not given as provided for in this section, the member insurer shall 24
179	179	be responsible for the payment of an assessment of up to the member’s proportionate share of the 25
180	180	applicable maximum as set forth in this subsection which shall be paid into a pre-insolvency 26
181	181	assessment fund in each account; 27
182	182	(10) Submit, not later than ninety (90) days after the end of the association’s fiscal year, a 28
183	183	financial report for the preceding fiscal year in a form approved by the commissioner. 29
184	184	(b) The association may: 30
185	185	(1) Employ or retain persons as are necessary to handle claims and perform other duties of 31
186	186	the association; 32
187	187	(2) Borrow funds necessary to effect the purposes of this chapter in accordance with the 33
188	188	plan of operation; 34
189	189
190	190
191	191	LC001778 - Page 6 of 15
192	192	(3) Sue or be sued; 1
193	193	(4) Negotiate and become a party to any contracts necessary to carry out the purpose of 2
194	194	this chapter; 3
195	195	(5) Perform any other acts necessary or proper to effectuate the purpose of this chapter; 4
196	196	and 5
197	197	(6) Refund to the member insurers in proportion to the contribution of each member insurer 6
198	198	to that account that amount by which the assets of the account exceed the liabilities, if, at the end 7
199	199	of any calendar year, the board of directors finds that the assets of the association in any account 8
200	200	exceed the liabilities of that account as estimated by the board of directors for the coming year. 9
201	201	(c) Suits involving the association: 10
202	202	(1) Except for actions by the receiver, all actions relating to or arising out of this chapter 11
203	203	against the association shall be brought in the courts in this state. The courts shall have exclusive 12
204	204	jurisdiction over all actions relating to or arising out of this chapter against the association. 13
205	205	(2) The exclusive venue in any action by or against the association is in the Providence 14
206	206	county superior court. The association may, at its option, waive this venue as to specific actions. 15
207	207	SECTION 2. Section 27-76-2 of the General Laws in Chapter 27-76 entitled "Weather-16
208	208	Related Losses" is hereby amended to read as follows: 17
209	209	27-76-2. Hurricane deductibles, triggers, and policyholder notice. 18
210	210	(a) The provisions of this section shall be applicable to policies issuing or renewing on or 19
211	211	after July 1, 2008. 20
212	212	(b) In all instances where an insurance company licensed to do business in this state offers 21
213	213	or includes any deductible and/or mitigation measure related to the deductible for any type of 22
214	214	personal lines residential property insurance on dwelling houses, the insurance company shall 23
215	215	provide prominent and clear notice to insureds that shall be included in the policy issuance or and 24
216	216	renewal package and shall fully disclose all details pertaining to any such deductible and/or 25
217	217	mitigation measure. 26
218	218	(c) The insurer may apply a deductible specific to windstorm coverage where: 27
219	219	(1) The deductible is specifically approved by the director and shall not exceed five percent 28
220	220	(5%) of the insured value. 29
221	221	(2) The deductible shall be applicable to losses due to a hurricane during the period 30
222	222	commencing with the issuance of a hurricane-warning bulletin for any part of the state by the 31
223	223	National Hurricane Center and concluding twenty-four (24) hours after the termination of the last 32
224	224	hurricane warning bulletin for any part of the state. 33
225	225	(3) The deductible, whether it is a flat dollar deductible or a percentage deductible, shall 34
226	226
227	227
228	228	LC001778 - Page 7 of 15
229	229	be presented by at least two (2) examples that illustrate the application of the deductible to the 1
230	230	insured. Nothing herein shall prohibit the insurer from providing any additional information to the 2
231	231	insured to assist in the insured’s understanding of the deductible to be applied to the insured’s 3
232	232	policy. 4
233	233	(4) The deductible set forth above shall not be applied to any insured, if the insured has 5
234	234	installed approved mitigation measures to protect against windstorm damage and the insurer has 6
235	235	either inspected the property or the insured has submitted satisfactory proof of installation of the 7
236	236	approved mitigation measures. The insurance commissioner, in consultation with the state building 8
237	237	code commissioner, shall adopt and may amend or revise a list of mitigation measures, based so 9
238	238	far as reasonably feasible on national standards for such measures and practices in other comparable 10
239	239	states. The list of mitigation measures adopted by the insurance commissioner shall be considered 11
240	240	approved mitigation measures for purposes of this subsection (c)(4). 12
241	241	(5) For the application of the hurricane deductible on Block Island, losses are due to a 13
242	242	hurricane when a hurricane results in hurricane force sustained winds as reported by the National 14
243	243	Weather Service for Block Island. For the application of the hurricane deductible in the remainder 15
244	244	of the state, losses are due to a hurricane when a hurricane results in hurricane force sustained winds 16
245	245	as reported by the National Weather Service for any other location in the state. All terms are as 17
246	246	defined by the National Weather Service. 18
247	247	(d) Premium credits shall be applied to policies with deductibles as set forth in subsection 19
248	248	(c) of this section. 20
249	249	(e)(1) An insurer may require mitigation measures to protect against windstorm damage 21
250	250	only after specific approval of the substance of such mitigation measures by the director; 22
251	251	(2) Mitigation measures to be taken by an insured are clearly explained, including a 23
252	252	complete illustration of the dollar impact upon the premiums to be charged to insureds if the 24
253	253	requested mitigation activities are undertaken; 25
254	254	(3) No mandatory deductible for windstorm damage shall be included in the policy; 26
255	255	(4) An insurer shall write the requested coverage at the premium rate that includes the 27
256	256	premium credit to be realized with the completion of the mitigation efforts; 28
257	257	(5) The insurer shall affirmatively state the length of time during which discount given for 29
258	258	the mitigation efforts will apply; and 30
259	259	(6) No insurer shall subsequently nonrenew an insured who has taken the mitigation steps 31
260	260	requested by the insurer for reasons of the insurer’s exposure to catastrophe loss, unless for 32
261	261	nonpayment of premium, fraud, breach by the insured of a provision of the policy, reversal or a 33
262	262	lack of maintenance of the mitigation steps, or insurer solvency concerns or adverse loss history. 34
263	263
264	264
265	265	LC001778 - Page 8 of 15
266	266	All insurers writing homeowners or dwelling policies in this state shall, for any residential 1
267	267	property having received an Insurance Institute for Business and Home Safety (IBHS) Certificate 2
268	268	for the most recent version on any application Fortified or Fortified Multifamily construction 3
269	269	standard provide a premium discount or rate reduction on the coverage if: 4
270	270	(1) The discount or reduction is actuarially justified; and 5
271	271	(2) There is sufficient and credible evidence of cost savings that can be attributed to the 6
272	272	construction standards. 7
273	273	All premium discounts or rate reductions under this section are subject to rate and form 8
274	274	filing and approval requirements otherwise applicable to homeowners and dwelling policies. 9
275	275	(f)(e) Penalties for failure to comply with the provisions of this section shall be 10
276	276	administered by the director in accordance with the provisions of § 42-14-16. 11
277	277	(g)(f) The department of business regulation shall have authority to adopt rules, including 12
278	278	emergency rules, as may be necessary or desirable to effectuate the purposes of this section. 13
279	279	SECTION 3. Chapter 27-76 of the General Laws entitled "Weather-Related Losses" is 14
280	280	hereby amended by adding thereto the following section: 15
281	281	27-76-10. Strengthen rhody homes. 16
282	282	(a) There is hereby established within the department of business regulation, division of 17
283	283	insurance the “strengthen rhody homes” program. 18
284	284	(b) This section does not create an entitlement for property owners or obligate the state in 19
285	285	any way to fund the inspection, construction, or retrofitting of residential property in this state. 20
286	286	Implementation of the program is subject to the receipt of federal grants or funds or from other 21
287	287	sources of grants or funds. The department shall use its best efforts to obtain grants or funds from 22
288	288	the federal government or other funding sources to supplement the financial resources of the 23
289	289	strengthen rhody homes program that may be provided by the state. 24
290	290	(c) The strengthen rhody homes program may apply for financial grants to construct or 25
291	291	retrofit insurable property to resist loss due to a hurricane or other catastrophic events. 26
292	292	(d) The strengthen rhody homes program may also make grants or funding available to 27
293	293	nonprofit entities for projects to construct or retrofit insurable properties to resist loss due to 28
294	294	hurricane or other catastrophic windstorm if such grants or funding to nonprofit entities are 29
295	295	allowable under grant or funding rules, requirements, guidelines, or criteria. However, a nonprofit 30
296	296	entity shall agree to administer the grants or funds as the strengthen rhody homes program would 31
297	297	be required to administer grants or funds, and the entity shall provide documentation to the 32
298	298	department in a timely manner as requested by the department. 33
299	299	(e) All mitigation shall be based upon the securing of all required local permits and 34
300	300
301	301
302	302	LC001778 - Page 9 of 15
303	303	applicable inspections in keeping with local building codes and the Insurance Institute for Business 1
304	304	and Home Safety (IBHS) Fortified Homes Program. Mitigation projects are subject to random 2
305	305	reinspection of all projects. 3
306	306	(f) The insurance division may promulgate rules and eligibility requirements necessary for 4
307	307	the proper administration of this section and pursuant to any instructions or requirements on grants 5
308	308	or funds received by the department for the strengthen rhody homes program. 6
309	309	(g) Strengthen rhody homes program. 7
310	310	(1) The strengthen rhody homes program is hereby created to make grants available to 8
311	311	residential Rhode Island homeowners to undertake resilience construction to make the residential 9
312	312	home more resilient to hurricane or other catastrophic risk. 10
313	313	(2) To be eligible for a grant, residential property owners applying for a grant must be able 11
314	314	to meet the eligibility requirements as set forth by the insurance division for each grant type. These 12
315	315	requirements shall include, but not be limited to, the following: 13
316	316	(i) The residential property owner shall claim their primary residence in a county where 14
317	317	grants are being approved; 15
318	318	(ii) The home to be mitigated shall be an owner-occupied, single family, primary residence, 16
319	319	and cannot be a condominium or mobile home; 17
320	320	(iii) The home shall be in good repair unless damaged by a hurricane or other catastrophic 18
321	321	windstorm event. Strengthen rhody homes program grant funds cannot be used for maintenance or 19
322	322	repairs, but may be used in conjunction with repairs or reconstruction necessitated by damages 20
323	323	from a catastrophic event; 21
324	324	(iv) A certified IBHS evaluator shall prequalify the insurable property as mitigable and 22
325	325	identify all improvements required to achieve IBHS FORTIFIED Roof™ (Roof), FORTIFIED 23
326	326	Silver™ (Silver), FORTIFIED Gold™ (Gold), or successor designation, or similar standard 24
327	327	approved by the Insurance Division. The residential property owner shall select the evaluator from 25
328	328	a list provided by the strengthen rhody homes program and shall pay the evaluator's fee; 26
329	329	(v) The residential property owner shall obtain bids from at least three (3) IBHS certified 27
330	330	contractors approved by the strengthen rhody homes program; 28
331	331	(vi) The residential property owner shall construct or retrofit the home to the Insurance 29
332	332	IBHS Roof or Silver, Gold, or successor designation or similar standard approved by the 30
333	333	commissioner; 31
334	334	(vii) The residential property owner shall provide proof of an in-force policy providing 32
335	335	wind insurance on the home; 33
336	336	(viii) If the insurable property is in a special flood hazard area, the residential property 34
337	337
338	338
339	339	LC001778 - Page 10 of 15
340	340	owner shall provide proof of an in-force flood insurance policy. The flood policy may be from the 1
341	341	National Flood Insurance Program (NFIP) or a private carrier; and 2
342	342	(ix) Grant applications shall be filed in the manner directed by the insurance division in the 3
343	343	form and manner prescribed by the commissioner, along with any applicable transaction fees. 4
344	344	(3) Documents, materials, and other information submitted to the department by property 5
345	345	owners or insurance companies in support of a grant application shall be confidential by law and 6
346	346	privileged, shall not be subject to open records requests, shall not be subject to subpoena, and shall 7
347	347	not be subject to discovery or admissible in evidence in any private civil action. 8
348	348	(4) Grants to residential property owners shall be used to construct or retrofit an insurable 9
349	349	property to resist loss due to a hurricane or other catastrophic event. 10
350	350	(5) Retrofit projects within three (3) months of the date the residential property owner 11
351	351	receives notice of the grant approval. New builds shall be completed within the timeframe approved 12
352	352	by the commissioner. Failure to complete the project timely may result in forfeiture of the grant. 13
353	353	(6) Grant funds shall only be paid once a certificate has been issued for the fortified 14
354	354	standard approved by the department. Grant funds shall be paid by the department or another 15
355	355	designated agency, on behalf of the residential property owner, directly to the contractor who 16
356	356	performed the mitigation work. 17
357	357	(7) Applications will be accepted on a first-come, first-served basis within each income tier 18
358	358	established by the commissioner, with priority given to lower-income applicants, applicants who 19
359	359	live in locations that, based on historical data, have a higher susceptibility to catastrophic weather 20
360	360	events, and applicants meeting any other criteria the department determines is appropriate to meet 21
361	361	the purpose of the program. 22
362	362	(8) Any entity providing funds to the strengthen rhody homes program shall be permitted 23
363	363	to establish additional rules and guidelines under which those funds may be used, as long as such 24
364	364	rules and guidelines do not violate any state or federal law. 25
365	365	(9) The department may conduct random inspections of funds, records, and/or properties 26
366	366	to detect any fraud. 27
367	367	(10) Under the strengthen rhody homes program, a residential property owner shall hire an 28
368	368	IBHS certified contractor who is capable of performing work that satisfies the standards prescribed 29
369	369	by this act and the rules adopted thereto: 30
370	370	(i) The department shall not endorse or otherwise provide preferential treatment to any 31
371	371	contractor; 32
372	372	(ii) A residential property owner is legally responsible for any amount owed to a contractor 33
373	373	that exceeds awarded grant monies; 34
374	374
375	375
376	376	LC001778 - Page 11 of 15
377	377	(iii) To be eligible to work on a project funded by the strengthen rhody homes program as 1
378	378	a contractor, a contractor shall meet all program requirements including, but not limited to, those 2
379	379	listed in this subsection, and maintain a current copy of all applicable certificates, licenses, and 3
380	380	proof of insurance coverages with the program office; 4
381	381	(iv) The contractor shall hold a valid and active contractor's registration in Rhode Island 5
382	382	and be free from all disciplinary action by the contractor registration licensing board; 6
383	383	(v) The contractor shall hold an active IBHS FORTIFIED Roof™ contractor certification 7
384	384	or FORTIFIED professional certification. The contractor is responsible for paying all fees 8
385	385	associated with certification and training; 9
386	386	(vi) The contractor shall maintain accurate contact information with the strengthen rhody 10
387	387	homes program; 11
388	388	(vii) The contractor shall agree to follow the strengthen rhody homes program's procedures 12
389	389	and rules as prescribed by the department; 13
390	390	(viii) The contractor shall not have a financial interest in any project funded by the 14
391	391	strengthen rhody homes program for which they perform work other than receiving payment on 15
392	392	behalf of the homeowner from the strengthen rhody homes program and shall report to the 16
393	393	strengthen rhody homes program any potential conflicts of interest before work commences; and 17
394	394	(ix) The contractor shall not be the evaluator for any project funded by the strengthen rhody 18
395	395	homes program. 19
396	396	(11) Evaluators: 20
397	397	(i) To be eligible to work on a project funded by the strengthen rhody homes program as 21
398	398	an evaluator, the evaluator shall meet all program requirements, including, but not limited to, those 22
399	399	listed below and maintain a current copy of all applicable certificates and licenses with the 23
400	400	strengthen rhody homes program office; 24
401	401	(ii) The evaluator must be in good standing with IBHS and maintain an active IBHS 25
402	402	certification as a FORTIFIED roof evaluator. The evaluator is responsible for paying all fees 26
403	403	associated with certification and training; 27
404	404	(iii) The evaluator shall agree to follow the strengthen rhody homes program's procedures 28
405	405	and rules as prescribed by the department; 29
406	406	(iv) The evaluator shall maintain accurate contact information with the strengthen rhody 30
407	407	homes program; 31
408	408	(v) The evaluator shall not have any financial interest in any project which they inspect for 32
409	409	designation purposes for the strengthen rhody homes program; 33
410	410	(vi) The evaluator shall not be a contractor or supplier of any materials and/or products or 34
411	411
412	412
413	413	LC001778 - Page 12 of 15
414	414	systems installed in any home they inspect for designation purposes for the strengthen rhody homes 1
415	415	program; 2
416	416	(vii) The evaluator shall not be the sales agent for any home being designated for the 3
417	417	strengthen rhody homes program; and 4
418	418	(viii) The evaluator shall inform the strengthen rhody homes program of any potential 5
419	419	conflicts of interest. 6
420	420	(12) Funding: 7
421	421	(i) There is hereby created a revolving fund in the insurance department, to be designated 8
422	422	the "strengthen rhody homes revolving fund". The fund shall be a continuing fund, not subject to 9
423	423	fiscal year limitations, and shall consist of any monies deposited to the fund from the receipt of 10
424	424	federal grants or funds or from other sources of grants or funds. All monies accruing to the credit 11
425	425	of the fund are hereby appropriated and may be budgeted and expended by the department for the 12
426	426	purpose of assisting the strengthen rhody homes program in performing all acts that relate to the 13
427	427	function and purpose of the strengthen rhody homes program. The strengthen rhody homes 14
428	428	revolving fund account shall not be subject to any cost recovery or other assessment from the state. 15
429	429	(ii) Monies collected pursuant to this act shall be deposited in the strengthen rhody homes 16
430	430	revolving fund. Monies shall not lapse, unless otherwise specified under federal funding or federal 17
431	431	grant, or a grant or funds from another source, or be transferred to any other state funds and shall 18
432	432	not be redistributed. 19
433	433	SECTION 4. Section 27-5-3.8 of the General Laws in Chapter 27-5 entitled "Fire Insurance 20
434	434	Policies and Reserves" is hereby repealed. 21
435	435	27-5-3.8. Rhode Island commission on hurricane loss projection methodology. 22
436	436	(a) Legislative findings and intent. 23
437	437	(1) Reliable projections of hurricane losses are necessary in order to assure that rates for 24
438	438	residential property insurance meet the statutory requirement that rates be neither excessive nor 25
439	439	inadequate. 26
440	440	(2) The general assembly recognizes the need for expert evaluation of computer models 27
441	441	and other recently developed or improved actuarial methodologies for projecting hurricane losses, 28
442	442	in order to resolve conflicts among actuarial professionals, and in order to provide both immediate 29
443	443	and continuing improvement in the sophistication of actuarial methods used to set rates charged to 30
444	444	consumers. 31
445	445	(3) It is the intent of the general assembly to create the Rhode Island commission on 32
446	446	hurricane loss projection methodology as a panel of experts to provide the most actuarially 33
447	447	sophisticated guidelines and standards for projection of hurricane losses possible, given the current 34
448	448
449	449
450	450	LC001778 - Page 13 of 15
451	451	state of actuarial science. 1
452	452	(b) Commission created. 2
453	453	(1) There is created the Rhode Island commission on hurricane loss projection 3
454	454	methodology. For the purposes of this section, the term “commission” means the Rhode Island 4
455	455	commission on hurricane loss projection methodology. The commission shall be administratively 5
456	456	housed within the department of administration, but it shall independently exercise the powers and 6
457	457	duties specified in this section. 7
458	458	(2) The commission shall consist of the following eight (8) members: 8
459	459	(i) The director of business regulation, acting as the administrator of insurance, or designee; 9
460	460	(ii) The director of the Rhode Island emergency management agency; 10
461	461	(iii) A member of the board of directors of the Rhode Island Joint Reinsurance Association 11
462	462	appointed by the governor; 12
463	463	(iv) Five (5) members directly appointed by the governor, as follows: 13
464	464	(A) An actuary who is employed full-time by a property and casualty insurer that was 14
465	465	responsible for at least one percent of the aggregate statewide direct written premium for 15
466	466	homeowner’s insurance in the calendar year preceding the member’s appointment to the 16
467	467	commission; 17
468	468	(B) An expert in insurance finance who has a background in actuarial science; 18
469	469	(C) An expert in statistics who has a background in insurance; 19
470	470	(D) An expert in computer system design. 20
471	471	(E) An expert in meteorology who specializes in hurricanes. 21
472	472	(3) Members designated under subparagraphs (b)(2)(i)-(iii) shall serve on the commission 22
473	473	as long as they maintain the respective offices designated in subparagraphs (b)(2)(i)-(iii). Members 23
474	474	under subparagraph (b)(2)(iv)(A)-(E) shall serve for a term of three (3) years, and may be 24
475	475	reappointed to the commission. All members may be removed by the governor prior to the 25
476	476	expiration of their term for cause. Vacancies on the commission shall be filled in the same manner 26
477	477	as the original appointment. 27
478	478	(4) The governor shall annually appoint one of the members of the commission to serve as 28
479	479	chair. 29
480	480	(5) Members of the commission shall serve without compensation but shall be reimbursed 30
481	481	for per diem and travel expenses. 31
482	482	(6) There shall be no liability on the part of, and no cause of action of any nature shall arise 32
483	483	against, any member of the commission for any action taken in the performance of their duties 33
484	484	under this section. In addition, the commission may, in writing, waive any potential cause of action 34
485	485
486	486
487	487	LC001778 - Page 14 of 15
488	488	for negligence of a consultant, contractor, or contract employee engaged to assist the commission. 1
489	489	(c) Adoption and effect of standards and guidelines. 2
490	490	(1) The commission shall consider any actuarial methods, principles, standards, models, or 3
491	491	output ranges that have the potential for improving the accuracy of or reliability of the hurricane 4
492	492	loss projections used in residential property insurance rate filings. The commission shall, from time 5
493	493	to time, adopt findings as to the accuracy or reliability of particular methods, principles, standards, 6
494	494	models, or output ranges. 7
495	495	(2) The commission shall adopt revisions to previously adopted actuarial methods, 8
496	496	principles, standards, models, or output ranges at least annually. 9
497	497	(3)(i) A trade secret that is used in designing and constructing a hurricane loss model and 10
498	498	that is provided pursuant to this section, by a private company, to the commission, is confidential 11
499	499	and shall not be deemed a public record pursuant to the provisions of chapter 2 of title 38. 12
500	500	(ii) That portion of a meeting of the commission or of a rate proceeding on an insurer’s rate 13
501	501	filing at which a trade secret made confidential and exempt by this paragraph is discussed shall be 14
502	502	deemed confidential and not open to disclosure pursuant to the open meetings act, but may be 15
503	503	discussed at a closed meeting as provided for in chapter 46 of title 42. 16
504	504	(d) The Rhode Island commission is hereby authorized to form a multi-state commission 17
505	505	with the states of Massachusetts, Connecticut, and any other interested state in furtherance of the 18
506	506	goals of this act. 19
507	507	SECTION 5. This act shall take effect upon passage. 20
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511	511
512	512
513	513	LC001778 - Page 15 of 15
514	514	EXPLANATION
515	515	BY THE LEGISLATIVE COUNCIL
516	516	OF
517	517	A N A C T
518	518	RELATING TO INSURANCE -- RHODE ISLAND PROPERTY AND CASUALTY
519	519	INSURANCE GUARANTY A SSOCIATION
520	520	***
521	521	This act would provide a framework through which the department of business regulation 1
522	522	can seek grants to fund a home hardening program, and would increase the state guaranty fund 2
523	523	limits on personal and commercial property to one million dollars for first-party covered claims. 3
524	524	This act would take effect upon passage. 4
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526	526	LC001778
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528	528