Property & Casualty and Workers' Compensation 2004 Legislative Changes

Department of Business Regulation

1511 Pontiac Avenue

Cranston, RI 02920

Insurance Bulletin Number 2004-11

Property & Casualty and Workers’ Compensation

2004 Legislative Changes

The following legislative amendments were enacted during the 2004 session of the

Rhode Island General Assembly. This information is provided for informational

purposes only and may not be an all-inclusive list of amendments that impact the

Property & Casualty industry. Insurers should refer to the referenced bills to determine

the impact these bills have on the insurer in order to be in compliance with these recent

amendments.

S2106/H7423: Rental Vehicle Coverage

Public Laws 04-059/04-054

Effective: June 11, 2004

• Amendments to R.I. Gen. Laws § 27-8-1(9). These amendments repeal the

rental vehicle coverage section.

• Amendments to R.I. Gen. Laws § 27-7-6. These amendments extend property

damage liability coverage of an insured’s automobile insurance policy to a

rented motor vehicle, under ten thousand pounds (10,000 lbs.), without regard to

negligence for a period not to exceed sixty (60) consecutive days.

S2107/H7194: Anti-Arson Application

Public Laws 04-060/04-052

Effective: June 11, 2004

• Amendments to R.I. Gen. Laws § 27-5-2.1. These amendments repeal the antiarson applications section.

• Amendments to R.I. Gen. Laws §27-65-1. These amendments define a “highly

protected risk.”

0 lbs.), without regard to

negligence for a period not to exceed sixty (60) consecutive days.

S2107/H7194: Anti-Arson Application

Public Laws 04-060/04-052

Effective: June 11, 2004

• Amendments to R.I. Gen. Laws § 27-5-2.1. These amendments repeal the antiarson applications section.

• Amendments to R.I. Gen. Laws §27-65-1. These amendments define a “highly

protected risk.”

S2481/H7710: Motor and Other Vehicles

Public Laws 04-224/04-219

Effective: June 30, 2004

• Amendments to R.I. Gen Laws § 31-33-6 and § 31-34-4. These amendments

extend the sunset provisions regarding a vehicle owner’s liability until July 1,

2005.

S2619/H7325: Inspection at Policy Inception

Public Laws 04-065/04-114

Effective: June 11, 2004/June 17, 2004

•

Amendments to R.I. Gen. Laws § 27-10.1-10. These amendments allow

insurers to waive inspection requirements upon written notice to the Department

of Business Regulation. If an insurer chooses to elect waiver, the insurer shall

deliver to the Insurance Division a written notice that the election has been

made.

• Department Action: The Department has amended Insurance Regulation 77 to

address the insurers’ ability to waive the inspection process.

S2817/H8168: Form of Standard Policy

Public Laws 04-138/04-140

Effective: June 23, 2004

• Amendments to R.I. Gen Laws § 27-5-3. These amendments increase the

number of days written notice of cancellation is required, from five (5) to thirty

• Department Action: The Department has amended Insurance Regulation 77 to

address the insurers’ ability to waive the inspection process.

S2817/H8168: Form of Standard Policy

Public Laws 04-138/04-140

Effective: June 23, 2004

• Amendments to R.I. Gen Laws § 27-5-3. These amendments increase the

number of days written notice of cancellation is required, from five (5) to thirty

(30) days; written notice of ten (10) days is required for non-payment of

premium. The amendments also require the “prompt refund” of excess premium

rather than refund on demand.

S2987/H8019: Rental Vehicles

Public Laws 04-392/04-245

Effective: July 5, 2004/July 1, 2004

• Amendments to Section 3 of Chapter 339 of the Public Laws of 1998 as

amended by chapter 1-15 of the Public Laws of 2002. These amendments repeal

the sunset provisions regarding responsibility of owners of rental vehicles.

S3057/H8438: Commercial Special Risks

Public Laws 04-091/04-320

Effective: June 11, 2004/July 8, 2004

• Amendments to R.I. Gen. Laws § 27-65-1(e) and § 27-5-2. These amendments

exempt commercial special risks from the standard fire policy provisions.

S3170/H8164: Lead Hazard Reduction Act

Public Laws 04-223/04-221

Effective: June 30, 2004

• Amendments to R.I. Gen Laws § 23-24.6-17 and § 42-128.1-1 et seq.. These

amendments delay the implementation of the Lead Hazard Reduction Act

(“Act”) to July 1, 2005.

•

Department Action: The Department issued Insurance Bulletin 2004-5

addressing issues raised as a result of the delay in implementation of the Act.

Insurers should not refile forms, rates or exclusions that were approved for use

prior to June 30, 2004. Insurers are not required to withdraw previously

approved filings. The law provides that all endorsements, forms and rules that

were in effect prior to June 30, 2004 will remain in effect until July 1, 2005 or

until the carrier receives approval to use alternative forms, rates or exclusions

nsurers should not refile forms, rates or exclusions that were approved for use

prior to June 30, 2004. Insurers are not required to withdraw previously

approved filings. The law provides that all endorsements, forms and rules that

were in effect prior to June 30, 2004 will remain in effect until July 1, 2005 or

until the carrier receives approval to use alternative forms, rates or exclusions.

The Department will maintain the status quo with regard to exclusions. The

Department will maintain the moratorium on approval of new exclusions until

July 1, 2005. Carriers that did not have approved exclusions prior to June 30,

2004 should continue to write based upon their approved forms. Please see

Insurance Bulletin 2004-5 for further information. The Department will be

amending Insurance Regulation 101 accordingly.

H8042: Casualty Insurance Rating-Rating for Non-Business Policies

Public Laws 04-481

Effective: July 7, 2004

• Amendments to R.I. Gen. Laws § 27-9-7.3 and § 27-6-8.1. These amendments

provide for a flex rating system that allows insurers to use rates once filed if the

rates fall within a + or – 5% range on a statewide basis.

• Department Action: The Department will soon issue a Bulletin to address filing

limitations and requirements under the flex rating law.

H8237: Unfair Competition & Practices. Free Selection of Auto Body Repair

Shop.

Public Laws 04-488

Effective: July 7, 2004

• Amendments to R.I. Gen. Laws § 27-29-4(15). These amendments provide

that auto body repair shops may file a written complaint with the Department

alleging a violation under subsection (15) if it is accompanied by a statement

written and signed by the insured or claimant setting forth the factual basis of

the complaint. The insured or claimant must voluntarily appear and testify at

any administrative proceedings on the complaint.

These amendments provide

that auto body repair shops may file a written complaint with the Department

alleging a violation under subsection (15) if it is accompanied by a statement

written and signed by the insured or claimant setting forth the factual basis of

the complaint. The insured or claimant must voluntarily appear and testify at

any administrative proceedings on the complaint.

• Department Action: The Department issued Insurance Bulletin 2004-2 to clarify

insurance companies’ obligations pursuant to R.I. Gen. Laws § 27-29-4(15).

Workers’ Compensation

S2749/H7870: Relating to Workers’ Compensation

Public Laws 04-293/04-273

Effective: July 2, 2004

• Amendments to R.I. Gen. Laws § 28-29-2, § 28-33-18.3, § 28-33-25, § 28-33-

25.1, § 28-36-15 and § 42-35-18. These amendments make changes to

procedures, benefits, insurance and general provisions under Workers’

Compensation.

H7872: Relating to Labor Examination of Claimants

Public Laws 04-471

Effective: July 7, 2004

• Amendments to R.I. Gen. Laws § 28-39-12. These amendments provide that

examinations of claimants receiving benefits must be conducted by a qualified

healthcare provider.

Copies of Rhode Island Insurance Regulations and Insurance Bulletins are accessible by

visiting the Department’s website at www.dbr.ri.gov.

Copies of Rhode Island General Laws are accessible by visiting the Secretary of State's

website at http://www.rilin.state.ri.us/statutes/statutes.html.

Copies of Senate and House Bills are accessible by visiting the General Assembly’s

website at: http://dirac.rilin.state.ri.us/BillStatus/webclass1.asp.

Marilyn Shannon McConaghy

Director, Department of Business Regulation

September 30, 2004