2009 Legislative Changes

Department of Business Regulation Insurance Division 1511 Pontiac Avenue, Bldg. 69-2 Cranston, Rhode Island 02920 Insurance Bulletin Number 2009-8 2009 Legislative Changes The following legislative amendments were enacted during the 2009 session of the Rhode Island General Assembly. This information is being provided in accordance with R.I. Gen. Laws § 27-71-14(a). This bulletin is being provided for informational purposes only and may not be an all-inclusive list of amendments that impact the insurance industry. Licensees should refer to the bills themselves to determine the impact they have on the licensee. Any person wishing to be included in these annual notifications pursuant to R.I. Gen. Laws § 27-71-14(b) who is not currently on the interested parties list should send an email request to DBR.InsNotice@dbr.ri.gov. Rhode Island Life and Health Guaranty Association H5771a 2009 P.L. ch. 158 Effective January 1, 2010 S0462a 2009 P.L. ch. 169 Effective January 1, 2010 This legislation was introduced at the request of the Department to update the Rhode Island Life and Health Guaranty Association Act to the most recent version of the National Association of Insurance Commissioners (“NAIC”) Model Act. The updates include clarification that Medicare Parts C & D are not covered by the Act, clarification of a $300,000 maximum benefit for long term care, increase in annuity maximum benefits to $250,000, clarification that liquidator may obtain a report of premiums received by the association, clarification as to access to information after an order of liquidation, specifications on reinsurance receivables, clarification of venue for litigation, increase in maximum pro rata assessment, additional requirements to the plan of operation and increase in the automatic stay to 180 days. Examinations H5903 2009 P.L. ch. 302 Effective November 13, 2009 S0387as amended 2009 P.L. ch. 301 Effective November 4, 2009 This legislation was introduced at the request of the Department to update the insurance examination statute to the current NAIC Model Act. In addition a section was added to clarify the process, procedures and confidentiality requirements for financial analysis of insurance companies. Consumer Credit Insurance H5822a 2009 P.L. ch. 292 Effective February 13, 2010 S0465a 2009 P.L. ch. 293 Effective February 13, 2010 This legislation was introduced at the request of the Department to update the Rhode Island Credit Life and Credit Accident and Health Acts to the current NAIC Model Act. The legislation expands the types of credit insurance subject to the Departments’ oversight and adds consumer protections to those products. The Department will be amending 230-RICR-20-60-1 to reflect these statutory changes. Insurers are required to review current policy forms and rules to determine if revisions are required to be filed. Group Life Insurance H5826a 2009 P.L. ch. 300 Effective November 13, 2009 S0463a 2009 P.L. ch. 299 Effective November 13, 2009 This legislation was introduced at the request of the Department to add the NAIC Group Life Insurance standards adopted by most other states to the Rhode Island statutes. Insurers are required to review current policy forms and rules to determine if revisions are required to be filed. Insurers issuing group policies to trusts should review the requirements to ensure that policies comply with the statutory standards. Insurance Division Omnibus Legislation H5773a 2009 P.L. ch. 304 Effective November 13, 2009 and January 1, 2010 S0667a 2009 P.L. ch. 303 Effective November 13, 2009 and January 1, 2010 This legislation was introduced at the request of the Department to update various provisions of title 27. The provisions that are effective immediately are: (1) R.I. Gen. Laws § 27-2-14 has been amended to provide that service of process on the Department as agent for foreign insurance companies may be accomplished by mail or whatever method deemed appropriate by the Department. The Department intends to promulgate a regulation concerning service of process on insurance companies in the near future. (2) R.I. Gen. Laws § 27-3-38 was amended to give the Department discretion on how to confirm that surplus line insurance taxes have been paid on license renewal. The Department intends to amend 230-RICR-20-50-1 in the near future. (3) R.I. Gen. Laws § 27-10-8 was amended to allow the Department to issue emergency adjuster licenses for all lines of insurance in the event of a catastrophe. The Department intends to amend 230-RICR-20-50-4 in the near future. The provisions which are effective on January 1, 2010 are: (1) R.I. Gen. Laws § 27-7-2.5 was amended to require rejection of medical payments coverage to be in writing. The Department intends to amend 230-RICR-20- 05-1 in the near future. (2) R.I. Gen. Laws § 27-20.1-5 was amended to place nonprofit dental service corporations on the same examination schedule as all other insurers. (3) R.I. Gen. Laws § 27-29-13.2 was amended to provide additional information on short rated policies. For short rate cancellation provisions, insurers are required to review current policy forms and rules to determine if revisions are required to be filed. (4) R.I. Gen. Laws § 27-29-13.3 was amended to provide a fraud warning on claim forms and applications for insurance. (5) R.I. Gen. Laws § 27-34.3-14 was amended to remove a typographical error from the statute. Provisions of this bill that require revised filings will be allowed an administrative implementation extension to March 1, 2010. The Department acknowledges that it may not be feasible to submit revisions, obtain necessary approvals, and implement these changes for the January 1, 2010 effective date and, therefore, provisions of this legislation that require revised filings will be allowed an administrative implementation extension to March 31, 2010. This extension does not, in any way, impact the true effective date of the statute for purposes of contract or other claims brought under the insurance contract. Life Settlements Act H5199Aaa 2009 P.L. ch. 195 Effective July 1, 2010 S0229b 2009 P.L. ch. 262 Effective July 1, 2010 This legislation is a comprehensive regulation of Life Settlement transactions based upon the National Conference of Insurance Legislators (NCOIL) Model Act. The legislation bars stranger-originated life insurance practices, requires licensing of life settlement providers and brokers, requires approval of life settlement forms, provides a basis for license suspension or revocation, provides requirements for life settlement contracts, subjects providers to reporting and examination requirements, regulates the advertisement of life settlement contracts, provides for disclosure to owners and insurers, provides requirements of and prohibited practices concerning these transactions and provides remedies and penalties for violations. The Department will be issuing further guidance as to compliance prior to July 1, 2010. Hurricane Deductibles H5275suba 2009 P.L. ch. 15 Effective August 1, 2009 S0231suba 2009 P.L. ch. 42 Effective August 1, 2009 This legislation provides that the application of hurricane deductibles will be governed by reports of sustained winds by the national weather service and defines the trigger of deductible in Block Island versus the remainder of the state. 230-RICR-20- 05-13 has been amended to reflect these changes. Insurers are required to submit revised policy forms and rules in accordance with these amendments. Insurers are encouraged to utilize the exact language as provided for in statute to avoid any delay in approvals. Statute of Limitations H5970 2009 P.L. ch. 142 Effective July 16, 2009 S0257 2009 P.L. ch. 123 Effective July 16, 2009 This legislation provides a limited 120 day extension of the statute of limitations for some actions against insurers under R.I. Gen. Laws § 27-7-2. The bill is effective for actions pending on July 16, 2009. Chargeable Loss H5193a 2009 P.L. ch. 58 Effective January 1, 2010 S0473a 2009 P.L. ch. 78 Effective January 1, 2010 This legislation increases the amount of a chargeable loss for automobile insurance from $1,000 to $1,500. 230-RICR-20-05-3 has been amended to reflect this statutory change. Insurers are required to submit revised policy forms and rules in accordance with these amendments. Mobile Units H5893a 2009 P.L. ch. 126 Effective July 16, 2009 S0450aa 2009 P.L. ch. 151 Effective July 16, 2009 Requires that auto body repairs, other than glass repairs and installations or paintless dent repair, be done at a fixed location by a licensee under R.I. Gen. Laws § 5- 38-1 et seq. Special Joint Commission to Study the Underground Economy and Employee Misclassification H6329 Resolution 367 Effective November 13, 2009 Extended the Special Joint Commission’s reporting date to the General Assembly until July 30, 2010, and provides that said Commission shall expire on July 31, 2010. Rental Networks H5453b 2009 P.L. ch. 190 Effective January 1, 2010 S0548a 2009 P.L. ch. 209 Effective January 1, 2010 Provides for rental of health care provider networks by entities other than insurers. Nurse Practitioners H5537a 2009 P.L. ch. 351 Effective January 1, 2010 Requires that all health insurance contracts provide coverage for treatment by nurse practitioners. Dental Contracts H5454a as amended 2009 P.L. ch. 41 Effective June 18, 2009 S390a 2009 P.L. ch. 52 Effective June 26, 2009 Provides that a contract between an insurer and dentist may not set fees for services other than those services covered by the insurer. Small Employer Health Insurance H5536a 2009 P.L. ch. 48 Effective January 1, 2010 Limits combined age and gender adjustment factors on renewal of small employer health insurance contracts. Tobacco Cessation H5823b 2009 P.L. ch. 187 Effective January 1, 2010 S540a 2009 P.L. ch. 291 Effective January 1, 2010 Under the current tobacco cessation benefit statutes, R. I. Gen Laws §§ 27-18-66, 27- 19-57, 27-20-53 and 27-41-70, health insurers in Rhode Island are required to provide coverage for nicotine replacement therapy (NRT) when combined with 8 half-hour tobacco cessation counseling sessions. This legislation expands the coverage requirement to include FDA-approved smoking cessation medications, but only when paired with 16 half-hour mandatory counseling sessions. The statutes also give the Office of the Health Insurance Commissioner (OHIC) the ability to redefine tobacco cessation treatments that insurers must cover. HIV/AIDS testing H5415B 2009 P.L. ch. 196 Effective July 1, 2009 Limits combined age and gender adjustment factors on renewal of small employer health insurance contracts. Copies of Rhode Island Insurance Regulations, Insurance Bulletins and applicable Rhode Island General Laws are accessible by these links or by visiting the Department’s website at https://dbr.ri.gov/. Copies of the Senate and House bills are accessible by these links or by visiting the Rhode Island General Assembly website at www.rilin.state.ri.us. In light of above amendments, insurers are required to review current policy forms, rules and rates to determine if new and/or revised filings are required and to timely submit such filings in SERFF for the Department’s review and approval. Joseph Torti III Associate Director and Superintendent of Insurance November 20, 2009