230-RICR-20-05-11
230-RICR-20-05-11. Basic Property Insurance Inspection and Placement Program (version Amendment, 04/15/2009 to 04/15/2009)
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Reg. # 15
State of Rhode Island and Providence Plantations
DEPARTMENT OF BUSINESS REGULATION
Division of Insurance
1511 Pontiac Avenue, Bldg. 69-2
Cranston, RI 02920
INSURANCE REGULATION 15
BASIC PROPERTY INSURANCE INSPECTION AND PLACEMENT
PROGRAM
Table of Contents
Section 1
Authority
Section 2
Purpose
Section 3
Definitions
Section 4
Inspections and Reports
Section 5
Provisional Binders
Section 6
Limits of Coverage and Deductibles
Section 7
Policy Issuance/Declination
Section 8
Reasonable Underwriting Standards
Section 9
Participation of Member Companies
Section 10
Authority to Issue Policies on Behalf of Members
Section 11
Rates and Forms
Section 12
Cancellation and Nonrenewal
Section 13
Right of Appeal
Section 14
Commissions
Section 15
Coding and Reports
Section 16
Administration
Section 17
Annual and Special Meetings
Section 18
Duties of the Committee
Section 19
Installment Payment Plan
Section 20
Public Education
Section 21
Termination of the Program
Section 22
Severability
Section 23
Effective Date
Section 1
Authority
This Regulation is promulgated in accordance with R.I. Gen. Laws § 27-33-11
and 42-14-17.
Section 2
Purpose
The purpose of this Regulation is to implement the Basic Property Insurance
Inspection and Placement Program (hereinafter “this Program”) as follows:
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(1)
To make Basic Property Insurance available to qualified applicants who have
been unable to secure such insurance in the normal market, subject to the
conditions hereinafter stated.
(2)
To mandate the participation of all domestic Insurers and all Insurers licensed to
write those classes of insurance listed in R.I. Gen. Laws §§ 27-8-1 and 27-8-3 in
the State of Rhode Island and to equitably apportion and distribute the writings,
expenses, profits, if any, and losses of this Program among Insurers licensed to
write Basic Property Insurance, as defined herein, in this State.
(3)
To encourage the improvement of properties located in urban areas and to further
orderly community development.
(4)
To make public the purposes and procedures of this Program.
Section 3
Definitions
(1)
"Basic Property Insurance" shall mean, in addition to any and all coverages
specifically enumerated in R.I. Gen. Laws § 27-33-10, insurance against direct
loss to property as defined and limited in standard fire policies in (1) extended
coverage; (2) vandalism and malicious mischief; (3) broad and special form
dwelling coverage commonly referred to as DP-2 and DP-3, (4) sprinkler leakage
endorsements thereon; (5) homeowners package coverage on owner-occupied
habitational risks for one to four families, and for homeowners tenants forms; (6)
the liability coverages for one to four family owner and non-owner occupied
dwellings, either as a personal liability endorsement to a dwelling property policy
or as a "stand alone" dwelling liability policy; and (7) lead liability insurance for
any pre-1978 residential rental property, either by endorsement to a homeowners
or dwelling liability policy or as a "stand alone" lead poisoning liability insurance
policy. It shall not include automobile or farm risks, with the exception of lead
liability coverage as a "stand alone" policy for farmowners dwellings.
(2)
"Commissioner" means the Director of the Department of Business Regulation or
his or her designee.
(3)
"Insurer" shall mean any insurance company or other organization licensed to
write, and writing property or liability insurance business, including the property
and liability components of multi-peril policies, on a direct basis in this state who
is a member of the Rhode Island Joint Reinsurance Association.
(4)
"Producer" means licensed insurance producer, as defined in R.I. Gen. Laws § 27-
2.4-1 et seq.
(5)
"Program" means the Basic Property Insurance Inspection and Placement
Program as set forth in this Regulation.
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(6)
"Premiums Written" shall mean gross direct premiums written during the most
recent calendar year for which data is available, as determined by the Association,
with respect to property in this State on all property and liability policies
(excluding "Flood", as written by the National Flood Insurance Program),
including all homeowners policies and the fire, other allied lines and liability
components of all dwelling policies and commercial multi-peril policies, as
computed by the Association, less return premiums, dividends paid or credited to
policyholders, or the unused or unabsorbed portion of premium deposits.
(7)
" Rhode Island Joint Reinsurance Association" and the “Rhode Island FAIR Plan”
(Fair Access to Insurance Requirements), and the “Association” shall be
considered synonymous and herein referred to as the Association and means the
organization formed by Insurers to administer this Program herein set forth.
Section 4
Inspection and Reports
(1)
Any applicant may submit to the Association directly or through a licensed
Producer designated by the applicant a completed application for a property
inspection and insurance coverage or for immediate certification insurance
coverage on a form prescribed by the Association, specifying the requested
effective date for such coverage.
(2)
The Association shall have the right to inspect any property, on which immediate
coverage is not requested, before accepting or declining coverage, provided that
the Association may decline coverage if the application discloses that the property
or applicant fails to meet the underwriting standards and other requirements of
this Program, as set forth in this Regulation, without the need for an inspection.
(a)
The inspection shall be scheduled promptly and shall cover the
construction, maintenance, materials and occupancy characteristics of the
property and any other conditions, which increase the risk of loss or render
it uninsurable. Photographs may be taken during the inspection to
document observable conditions.
(b)
Except as provided in this Section, when the inspection is completed the
Association shall accept or reject the application. If the application is
rejected, the Association shall notify the applicant and Producer in writing
of its reasons and shall provide to the applicant and Producer a copy of the
Inspection Report, without charge, upon request. If the application is
conditionally declined, the Association shall also give the applicant an
opportunity to correct any physical conditions indicated on the written
notification before making the declination final.
(3)
When a completed application for immediate coverage is submitted, and
approved, the Association shall accept or reject the application without first
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performing an inspection, and, if accepted, issue a policy of Basic Property
Insurance under this Program. The Association shall have the right to limit the
amount of lead liability coverage provided to an applicant under the immediate
coverage procedure.
(a)
The inspection shall be scheduled promptly and shall cover the
construction, maintenance, materials and occupancy characteristics of the
property and any other conditions, which increase the risk of loss or render
it uninsurable. Photographs may be taken during the inspection to
document observable conditions.
(b)
If the inspection reveals conditions which make insurance coverage with
the Plan unavailable pursuant to the Underwriting Standards detailed in
Section 8 of this Regulation, the Association shall notify the
applicant/insured and the Producer in writing of the conditions rendering
the property ineligible and shall provide to the applicant/insured and
Producer a copy of the Inspection Report, without charge, upon request,
and shall give the applicant/insured an opportunity to correct the condition
before canceling the policy.
(4)
The owner of any building or condominium unit or any tenant seeking insurance
coverage shall provide full access to the property, upon request by the
Association, for purposes of a physical inspection.
(5)
The inspection will be without cost to an applicant.
(6)
The manner and scope of the inspection shall be prescribed by the Association.
Section 5
Provisional Binders
To prevent lapses of insurance coverage for risks eligible under this Program
before coverage has been made available or declined, a provisional binder affording the
insurance requested, subject to all provisions of this Program, including but not limited to
a subsequent inspection of the property and compliance with the underwriting standards
and other Program requirements, will be automatically issued if:
(1)
Through no fault of the applicant, coverage has not been either offered or denied
within twenty (20) calendar days after the date the request for inspection was
received by the Association; and
(2)
The applicant, at the time of requesting the inspection or at any time prior to the
receipt of a written statement indicating that the property is uninsurable, pays the
estimated annual premium or deposit premium.
The Association shall thereafter promptly conduct an inspection of the property as
provided in Section 4 above and may decline to continue or cancel any provisional
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coverage, unless the applicant corrects any conditions which increase the risk of loss or
render the property uninsurable under this Program. Coverage provided under this
Provisional Binder provision shall be at the rates approved by the Commissioner for the
class of property to be insured, exclusive of any surcharge, but shall be subject to an
appropriate premium adjustment, if necessary, after the property has been inspected.
Section 6
Limits of Coverage and Deductibles
(1)
Limits of coverage shall be established in rules adopted by the Governing
Committee subject to approval by the Commissioner.
(2)
Standard and percentage deductibles, percentage participation clauses, and other
underwriting devices may be imposed by the Association on any commercial, or
non-owner occupied residential risk to meet special problems of insurability. In
addition, the Association may require large or special deductibles on a “consent to
rate basis” subject to approval by the Commissioner.
(3)
The Association may impose deductibles on all other risks only if there has been
excessive loss frequency and the applicant has failed to take reasonable steps to
correct any situation which has given rise to past losses. The deductibles used by
the Association will either be those approved by the Commissioner for use by all
insurers or those specifically approved by the Commissioner for the Association.
The Association may impose other deductibles with the approval of the
Commissioner.
(4)
No applicant shall be eligible to obtain lead liability limits in excess of the amount
of the applicant’s general liability limits, subject to the further restriction that an
applicant may not obtain lead liability coverage above the maximum limits
established by the Governing Committee and approved by the Commissioner.
Additionally, an applicant who does not produce valid and in force Prima Facie
Evidence of Compliance issued pursuant to R.I. Gen. Laws § 42-128.1-9 may
obtain less lead liability coverage than the amount of insurance offered by the
Association, provided however that such an applicant shall not be entitled to an
amount of insurance that is less than the minimum limits offered by the
Association.
Section 7
Policy Issuance/Declination
(1)
Upon approval by the Association of an application for coverage, or renewal of
coverage, and upon receipt by the Association of the full amount of the required
premium, (or if the applicant chooses an approved installment payment plan, the
full amount of the deposit premium) in cash, or by personal check, certified
check, bank check, money order, postal money order, or the check of a licensed
lending institution, the Association shall issue a policy in accordance with Section
10.
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(2)
Applications for coverage shall be declined where the property fails to meet
reasonable underwriting standards of the Association as set forth in Section 8
below or other requirements of the Association or this Program.
(3)
In the event of declination, the applicant shall be furnished a written statement of
the conditions which make the property uninsurable and the measures, if any,
which if taken would make the property insurable, or a written statement of any
other reasons for declination. The applicant shall also be informed of his or her
right to appeal such determination by the Association and be advised of the means
whereby such an appeal may be initiated in accordance with Section 13 of this
Regulation.
Section 8
Reasonable Underwriting Standards
(1)
In determining whether or not to accept the risk, the Association shall follow
reasonable underwriting standards which shall include, but not be limited to, the
following:
(a)
The right to decline or cancel insurance because of the physical condition
of the property, such as its construction, heating, wiring, evidence of
unrepaired damage or general deterioration (however, the mere fact that a
property does not satisfy all current building code specifications would
not, in itself, justify declining the risk);
(b)
The right to decline or cancel insurance because of the present use or
housekeeping of the property, such as abandonment, vacancy,
overcrowding, excessive rubbish or improper storage of flammable
materials;
(c)
The right to decline or cancel insurance because of other specific
characteristics of ownership, condition, occupancy, or maintenance which
are violative of law or public policy and which result in unreasonable
exposure to loss;
(d)
The right to decline or cancel insurance on buildings in which any one of
the following exists:
1.
Failure to pay real estate taxes on the property after the taxes have
been delinquent for one (1) year or more (real estate taxes shall not
be deemed to be delinquent for this purpose even if they are due
and constitute a lien, so long as a grace period remains under local
law during which such taxes may be paid without penalty);
2.
Failure, within the insured's control, to furnish heat, water, sewer
services or public lighting for thirty consecutive days or more;
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3.
Failure within a reasonable time to correct conditions dangerous to
life, health or safety.
(e)
The right to decline or cancel insurance on property:
1.
Where, because of physical conditions, there is an outstanding
demolition order, outstanding order to vacate or which has been
declared unsafe or uninhabitable in accordance with law;
2.
Where fire damage exists and the owner has not taken reasonable
steps to protect and secure the property;
3.
Where, following a fire, permanent repairs have not commenced
within sixty (60) days after satisfactory adjustment of loss; or
4.
Where fire damage exists and the insured has stated or such time
has elapsed as clearly indicates that the damage will not be
repaired.
(f)
The right to decline or cancel insurance where the applicant is in arrears in
the payment of insurance premiums to a licensed Producer or insurer for
the types of coverage which are offered by the Association;
(g)
The right to decline or cancel insurance on any building where it is vacant
or where sixty five percent (65%) of the building is unoccupied, unless the
building is undergoing rehabilitation. Upon request, the Association must
be provided with a schedule for such rehabilitation;
(h)
The right to decline or cancel insurance on any building which has been
abandoned or where there has been removal of fixtures or salvageable
material from the building and the owner can give no reasonable
explanation for such removal;
(i)
The right to decline or cancel insurance where reliable information is
secured indicating that the property will be burned for the purpose of
collecting insurance on the property;
(j)
The right to decline or cancel insurance where the applicant, insured,
mortgagee, loss payee, or any other person having a financial interest in
the property is convicted or where an unresolved indictment for the crime
of arson or for a crime involving a purpose to defraud an insurance
company exists;
(k)
The right to decline or cancel insurance where the property has been
subject to more than two (2) fires, each loss amounting to one percent
(1%) of the insurance in force, in any twelve (12) month period; or more
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than three (3) such fires in any twenty four (24) month period, provided
that the cause of such fires is due to conditions which are the
responsibility of the owner-named insured;
(l)
The right to decline or cancel insurance in those instances where the
Association has information which indicates that a moral hazard exists.
(2)
The Association shall not decline or cancel any risk for reasons of neighborhood
or area location or any environmental hazard beyond the control of the property
owner.
(3)
Reasonable underwriting standards with respect to any liability insurance policy
form or endorsement offered by the Association and Section II of homeowners
insurance shall include the general standards and, in addition, shall include, but
not be limited to, the following:
(a)
Hazardous physical conditions including, but not limited to, unfenced
swimming pools;
(b)
Presence of vicious animals;
(c)
Excessive loss frequency when the applicant has failed to take reasonable
steps to correct any situation which has given rise to past losses.
(4)
The Association shall have the right to decline or cancel, non-renew or withdraw
lead liability coverage of residential rental property owners who are ineligible for
such coverage in accordance with Section 10 of Insurance Regulation 101, as
follows:
(a)
A residential rental property owner who fails to remediate lead violations
which occur after June 30, 2004 on any property within ninety (90) days
of the issuance of a notice of violation.
(b)
A residential rental property owner who owns only one (1) property and
has more than one (1) unremediated dwelling unit at which a child was
poisoned prior to July 1, 2004.
(c)
A residential rental property owner who owns two (2) or more properties
and has more than two (2) unremediated dwelling units at which a child
was poisoned prior to July 1, 2004.
(5)
The right on the part of the Association to apply by endorsement in accordance
with the waiver provisions of the statutory standard fire insurance policy of the
State of Rhode Island a "Modern Materials" provision which would permit repairs
with modern materials, not necessarily those of like kind and quality, provided the
structure's integrity, utility and value are not impaired, and that the policyholder
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declines to insure the risk to its replacement cost value or a percentage thereof as
required to qualify for coverage under the special loss settlement endorsement.
Section 9
Participation of Member Companies
(1)
The Association may purchase reinsurance including catastrophic coverage.
(2)
Each Insurer shall participate in the writings, expenses, profits, if any, and losses
of the Association in the same proportion as its Premiums Written bear to the
aggregate Premiums Written by all Insurers in this Program.
(3)
The Governing Committee, acting on behalf of the Association, shall be
authorized to make a preliminary assessment upon all Insurers and such further
assessments as may be deemed necessary, with respect to any policy year.
(4)
The Association shall distribute to the Commissioner and to each insurer its
calculation of the insurer’s participation ratio for each policy year. The insurer
shall notify the Association in writing within thirty (30) days from the date of
mailing by the Association of any objection it may have to such calculation. If
the Association does not receive any objection within such thirty (30) day period,
the calculation shall be binding upon the insurer. Until the Association has
received the necessary data to calculate a participation ratio for any year, it may
use the participation ratio calculated for the prior policy year on a provisional
basis, but shall adjust any assessments made on the basis of such provisional
ratios when final participation ratios for the year are calculated.
Section 10
Authority to Issue Policies on Behalf of Members
(1)
The Association shall be authorized (a) to issue policies or certificates of
insurance in the name of the Association for risks found insurable by the
Association under this Program and (b) to provide for the investigation and
adjustment of claims, defense of policyholders, payment of losses and all such
other functions as are usual in servicing the insured under such policies, and (c) to
otherwise incur expenses consistent with the goals of this Program and the
interests of the Association, its members, and its insureds. Each insurer
irrevocably designates the Association as its agent in carrying out such functions.
(2)
Each insurer shall be a direct insurer under each policy or certificate of insurance
issued by the Association during any calendar year to the extent of its
participation for that year as determined in accordance with Section 9 of this
Regulation. Liability of each insurer shall be several, each for itself, and not joint,
and no insurer shall be liable under any such policy or certificate for the liability
of any other insurer thereunder, except as provided in Article VII of the Articles
of Agreement in case of the insolvency of a insurer.
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(3)
The Governing Committee shall from time to time designate in writing one or
more persons to act as attorney-in-fact for all companies to execute policies on
behalf of the insurers. No policy or certificate of insurance shall be affected or
invalidated by any change of the attorney-in-fact who, at the time such policy or
certificate of insurance was issued, shall have duly acted pursuant to the powers in
him or her then vested. Any policy or certificate of insurance issued pursuant to
this Section may be executed on behalf of the insurers by any attorney-in-fact
appointed hereunder, and each insurer agrees to be bound thereby to the extent of
its participation in the writings of the Association, as determined under Section 9
of this Regulation.
Section 11
Rates and Forms
(1)
All policies shall be for Basic Property Insurance on standard policy forms and
shall be issued for a term of one year.
(2)
The Association shall use such forms and rules consistent with this Program, as
may be filed by or on its behalf and approved by the Commissioner.
(3)
(a)
Premiums for policies shall be calculated in accordance with
classifications, rates and rating plans filed by or on behalf of the
Association and approved by the Commissioner. The Commissioner shall
approve rates filed by the Association based upon the standard that the
rates shall not be excessive, inadequate or unfairly discriminatory, giving
due consideration to the past and prospective loss and expense experience
for Basic Property Insurance, written in this state, trends in the frequency
and severity of losses, the investment income of the FAIR Plan and such
other information as the Commissioner may require. All rates shall be
calculated to be self-supporting consistent with sound actuarial principles.
Rates for Basic Property Insurance shall be approved by the
Commissioner, notwithstanding any limits on rate approval authority.
Nothing in this section shall be deemed to affect the duty of licensed
insurers in the State of Rhode Island to participate, as needed, on a direct
basis, in this Program pursuant to R.I. Gen. Laws §§ 27-33-2 and 27-33-11
and any rules and regulations promulgated thereunder, and to pay their
proportionate share of losses and expenses incurred by this Program upon
assessment by the Program. The cost of any rate filing subject to a public
hearing shall be borne by the Association and its insurers based upon their
proportional share of premiums written unless otherwise ordered by the
Commissioner.
(b)
In addition to the above, rates for lead poisoning liability coverage shall
also be subject to the standards set forth in R.I. Gen. Laws §42-128.1-9(e).
(4)
Return premium on all policies shall be calculated on a pro-rata basis, effective as
of the date of cancellation of the policy.
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Section 12
Cancellation and Nonrenewal
(1)
All Insurers participating in this Program and the Association on their own
business shall give thirty (30) days notice prior to cancellation or non-renewal of
any risk eligible under this Program except in the following cases:
(a)
Owner or occupant incendiarism;
(b)
Material misrepresentation;
(c)
Non-payment of premium;
(d)
At least sixty five percent (65%) of the rental units in the building are
unoccupied, and the insured has not obtained prior approval from the
participating Insurer or the Association of a rehabilitation plan which
necessitates a high degree of unoccupancy;
(e)
Loss or damage exists and the insured has stated or such time has elapsed
as clearly indicates that the damage will not be repaired;
(f)
Following a loss, permanent repairs following satisfactory adjustment of
loss have not commenced within sixty (60) days;
(g)
Property has been abandoned or there has been removal of undamaged
salvageable items from the building and the insured can give no
reasonable explanation for such removal;
(h)
Utilities such as electric, gas, or water services have been disconnected
and the insured has failed to pay his account for such services within one
hundred twenty (120) days, or real estate taxes have not been paid for a
two (2) year period after the taxes have become delinquent (real estate
taxes shall not be deemed to be delinquent for this purpose even if they are
due and constitute a lien, so long as a grace period remains under local law
during which such taxes may be paid without penalty).
(i)
Where reliable information that good cause exists to believe that the
building will be burned for the purpose of collecting the insurance on the
property;
(j)
Conviction or unresolved indictment of a named insured or loss payee or
any other person having a financial interest in the property of the crime of
arson or crime involving a purpose to defraud an insurance company;
(k)
Where the building has been subject to more than two (2) fires, each loss
amounting to at least one percent (1%) of the insurance in force in any
twelve (12) month period; or more than three (3) such fires in any twenty
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four (24) month period, provided that the cause of such fires is due to
conditions which are the responsibility of the owner-named insured;
(l)
Any reason which would have been grounds for declination of the risk
under Regulation 15 if such reason had been known or had been present at
the time of acceptance and becomes known or present during the policy
period.
(m)
Any reason which renders a residential rental property owner ineligible for
lead liability coverage under Section 10 of Insurance Regulation 101 shall
be grounds to cancel or non-renew a policy which provides lead liability
coverage, as follows:
(1)
A residential rental property owner who fails to remediate lead
violations which occur after June 30, 2004 on any property within
ninety (90) days of the issuance of a notice of violation.
(2)
A residential rental property owner who owns only one (1)
property and has more than one (1) unremediated dwelling unit at
which a child was poisoned prior to July 1, 2004.
(3)
A residential rental property owner who owns two (2) or more
properties and has more than two (2) unremediated dwelling units
at which a child was poisoned prior to July 1, 2004.
(2)
When a policy is cancelled or non-renewed, other than for non-payment of
premiums or the insured's having obtained substitute coverage or if the policy had
been issued through the Association, the insurer shall notify the insured and the
insured’s producer, if any, of possible eligibility for insurance through the
Association. Such notice shall accompany or be included in the cancellation or
non-renewal notice. The notice must be clearly identifiable by the insured. The
notice must provide information on how to contact the Association, including
address and telephone number(s), including a toll free number, and, alternatively,
to contact a licensed insurance producer for assistance in obtaining coverage
through the Association.
(3)
Any cancellation upon less than thirty (30) days notice arising out of any of the
conditions listed above of this section shall follow a procedure which includes as
a minimum, notification to the insured by the Association of the cancellation, with
a copy to the Commissioner, giving the reasons for the action and setting forth the
insured's right to appeal to the Commissioner for review of the cancellation. The
cancellation shall stand unless the Commissioner rules otherwise.
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Section 13
Right of Appeal
Any applicant for insurance and any person insured under this Program may
appeal to the Governing Committee within fifteen (15) days after mailing of notice of any
final underwriting ruling, action, or decision of the Association. The Governing
Committee shall issue its decision without undue delay. Any decision of the Committee
may be further appealed to the Commissioner within thirty (30) days. Orders of the
Commissioner shall be subject to judicial review pursuant to R.I. Gen. Laws § 42-35-15.
Section 14
Commissions
(1)
Commissions to the licensed Producer designated by the applicant shall be set by
the Governing Committee with approval of the Commissioner.
(2)
In the event of cancellation of a policy, or if an endorsement is issued which
requires premium to be returned to the insured, the Producer shall refund ratably
to the Association commissions on the unearned portion of canceled liability and
on reductions in premiums at the same rate at which such commissions were
originally paid.
(3)
All Insurers shall solicit the cooperation of their agents with this Program and no
Producer shall be penalized for submitting risks to the Association.
Section 15
Coding and Reports
(1)
Business written pursuant to this Program shall be regarded as a separate kind or
class of business for statistical purposes and shall be separately coded.
(2)
The Association shall submit periodic reports to the Commissioner, as the
Commissioner may request, setting forth the number of requests for inspection,
the number of risks inspected, and the results of inspections by the Association
together with such other information as the Commissioner may request.
(3)
The Association shall submit annual reports to the Commissioner in accordance
with and setting forth the information required under Insurance Regulation
101(9)(C).
Section 16
Administration
(1)
This Program shall be administered by a Governing Committee (hereinafter
referred to as the Committee), subject to the supervision of the Commissioner.
(2)
The Governing Committee shall consist of eighteen (18) members. Ten members
of the Committee shall be Insurers, at least two (2) of which shall be domestic
Insurers. These members shall be elected annually by cumulative voting of the
Insurers of the Association whose votes shall be weighed in accordance with the
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proportion that each Insurer's Premiums Written in the state during the most
recent calendar year for which data is available bears to the aggregate premiums
written by all Insurers in this Program. Not more than one (1) Insurer in a group
under the same management or ownership shall serve on the Committee at the
same time. Six (6) members of the Governing Committee shall be individuals
who are not employed by or otherwise affiliated with Insurers, Producers or other
entities of the insurance industry. These members shall be appointed annually by
the Chair of the Committee. The Committee shall also include two (2) members
who shall be licensed resident fire and casualty Producers in the State of Rhode
Island. Both of the aforementioned licensed fire and casualty Producers shall be
appointed by the Independent Insurance Agents of Rhode Island.
Section 17
Annual and Special Meetings
(1)
Meetings -- The annual meeting of the Insurers for the election of the Committee
and such other business as may be necessary shall be held in the State of Rhode
Island on a date fixed by the Governing Committee. At any regular or special
meeting at which the vote of the Insurers is or may be required on any proposal,
voting may be in person or by proxy. Voting at regular or special meetings, or
any vote of the Insurers which may be taken by mail, shall be cast and counted on
a weighted basis in the same proportion as each Insurer's Premiums Written bear
to the aggregate Premiums Written by all Insurers in this Program. Notice of
meetings of the Insurers shall be given by the Secretary and shall state the time,
date and place and the principal purposes thereof. Such notice may be given to
the Insurers by electronic mail or any other reasonable widely used electronic
format or by regular US Postal mail.
(2)
As soon as practicable after election to membership on the Committee, and
thereafter from time to time as it may elect, an Insurer shall designate a qualified
representative and an alternate of such representative to serve for it and shall
immediately notify in writing the Manager of the Association of such designation.
(3)
Officers -- The Committee shall elect a Chair, Vice Chair, Secretary, Treasurer,
and Manager.
(a)
The Chair shall preside over all meetings of this Committee and at all
meetings of the Insurers which are Members of the Rhode Island Joint
Reinsurance Association. The Chair shall discharge such other duties as
may be incidental to his office or as shall be required by these rules or by
the Committee.
(b)
The Vice Chair shall preside at any meeting of the Committee in the
absence of the Chair. In the event of death, incapacity, or disability of the
Chair, the Vice Chair shall perform the duties of the Chair until such
office has been filled by the Committee.
Page 15 of 17
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(c)
The Secretary shall issue all notices of meetings, record minutes of all
meetings, keep the records of the Committee, and discharge such other
duties as may be incidental to the office or as shall be required by these
rules or by the Committee.
(d)
The Treasurer shall discharge such duties as may be incidental to the
office or as shall be required by these rules or by the Committee.
(e)
The Manager shall discharge such duties as may be incidental to the office
or as shall be required by these rules or by the Committee.
(4)
Special Meetings -- Special Meetings of the Committee or of the Insurers may be
held upon the call of the Chair or in the event of resignation, death, or incapacity,
upon the call of the Vice Chair. Any six (6) members of the Committee, acting by
their designated representatives, may request the Chairman to call a meeting of
the Committee and any six (6) Insurers may request the Chair to call a meeting of
the Membership at such time and place and for such purposes as may be set out in
writing in such request. Should the Chair decline to call such meetings, the same
may be called by the six (6) members making the request. Such special meetings
may be held at the principal office of the Association or at such other place within
or without the State of Rhode Island as may be designated in the call.
(5)
Notices of Committee Meetings -- Notices of all Committee meetings shall be
given by the Secretary to the members of the Committee and to the Insurers, and
shall state the time and place and the principal purposes thereof, in order to
legally constitute the meeting, provided a majority of the designated
representatives of the Insurers shall be present at such meeting. Such notices may
be given to the members of the Committee by electronic mail or any other
reasonable widely used electronic format or regular US postal mail, and in the
case of Insurers directed to the attention of the designated representatives of the
Insurers and shall be sent or mailed at least ten (10) days in advance of the
meeting. Any Insurer or the designated representative of any Insurer may waive
notice of any meeting, and the presence of such representative at any meeting
shall constitute a waiver of notice as to such Insurer.
(6)
Advance Agenda -- The Secretary, after consultation with the Chair, shall prepare
in advance of each meeting of the Committee and each meeting of the Insurers an
agendum which, with such supporting data and information as may be
conveniently assembled, shall be forwarded to the members of the Committee or
their designated representatives or to the Insurers, as the case may be, in advance
of any such meeting.
(7)
Committees -- Subject to the Articles of Agreement, the Chair of the Committee
may appoint or the Committee may elect such standing committees or such
temporary or special committees as may be deemed necessary for the transaction
of its business.
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(8)
Ex-Officio Members -- The Chair of the Committee shall be an ex officio member
of all standing or special committees, with right to vote.
(9)
Voting by Committee – Every committee member shall have one (1) vote. Any
matter submitted to the Committee shall be carried if it is voted in the affirmative
by a majority of the committee members present at a meeting or attending by
teleconferencing, provided at least a quorum is participating. Committee voting
shall be permitted only by the designated representatives or alternates of the
committee members and by the public committee members and Producer
committee members in person at a meeting of the Committee, by teleconference
or by mail, in accordance with this Section. Voting by mail is permitted, provided
that any matter submitted for a mail vote shall carry only if it is voted in the
affirmative by a majority of the total number of committee members and receives
no negative vote.
Section 18
Duties of the Committee
(1)
The Committee shall meet as often as may be required to perform the general
duties of the administration of the Association. Ten (10) members of the
Committee shall constitute a quorum.
(2)
The Committee shall be empowered: to appoint or otherwise contract for the
services of a Manager; to budget expenses; to levy assessments including
preliminary assessments provided herein, or necessary or incidental to the
administration of this Program.
(3)
Annually the Manager shall prepare an operating budget which shall be subject to
approval of the Committee.
(4)
The Committee shall furnish to all Insurers and to the Commissioner a written
report of operations annually in such form and detail as the Committee may
determine.
Section 19
Installment Payment Plan
The Association may offer applicants, on a nondiscriminatory basis, the option to
pay premiums on an installment payment plan, consistent with plans offered to insureds
in the voluntary market, as approved by the Commissioner.
Section 20
Public Education
The Association, on behalf of all Insurers shall undertake a continuing public
education program, in cooperation with the Producers, to assure that this Program
receives adequate public attention.
Page 17 of 17
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Section 21
Termination of the Program
This Program shall not be terminated without a two-thirds vote of the majority of
the entire membership and the written consent of the Commissioner, and only after repeal
of R.I. Gen. Laws § 27-33-1 et seq. by the Rhode Island General Assembly. Any
obligations insured by the Association shall not be impaired by the expiration of this
Program and the Association shall be continued for the purpose of performing its
obligations to administer this Program. Any vote to terminate this Program shall specify
an effective date on which the Association shall cease writing policies, but the
Association shall continue in existence for as long as the Governing Committee shall
determine necessary in order to settle claims, carry out its obligations to policyholders
and wind up its affairs. The termination of the existence of the Association shall not
relieve the Members of their obligations to the Association or among themselves, but
such obligations shall continue until the affairs of the Association are finally wound up
and all funds are distributed and assessments paid.
Section 22
Severability
If any provision of this Regulation or the application thereof to any person or
circumstances is held invalid or unconstitutional, the invalidity or unconstitutionality
shall not affect other provisions or applications of this Regulation which can be given
effect without the invalid or unconstitutional provision or application, and to this end the
provisions of this Regulation are severable.
Section 23
Effective Date
This Regulation became effective on October 29, 1968 and the effective date of
all amendments to this Regulation are as set forth below.
EFFECTIVE DATE:
October 29, 1968
AMENDED:
October 15, 1970
July 14, 1971
September 1, 1972
October 1, 1973
September 23, 1975
May 11, 1979
August 14, 1980
March 5, 1981
October 25, 1977
November 8, 1982
REFILED:
January 2, 2002
AMENDED:
July 1, 2004
AMENDED:
April 15, 2009