Industry Issues | Surplus Lines Reform Attachments

Rhode Island Legislature Passes Bill on Premium Payment Regulations for Surplus Lines Policies

Objectionable Surplus Lines Bill Passes Legislature, Industry Seeking Veto

Despite significant opposition, a bill for a Cranston, RI insurance agency with close political ties with Rhode Island Assembly Speaker Nick Mattiello and Representative Scott Slater passed the House and was fast-tracked through the Senate, with a vote of 13 yea, 12 nay and 12 abstained. House Bill 7909 has been enrolled and will be delivered to the Governor for signature.
Representatives Mattiello and Slater defend the bill as being pro-consumer, permitting consumers up to 45 days before a cancellation notice is issued for non-payment of their premium. The bill provides that only after the 45-day period has passed may a cancellation notice be issued to the consumer, with a 10-day notice.

An industry coalition is calling for the Governor's veto of the bill.

As passed, the Rhode Island "Surplus Lines Insurance" laws would be amended to add the following new section:

27-3-52. Payment of surplus lines insurance - Cancellation.

If a surplus lines insurer allows agency bill by the surplus lines broker, the surplus lines broker may bill the producing agent the net payment (gross premium minus any commissions and fees). The bill is not due to surplus lines broker by the producing agent any earlier than forty-five (45) days after the end of the month in which the transaction occurs. After the forty-five (45) day period the policy may be cancelled with a non-payment of premium cancellation notice that will include a ten (10) day notice.

This Act will become effective upon the Governor's signature.

Rhode Island Surplus Lines Regulatory Update - Annual Renewal Fee

Rhode Island Re-issues Annual Renewal Fees Notice to Surplus Lines Insurers

PCI learned that the Rhode Island Department of Business Regulation (DBR) sent out Annual Renewal Fee notices, dated January 29, 2018, to the primary annual statement contact of all foreign insurance companies writing insurance in RI. As confirmed with PCI members, this included notice to registered surplus lines companies. The 2018 invoice indicated that all filing companies were subject to not only a minimum annual statement fee of $100, but also a $100 Certificate Renewal, and $25 Publications fee. Further, if the company's domestic state charges foreign insurers some other fee (like for fraud assessment), then likewise, the filing company must pay that applicable amount (retaliatory fee) to RI.

Nonetheless, the notice was issued pursuant to RI Gen Laws Section 27-2-17(a) that applies to a "foreign company licensed to conduct business in Rhode Island." As we know, surplus lines insurers are NOT licensed to conduct business in RI, in accordance with the state surplus lines laws.

PCI therefore reached out to the DBR for clarification. The Department responded affirmatively to the error.

PCI has received confirmation from member companies that a corrective notice was mailed out, dated February 20, stating that "as a surplus lines writer in the State of Rhode Island, you should only pay the annual statement fee of $100."

Rhode Island Eliminates 'Zero Reports' for Surplus Lines Filings

The Rhode Island Department of Business Regulation (DBR), Insurance Division, has eliminated a requirement that insurers file "zero reports" for most filings, excluding contracted insurance producer reports. The 2013 updated Special Reporting Requirements impact two reports that are deemed applicable to surplus lines insurers - Professional Liability Annual Report and Professional Liability Claim Settlement Reports. PCI continues to express its standing opposition to that surplus lines determination by the DBR. Nonetheless, this is a positive development.

Effective in 2013, "zero reports" are also no longer required for Surplus Line Broker Annual Reports and Lead Liability Coverage Reports filed by brokers.

Refer to January 18, 2013 PCI Adopted Regulation Bulletin.

In addition to eliminating the "zero report" filing requirement for most filings, the DBR will require insurers to electronically transmit filings to, except contracted insurance producer reports and labor rate surveys which must be e-mailed to and, respectively.

Rhode Island Revises CAT Loss Summary Report

The following information highlights a November 20, 2012, insurance notice from the Rhode Island Department of Business Regulation (DBR) that amended the "CAT Loss Summary Report," in connection with Storm Sandy claims. This is a second amendment to change the initial due date of the first report and to expand the scope of the reporting requirements.

Refer to PCI Adopted Regulation Bulletins published on November 6, 2012 and November 21, 2012.

In addition to licensed property and casualty insurers (excluding fidelity and surety, workers compensation, medical malpractice, professional liability, and reinsurance), the DBR will now require approved surplus lines insurers and insurers that write flood insurance under the "Write-Your-Own (WYO) Flood Insurance Program" and excess flood to complete the report. The DBR will also require insurers to provide information about their company's current reserves in a new column, "Case Incurred Loss."

The DBR changed the initial due date of the first report from November 13, 2012 to December 4, 2012 for the reporting period October 29, 2012 through November 30, 2012. The last or seventh report for 2012 is due on March 25, 2013. Thereafter, all reports must be submitted to the DBR by the first Tuesday of every month for claims reported as of the preceding Friday, until 95 percent of the claims are closed for all impacted lines.

Rhode Island Enacts SLIMPACT Surplus Lines Reform

Rhode Island enacted House Bill 5110 and companion Senate Bill 88, approved by Gov. Lincoln Chafee on May 27, and becomes effective upon passage. This law enacts the Surplus Lines Insurance Multi-State Compliance Compact (SLIMPACT).

Bill sponsor, Representative Brian Kennedy, successfully advanced this SLIMPACT legislation through the legislative process, and in conjunction with House Bill 5953 and companion Senate Bill 758 (also approved on May 27), make amendments to Rhode Island law governing surplus lines insurance to comply with requirements of the Nonadmitted and Reinsurance Reform Act of 2010 (NRRA) legislation enacted in Title V, Subtitle B of the federal Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

PCI testified at committee hearing and actively lobbied in support of the legislation.

NCOIL Past President and Chair of the Rhode Island House Corporations Committee, Rep. Kennedy stated: "SLIMPACT represents the one national surplus lines tax reform effort that enjoys the support of major organizations representing state legislators—including NCOIL, CSG, and NCSL—as well as the endorsements of key insurance industry and producer stakeholders. It was developed over many years and is patterned after a life insurance compact that now claims nearly 40 states as member jurisdictions. We look forward to similar broad adoption of SLIMPACT, as lawmakers are already comfortable with the insurance compact approach to national reform.

See the attached documents for a bill summary of HB5110/SB88 and HB5953/SB758.

NCOI Press Release

Rhode Island Chooses Compact, SLIMPACT is on the Move | June 3, 2011

Rhode Island Introduces SLIMPACT Legislation, House Bill 5110/Senate Bill 0088

Rhode Island Rep. Brian Kennedy (D) introduced SLIMPACT legislation, House Bill 5110; while Sen. David Bates (R) introduced companion bill Senate Bill 0088. This act would establish the surplus lines insurance multi-state compliance compact (SLIMPACT) to protect the premium tax revenues of the compacting states through facilitating the payment and collection of premium tax on non-admitted insurance, and to protect the interests of the compacting states by supporting the continued availability of such insurance to consumers.

Rep. Kennedy is current-chair, RI House Corporations Committee and past-president of the National Conference of Insurance Legislators (NCOIL). Sen. Bates is current-Senate Minority Whip.

HB 5110 is pending in the House Corporations Committee and scheduled for hearing and consideration on March 8, 2011. PCI will be in attendance at the hearing in support. Superintendent of Insurance Joseph Torti is expected to voice objection to SLIMPACT and preference for NAIC's NIMA proposal.

SB 0088 is currently in front of the Senate Corporations Committee.