§ 27-20.7-12 - Certificate of authority required. - Rhode Island Statutes

SECTION 27-20.7-12

   § 27-20.7-12  Certificate of authorityrequired. – (a) No person shall act as, or offer to act as, or hold himself or herself outto be an administrator in this state without a valid certificate of authorityas an administrator issued by the commissioner.

   (b) Applicants to be an administrator shall make anapplication to the commissioner upon a form to be furnished by thecommissioner. The application shall include or be accompanied by the followinginformation and documents:

   (1) All basic organizational documents of the administrator,including any articles of incorporation, articles of association, partnershipagreement, trade name certificate, trust agreement, shareholder agreement andother applicable documents and all amendments to those documents;

   (2) The bylaws, rules, regulations or similar documentsregulating the internal affairs of the administrator;

   (3) The names, addresses, official positions and professionalqualifications of the individuals who are responsible for the conduct ofaffairs of the administrator; including all members of the board of directors,board of trustees, executive committee or other governing board or committee;the principal officers in the case of a corporation or the partners or membersin the case of a partnership or association; shareholders holding directly orindirectly ten percent (10%) or more of the voting securities of theadministrator; and any other person who exercises control or influence over theaffairs of the administrator;

   (4) Annual financial statements or reports for the two (2)most recent years which prove that the applicant is solvent and any informationthat the commissioner may require in order to review the current financialcondition of the applicant;

   (5) A statement describing the business plan includinginformation on staffing levels and activities proposed in this state andnationwide. The plan must provide details setting forth the administrator'scapability for providing a sufficient number of experienced and qualifiedpersonnel in the areas of claims processing, record keeping and underwriting;

   (6) If the applicant will be managing the solicitation of newor renewal business, proof that it employs or has contracted with an agentlicensed by this state for solicitation and taking of applications. Anapplicant that intends to directly solicit insurance contracts or to act as aninsurance producer must provide proof that it has a license as an insuranceproducer in this state; and

   (7) Any other pertinent information that may be required bythe commissioner.

   (c) The applicant shall make available, for inspection by thecommissioner, copies of all contracts with insurers or other persons utilizingthe services of the administrator.

   (d) The commissioner may refuse to issue a certificate ofauthority if the commissioner determines that the administrator, or anyindividual responsible for the conduct of affairs of the administrator asdefined in subdivision (b)(3) of this section, is not competent, trustworthy,financially responsible or of good personal and business reputation, or has hadan insurance or an administrator license denied or revoked for cause by anystate.

   (e) A certificate of authority issued under this sectionshall remain valid, unless surrendered, suspended or revoked by thecommissioner, for so long as the administrator continues in business in thisstate and remains in compliance with this chapter.

   (f) An administrator is not required to hold a certificate ofauthority as an administrator in this state if all of the following conditionsare met:

   (1) The administrator has its principal place of business inanother state;

   (2) The administrator is not soliciting business as anadministrator in this state;

   (3) In the case of any group policy or plan of insuranceserviced by the administrator, the lesser of five percent (5%) or one hundred(100) certificate holders reside in this state.

   (g) A person is not required to hold a certificate ofauthority as an administrator in this state if the person exclusively providesservices to one or more bona fide employee benefit plans each of which isestablished by an employer or an employee organization, or both, and for whichthe insurance laws of this state are preempted pursuant to the EmployeeRetirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. Thesepersons shall register with the commissioner annually, verifying their statusas described in this section.

   (h) An administrator shall immediately notify thecommissioner of any material change in its ownership, control or other fact orcircumstance affecting its qualification for a certificate of authority in thisstate.

   (i) No bonding shall be required by the commissioner of anyadministrator whose business is restricted solely to benefit plans which areeither fully insured by an authorized insurer or which are bona fide employeebenefit plans established by an employer or any employee organization, or both,for which the insurance laws of this state are preempted pursuant to theEmployee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq.