§ 27-34.3-5 - Definitions. - Rhode Island Statutes

SECTION 27-34.3-5

   § 27-34.3-5  Definitions. – As used in this chapter:

   (1) "Account" means either of the two accounts created under§ 27-34.3-6.

   (2) "Association" means the Rhode Island life and healthinsurance guaranty association created under § 27-34.3-6.

   (3) "Authorized assessment" or the term "authorized" whenused in the context of assessments means a resolution by the board of directorshas been passed whereby an assessment will be called immediately or in thefuture from member insurers for a specified amount. An assessment is authorizedwhen the resolution is passed.

   (4) "Benefit plan" means a specific employee, union orassociation of natural persons benefit plan.

   (5) "Called assessment" or the term "called" when used in thecontext of assessments means that a notice has been issued by the associationto member insurers requiring that an authorized assessment be paid within thetime frame set forth within the notice. An authorized assessment becomes acalled assessment when notice is mailed by the association to member insurers.

   (6) "Commissioner" means the commissioner of insurance withinthe department of business regulation of this state.

   (7) "Contractual obligation" means any obligation under apolicy or contract or certificate under a group policy or contract, or portionof a group policy or contract for which coverage is provided under §27-34.3-3.

   (8) "Covered policy" means any policy or contract or portionof a policy or contract for which coverage is provided under § 27-34.3-3.

   (9) "Extra-contractual claims" means claims not arisingdirectly out of contract provisions, including, for example, claims relating tobad faith in the payment of claims, punitive or exemplary damages or attorneys'fees and costs.

   (10) "Impaired insurer" means a member insurer which is notan insolvent insurer, and

   (i) Is placed under an order of rehabilitation orconservation by a court of competent jurisdiction.

   (11) "Insolvent insurer" means a member insurer which afterJanuary 1, 1996, is placed under an order of liquidation by a court ofcompetent jurisdiction with a finding of insolvency.

   (12) "Member insurer" means any insurer licensed or whichholds a certificate of authority to transact in this state any kind ofinsurance for which coverage is provided under § 27-34.3-3, and includesany insurer whose license or certificate of authority in this state may havebeen suspended, revoked, not renewed or voluntarily withdrawn, but does notinclude:

   (i) A hospital or medical service organization, whetherprofit or nonprofit; or

   (ii) A health maintenance organization; or

   (iii) A fraternal benefit society; or

   (iv) A mandatory state pooling plan; or

   (v) A mutual assessment company or other person that operateson an assessment basis; or

   (vi) An insurance exchange; or

   (vii) An organization that has a certificate or licenselimited to the issuance of charitable gift annuities; or

   (viii) An entity similar to any of the above.

   (13) "Moody's corporate bond yield average" means the monthlyaverage corporates as published by Moody's investors service, inc., or anysuccessor to it.

   (14) "Owner" of a policy or contract and "policy owner" and"contract owner" means the person who is identified as the legal owner underthe terms of the policy or contract or who is otherwise vested with legal titleto the policy or contract through a valid assignment completed in accordancewith the terms of the policy or contract and properly recorded as the owner onthe books of the insurer. The terms owner, contract owner and policy owner donot include persons with a mere beneficial interest in a policy or contract.

   (15) "Person" means any individual, corporation, limitedliability company, partnership, association, governmental body or entity orvoluntary organization.

   (16) "Plan sponsor" means:

   (i) The employer in case of a benefit plan established ormaintained by a single employer;

   (ii) The employee organization in the case of a benefit planestablished or maintained by an employee organization; or

   (iii) In the case of a benefit plan established or maintainedby two (2) or more employers or jointly by one or more employers and one ormore employee organizations, the association, committee, joint board oftrustees, or other similar group of representatives of the parties whoestablish or maintain the benefit plan.

   (17) "Premiums" means amounts or considerations (by whatevername called) received on covered policies or contracts less returned premiums,considerations and deposits, and less dividends and experience credits."Premiums" does not include any amounts or consideration received for anypolicies or contracts or for the portions of policies or contracts for whichcoverage is not provided under § 27-34.3-3(b) except that assessablepremium shall not be reduced on account of § 27-34.3-3(b)(2)(iii) relatingto interest limitations and § 27-34.3-3(c)(2) relating to limitations withrespect to one individual, one participant and one owner. "Premiums" shall notinclude:

   (i) Premiums in excess of five million dollars ($5,000,000)on an unallocated annuity contract not issued under a governmental retirementbenefit plan (or its trustee) established under § 401, 403(b) or 457 ofthe United States Internal Revenue Code, 26 U.S.C. § 401, 403(b) or 457.

   (ii) With respect to multiple nongroup policies of lifeinsurance owned by one owner, whether the policy owner is an individual, firm,corporation or other person, and whether the persons insured are officers,managers, employees or other persons, premiums in excess of five milliondollars ($5,000,000) with respect to these policies or contracts, regardless ofthe number of policies or contracts held by the owner.

   (18) "Principal place of business" of a plan sponsor or aperson other than a natural person means the single state in which the naturalpersons who establish policy for the direction, control and coordination of theoperations of the entity as a whole primarily exercise that function,determined by the association in its reasonable judgment by considering thefollowing factors:

   (A) The state in which the primary executive andadministrative headquarters of the entity is located;

   (B) The state in which the principal office of the chiefexecutive officer of the entity is located;

   (C) The state in which the board of directors (or similargoverning person or persons) of the entity conducts the majority of itsmeetings;

   (D) The state in which the executive or management committeeof the board of directors (or a similar governing person or persons) of theentity, conducts the majority of its meetings;

   (E) The state from which the management of the overalloperations of the entity is directed; and

   (F) In the case of a benefit plan sponsored by affiliatedcompanies comprising a consolidated corporation, the state in which the holdingcompany or controlling affiliate has its principal place of business asdetermined using the above factors. However, in the case of a plan sponsor, ifmore than fifty percent (50%) of the participants in the benefit plan areemployed in a single state, that state shall be deemed to be the principalplace of business of the plan sponsor.

   (ii) The principal place of business of a plan sponsor of abenefit plan described in subsection (16)(iii) of this section shall be deemedto be the principal place of business of the association, committee, jointboard of trustees or other similar group of representatives of the parties whoestablish or maintain the benefit plan that, in lieu of a specific or cleardesignation of a principal place of business, shall be deemed to be theprincipal place of business of the employer or employee organization that hasthe largest investment in the benefit plan in question.

   (19) "Receivership court" means the court in the insolvent orimpaired insurer's state having jurisdiction over the conservation,rehabilitation or liquidation of the insurer.

   (20) "Resident" means a person to whom a contractualobligation is owed and who resides in this state on the date of entry of courtorder that determines a member insurer to be an impaired insurer or a courtorder that determines a member insured to be an insolvent insurer, whicheveroccurs first. A person may be a resident of only one state, which in the caseof a person other than a natural person shall be its principal place ofbusiness. Citizens of the United States that are either: (i) residents offoreign countries; or (ii) residents of United States possessions, territoriesor protectorates that do not have an association similar to the associationcreated by this chapter, shall be deemed residents of the state of domicile ofthe insurer that issued the polices or contracts.

   (21) "Structured settlement annuity" means an annuitypurchased in order to fund periodic payments for a claimant in payment for orwith respect to personal injuries suffered by the claimant.

   (22) "State" means a state, the District of Columbia, PuertoRico, or a United States possession, territory or protectorate.

   (23) "Supplemental contract" means a written agreemententered into for the distribution of proceeds under a life, health or annuitypolicy or contract.

   (24) "Unallocated annuity contract" means any annuitycontract or group annuity certificate which is not issued to and owned by anindividual, except to the extent of any annuity benefits guaranteed to anindividual by an insurer under the contract or certificate.