§ 27-34-5 - Definitions. - Rhode Island Statutes

SECTION 27-34-5

   § 27-34-5  Definitions. – As used in this chapter:

   (1) "Account" means any one of the three (3) accounts createdby § 27-34-6;

   (2) "Affiliate" means a person, who directly or indirectly,through one or more intermediaries, controls, is controlled by, or is undercommon control with an insolvent insurer on December 31 of the year nextpreceding the date the insurer becomes an insolvent insurer;

   (3) "Claimant" means any insured making a first party claimor any person instituting a liability claim; provided that no person who is anaffiliate of the insolvent insurer may be a claimant;

   (4) "Commercial lines excess liability insurance" means anycommercial lines liability insurance written over an underlying policy withpolicy limits of at least three hundred thousand dollars ($300,000) or aself-insured retention of at least three hundred thousand dollars ($300,000);

   (5) "Commercial lines insurance" means any insurance to whichthis chapter applies which is not personal lines insurance;

   (6) "Commissioner" means the commissioner of insurance;

   (7) "Control" means the possession, direct or indirect, ofthe power to direct or cause the direction of the management and policies of aperson, whether through the ownership of voting securities, by contract otherthan a commercial contract for goods or nonmanagement services, or otherwise,unless the power is the result of an official position with, or corporateoffice held by, the person. Control shall be presumed to exist if any person,directly or indirectly, owns, controls, holds with the power to vote, or holdsproxies representing, ten percent (10%) or more of the voting securities of anyother person. This presumption may be rebutted by a showing that control doesnot exist in fact;

   (8) "Covered claim" means an unpaid claim, including one forunearned premiums, submitted by a claimant, which arises out of and is withinthe coverage and subject to the applicable limits of an insurance policy towhich this chapter applies issued by an insurer if the insurer becomes aninsolvent insurer and:

   (i) The claimant or insured is a resident of this state atthe time of the insured event; provided, that for entities other than anindividual, the residence of a claimant or insured is the state in which itsprincipal place of business is located at the time of the insured event; or

   (ii) The property from which the claim arises is permanentlylocated in this state. "Covered claim" shall not include any amount:

   (A) Awarded as punitive or exemplary damages;

   (B) Sought as a return of premium under any retrospectiverating plan; or

   (C) Due any reinsurer, insurer, insurance pool, orunderwriting association, as subrogation recoveries or otherwise; provided,that a claim for any amount, asserted against a person insured under a policyissued by an insurer which has become an insolvent insurer, which, if it werenot a claim by or for the benefit of a reinsurer, insurer, insurance pool, orunderwriting association, would be a "covered claim", may be filed directlywith the receiver of the insolvent insurer, but in no event may any the claimbe asserted against the insured of the insurer;

   (9) "Fund" means the Rhode Island insurers' insolvency fundcreated under § 27-34-6;

   (10) "Insolvent insurer" means an insurer licensed totransact in this state any of the kinds of insurance within the scope of thischapter, either at the time the policy was issued or when the insured eventoccurred, against which an order of liquidation with a finding of insolvencyhas been entered by a court of competent jurisdiction in the insurer's state ofdomicile or in this state under the provision(s) of chapter 14.3 of this titlewhich order of liquidation has not been stayed or been the subject of a writ ofsupersedeas or other comparable order;

   (11) "Member insurer" means any person who:

   (i) Writes any kind of insurance to which this chapterapplies, including the exchange of reciprocal or interinsurance contracts; and

   (ii) Is licensed to transact insurance in this state;

   (12) " Net direct written premiums" means direct grosspremiums written in this state on insurance policies to which this chapterapplies, less return premiums on those policies and dividends or unabsorbedpremiums paid or credited to policyholders on the direct business. "Net directwritten premiums" does not include premiums on contracts between insurers orreinsurers;

   (13) "Person" means any individual, corporation, partnership,association, or voluntary organization;

   (14) "Personal lines insurance" means any insurance to whichthis chapter applies issued for personal, family, or household purposes;

   (15) "Pleasure craft" means watercraft, other than a seaplaneon the water or a houseboat, not greater than thirty-five (35) feet in lengthused solely for pleasure and not used for:

   (i) Charter or hire; or

   (ii) To carry persons or property for fee or any commercialuse; and

   (16) "Self-insured retention" means:

   (i) Any fund or other arrangement to pay claims other than byan insurance company; or

   (ii) Any arrangement under which an insurance company has noobligation to pay claims on behalf of an insured if it is not reimbursed by theinsured.