§ 27-4.8-3 - Notice of compensation. - Rhode Island Statutes

SECTION 27-4.8-3

   § 27-4.8-3  Notice of compensation. –(a) With respect to a program of insurance which, if issued on a group basis,would not qualify under section 27-4.8-1 of this act, the insurer shall causeto be distributed to prospective insureds a written notice that compensationwill or may be paid, if compensation of any kind will or may be paid to:

   (1) A policyholder or sponsoring or endorsing entity in thecase of a group policy; or

   (2) A sponsoring or endorsing entity in the case ofindividual, blanket or franchise policies marketed by means of direct responsesolicitation.

   (b) The notice shall be distributed:

   (1) Whether compensation is direct or indirect; and

   (2) Whether the compensation is paid to or retained by thepolicyholder or sponsoring or endorsing entity, or paid to or retained by athird-party at the direction of the policyholder or sponsoring or endorsingentity, or an entity affiliated therewith by way of ownership, contract oremployment.

   (c) The notice required by this section shall be placed on oraccompany an application or enrollment form provided to prospective insureds.

   (d) The following terms shall have the meanings indicated:

   (1) "Direct response solicitation" means a solicitationthrough a sponsoring or endorsing entity through the mails, telephone or othermass communications media;

   (2) "Sponsoring or endorsing entity" means an organizationthat has arranged for the offering of a program of insurance in a manner thatcommunicates that eligibility for participation in the program is dependentupon affiliation with the organization or that it encourages participation inthe program.