§ 27-53.1-4 - Notice requirements. - Rhode Island Statutes

SECTION 27-53.1-4

   § 27-53.1-4  Notice requirements. –(1) The transferring insurer shall provide or cause to be provided to eachpolicyholder a notice of transfer by first-class mail, addressed to thepolicyholder's last known address or to the address to which premium notices orother policy documents are sent or, with respect to home service business, bypersonal delivery with acknowledged receipt. A notice of transfer shall also besent to the transferring insurer's agents or brokers of record on the affectedpolicies.

   (2) The notice of transfer shall state or provide:

   (i) The date the transfer and novation of the policyholder'scontract of insurance is proposed to take place;

   (ii) The name, address and telephone number of the assumingand transferring insurer;

   (iii) That the policyholder has the right to either consentto or reject the transfer and novation;

   (iv) The procedures and time limit for consenting to orrejecting the transfer and novation;

   (v) A summary of any effect that consenting to or rejectingthe transfer and novation will have on the policyholder's rights;

   (vi) A statement that the assuming insurer is licensed towrite the type of business being assumed in the state where the policyholderresides, or is authorized, as provided in this section, to assume that business;

   (vii) The name and address of the person at the transferringinsurer to whom the policyholder should send its written statement ofacceptance or rejection of the transfer and novation; and

   (viii) The address and phone number of the insurancedepartment where the policyholder resides so that the policyholder may write orcall the insurance department for further information regarding the financialcondition of the assuming insurer;

   (ix) The following financial data for both companies:

   (A) Ratings for the last five (5) years, if available, or forany lesser period as is available from two (2) nationally recognized insurancerating services acceptable to the commissioner including the rating service'sexplanation of the meaning of the ratings. If ratings are unavailable for anyyear of the five (5) year period, this shall also be disclosed;

   (B) A balance sheet as of December 31 for the previous three(3) years, if available, or for any lesser period as is available and as of thedate of the most recent quarterly statement;

   (C) A copy of the management's discussion and analysis thatwas filed as a supplement to the previous year's annual statement; and

   (D) An explanation of the reason for the transfer.

   (3) Notice in a form identical or substantially similar to§ 27-53.1-8 shall be deemed to comply with the requirements of subdivision(a)(2).

   (4) The notice of transfer shall include a pre-addressed,postage-paid response card, which a policyholder may return as its writtenstatement of acceptance or rejection of the transfer and novation.

   (5) The notice of transfer shall be filed as part of theprior approval requirement set forth in subdivision (b)(1).

   (1) Prior approval by the commissioner is required for anytransaction where an insurer domiciled in this state assumes or transfersobligations and/or risks on contracts of insurance under an assumptionreinsurance agreement. No insurer licensed in this state shall transferobligations and/or risks on contracts of insurance issued to or owned byresidents of this state to any insurer that is not licensed in this state. Aninsurer domiciled in this state shall not assume obligations and/or risks oncontracts of insurance issued to or owned by policyholders residing in anyother state unless it is licensed in the other state, or the insuranceregulatory of that state has approved the assumption.

   (2) Any licensed foreign insurer that enters into anassumption reinsurance agreement which transfers the obligations and/or riskson contracts of insurance issued to or owned by residents of this state, shallfile or cause to be filed with the commissioner of insurance of this state theassumption certificate, a copy of the notice of transfer and an affidavit thatthe transaction is subject to substantially similar requirements in the stateof domicile of both the transferring and assuming insurer. If no suchrequirements exist in the domicile of either the transferring or assuminginsurers, then the requirements of subdivision (b)(3) shall apply.

   (3) Any licensed foreign insurer that enters into anassumption reinsurance agreement which transfers the obligations and/or riskson contracts of insurance issued to or owned by residents of this state, shallobtain prior approval of the commissioner of insurance of this state and besubject to all other requirements of this chapter with respect to residents ofthis state, unless the transferring and assuming insurers are subject toassumption reinsurance requirements adopted by statute or regulation in thejurisdiction of their domicile which are substantially similar to thosecontained in this section.

   (4) The following factors, along with any other factors thatthe commissioner deems appropriate under the circumstances, shall be consideredby the commissioner in reviewing a request for approval:

   (i) The financial condition of the transferring and assuminginsurers and the effect the transaction will have on the financial condition ofeach company;

   (ii) The competence, experience and integrity of thosepersons who control the operation of the assuming insurer;

   (iii) The plans or proposals the assuming party has withrespect to the administration of the policies subject to the proposed transfer;

   (iv) Whether the transfer is fair and reasonable to thepolicy-holders of both companies; and

   (v) Whether the notice of transfer to be provided by theinsurer is fair, adequate and not misleading.