§ 27-53.1-5 - Policyholder rights. - Rhode Island Statutes

SECTION 27-53.1-5

   § 27-53.1-5  Policyholder rights. –(a) Policyholders shall have the right to reject the transfer and novation oftheir contracts of insurance. Policyholders electing to reject the assumptiontransaction shall return to the transferring insurer the pre-addressed,postage-paid response card or other written notice and indicate on it that theassumption is rejected (collectively referred to as the "Response Card").

   (b) Payment of any premium to the assuming company during thetwenty-four (24) month period after notice is received shall be deemed toindicate the policyholder's acceptance of the transfer to the assuming insurerand a novation shall be deemed to have been effected, provided that the premiumnotice clearly states that payment of the premium to the assuming insurer shallconstitute acceptance of the transfer. The premium notice shall also provide amethod for the policyholder to pay the premium while reserving the right toreject the transfer. With respect to any home service business or any otherbusiness not using premium notices, the disclosures and procedural requirementsof this subsection are to be set forth in the notice of transfer required by§ 27-53.1-4 and in the assumption certificate.

   (c) After no fewer than twenty-four (24) months from themailing of the initial notice of transfer required under § 27-53.1-4(a),if positive consent to, or rejection of, the transfer and assumption has notbeen received or consent has not been deemed to have occurred under subsection(b), the transferring company shall send to the policyholder a second and finalnotice of transfer as specified in § 27-53.1-4(a). If the policyholderdoes not accept or reject the transfer during the one month period immediatelyfollowing the date on which the transferring insurer mails the second and finalnotice of transfer, the policyholder's consent will be deemed to have occurredand novation of the contract will be effected. With respect to the home servicebusiness, or any other business not using premium notices, the twenty-four (24)and one month periods shall be measured from the date of delivery of the noticeof transfer pursuant to § 27-53.1-4(a)(1).

   (d) The transferring insurer will be deemed to have receivedthe response card on the date it is postmarked. A policyholder may also sendits response card by facsimile or other electronic transmission or byregistered mail, express delivery or courier service, in which case theresponse card shall be deemed to have been received by the assuming insurer onthe date of actual receipt by the transferring insurer.