§ 27-9-4 - Considerations in making of rates – Cancellation of policy. - Rhode Island Statutes

SECTION 27-9-4

   § 27-9-4  Considerations in making of rates– Cancellation of policy. – (a) All rates shall be made in accordance with the following provisions:

   (1) Due consideration shall be given to past and prospectiveloss experience within and outside this state, to catastrophe hazards, if any,to a reasonable margin for underwriting profit and contingencies, to dividends,savings, or unabsorbed premium deposits allowed or returned by insurers totheir policyholders, members, or subscribers, to past and prospective expensesboth country wide and those specially applicable to this state, and to allother relevant factors within and outside this state; provided, that noconsideration shall be given to:

   (A) Any loss or incident involving a bus driver, while in thecourse of his or her employment for the Rhode Island public transit authorityor private or municipal school bus companies, in establishing or maintainingthat driver's rate respecting the operation of a personal motor vehicle orvehicles;

   (B) Any loss or incident involving a law enforcement officer,while in the course of his or her employment for the state, city, town policedepartments, or federal law enforcement agency, in establishing or maintainingthat driver's rate respecting the operation of a personal motor vehicle orvehicles; and

   (C) Any loss or incident involving a commercial vehicledriver, while in the course of his or her employment, in establishing ormaintaining that driver's rate respecting the operation of a personal motorvehicle(s);

   (ii) It shall be the responsibility of a commercial vehicledriver to provide his or her insurance company with proof that the loss orincident took place in the course of employment while operating a commercialvehicle. For the purposes of this section, a "commercial vehicle" shall be amotor vehicle with a gross weight in excess of ten thousand (10,000) pounds ora motor vehicle used for public livery;

   (2) The systems of expense provisions included in the ratesfor use by any insurer or group insurers may differ from those of otherinsurers or groups of insurers to reflect the requirements of the operatingmethods of any insurer or group with respect to any kind of insurance, or withrespect to any subdivision or combination of insurance for which subdivision orcombination separate expense provisions are applicable;

   (3) Risks may be grouped by classifications for theestablishment of rates and minimum premiums;

   (4) Rates shall not be excessive, inadequate, or unfairlydiscriminatory; and

   (5) In establishing or maintaining an insured's rate orclassification respecting the operation of a personal motor vehicle, anyinsured sixty-five (65) years of age or older, who meets the criteria set forthin this section and has not had any chargeable accidents or moving violationswithin three (3) years preceding the establishment of the rate of insurance orclassification, shall not be penalized solely by reason of their age.

   (b) No insurance company shall fail to renew a privatepassenger automobile policy because of a loss of occurrence only, unless achargeable loss occurrence of one thousand five hundred dollars ($1,500) ormore than two (2) nonchargeable loss occurrences, involving the insured, havetaken place within the annual policy year.

   (c) No insurance company shall fail to renew a privatepassenger automobile policy solely because the insured has attained the age ofsixty-five (65) years or older;

   (2) Whenever the commissioner of insurance shall have reasonto believe that any insurance company has refused to renew a private passengerautomobile policy solely because the applicant has reached the age ofsixty-five (65) years or older, the commissioner shall notify the company thatit may be in violation of this section and in his or her discretion he or shemay require a hearing to determine whether or not the company has actually beenengaged in the practice stated in this subsection. Any hearing held under thissection shall in all respects comply with the hearing procedure provided in theAdministrative Procedures Act, chapter 35 of title 42;

   (3) If after the hearing the commissioner shall determinethat the company has engaged in the practice of systematically failing to renewprivate passenger automobile policies because of the advanced age of theinsured, he or she shall reduce his or her findings to writing and shall issueand cause to be served upon the company an order to cease and desist fromengaging in those practices. After the issuance of the cease and desist order,if the commissioner finds that the company has continued to engage in thosepractices, he or she shall impose upon the company a fine not to exceed theamount of one thousand dollars ($1,000) for each separate violation.

   (4) Any company aggrieved by any order or decision of thecommissioner of insurance may appeal the order and decision to the superiorcourt of Providence in accordance with the Administrative Procedures Act,chapter 35 of title 42.

   (d) No insurance group, carrier or company in establishingany premium surcharge or penalty relative to a specific motor vehicle policy,shall consider any accident or any claim where any insured covered by thatpolicy is fifty percent (50%) or less at fault.

   (e) No insurance group, carrier or company shall assess anypremium surcharge against any insured covered by a motor vehicle policy where aproperty damage claim payment is less than one thousand five hundred dollars($1,500).