Political ‘Soap Opera’ Reportedly Characterizes 2003 R.I. Legislative Session

The Rhode Island legislature went through a marathon session and officially adjourned during the early morning hours recently,
wrapping up a year of political posturing that resulted in a several gains for the insurance industry.

“This year’s new downsized legislature was a regular soap opera, with twists and turns over who wielded the power,” Gerald Zimmerman, assistant general counsel for the National Association of Independent Insurers (NAII), said. “At the eleventh hour, unposted and previously unseen bills were put to a vote by the increasingly weary lawmakers. Luckily the House and Senate were able to resolve most of their differences.”

Overall, the session was fairly successful for the insurance industry, with several proactive bills passed that the industry had backed for years. The following insurance-related bills became law:

· H.B. 5063 and S.B. 431, which eliminate the requirement that property insurance cancellations be sent by certified mail, return receipt requested, and instead may be mailed with a U.S. Post Office Certificate of Mailing. “This bill will bring Rhode Island law into line with the rest of the country and save insurers the expense associated with certified mail with return receipt requested,” Zimmerman continued.

· H.B. 5091 and S.B. 840, which permit insurers to make property loss
payments for losses under $3,500 directly to the policyholder without naming the mortgagee on the claim checks, making it more convenient for customers to obtain claim payments.

The industry was able to defeat in committee S.B. 838, which would have extended coverage under the Rhode Island Insurers Insolvency Fund for large commercial policyholders and commercial lines excess liability insurance. This bill would have imposed additional costs on the entire insurance industry.

Insurers were split on the issue of S.B. 668, the so-called “vicarious liability bill” which expands liability for car renters. The bill passed both chambers after legislators reached a compromise requiring that the new law sunset in one year.

Bills dealing with auto body shops were also on the agenda this year.

Last year insurers negotiated a compromise with the auto body shops on a bill that would establish standards for the use of generic crash parts. For the most part, this bill incorporates into statute provisions of existing regulation and practice. Last year, this legislation passed both the Senate and the House, but was not transmitted to the governor for enactment due to political reasons unrelated to the merits of the bill. S.B. 0022 and H.B. 6066, the compromise
bill, passed both chambers this session.

The Department of Business Regulation also introduced three bills affecting the insurance industry that have been signed into law by the governor.

They are S.B. 0433 and H.B.6012, which revise the Insurance Premium Finance Agreement Statute; S.B. 0434 and H.B. 6018, which give the DBR the authority to issue cease and desist orders against entities engaged in unlicensed activities; and S.B. 0435 and H.B. 6019, which provide greater reciprocity for granting of nonresident insurance producer licenses.

Trial lawyers were reportedly active in lobbying against the proposal to reform medical malpractice and tort liability (H.B.5782 and S.B. 0339) and were successful in killing both bills.

However, both H.B. 5131, which would have added a decedent’s loss of enjoyment of life as an element of damages in wrongful death cases, and H.B. 5253, a third-party bad faith bill, died in the House Judiciary Committee.