Source: https://ribit.rofreg.com/legislations/4462
Timestamp: 2019-11-12 23:30:41
Document Index: 242669458

Matched Legal Cases: ['§ 27', '§ 27', '§ 27', '§ 27', '§ 27', '§ 27']

House Bill #8163 (2018)
AN ACT RELATING TO INSURANCE -- VOLUNTARY RESTRUCTURING OF SOLVENT INSURERS
2018-05-04: Introduced, referred to House Corporations
2018-05-08: Committee recommended measure be held for further study
2018-06-23: Referred to Senate Judiciary
2018 – H 8163
2018 – H 8163 SUBSTITUTE A
LC005595
LC005595/SUB A
RELATING TO INSURANCE – VOLUNTARY RESTRUCTURING OF SOLVENT
Introduced By: Representatives Jacquard, Vella-Wilkinson, Messier, and Morin
SECTION 1. Sections 27-14.5-1, 27-14.5-3, 27-14.5-4 and 27-14.5-6 of the General Laws in Chapter 27-14.5 entitled "Voluntary Restructuring of Solvent Insurers" are hereby amended to read as follows:
27-14.5-1. Definitions.
(1) "Applicant" means a commercialrun-off insurer applying under § 27-14.5-4.
(2) "Assessment deficit" means the amount that the assessment for the previous year under § 27-14.5-5 is less than, and "assessment surplus"is the amount that the assessment for the previous year exceeds:
(ii) If any policy subject to the agreement is protected through a guarantee association, then the assuming insurer must have been and be licensed, and must have been and be a member of the guarantee association, in all states known to the applicant in which either:(A) any property covered under the policy has a permanent situs; or (B) the policyholder resided while the policy was in force.
(i) A run-off insurer domiciled in Rhode Island whose business, excluding all business subject to an assumption reinsurance agreement, includes only the reinsuring of any line(s) of business other than life and/or the insuring of any line(s) of business other than life, workers' compensation, and personallines insurance; or
(ii) A Rhode Island domestic insurance company meeting the requirements of subsection (i) hereof and formed or re-activated for the sole purpose of entering into a voluntary restructuring under this chapter and whose liabilities consist of commercial liabilities transferred to said company with the approval of the commissioners commissioner and pursuant to the regulations issued by the department under this chapter. The amount of the commercial liabilities transferred must be less than or equal to the amount of assets transferred to the newly formed or re-activated company.
(i) A run-off insurer domiciled in Rhode Island, or the protected cell of such insurer, whose business, excluding all business subject to an assumption reinsurance agreement, includes only the reinsuring of any line(s) of business other than life and/or the insuring of any line(s) of business other than life, workers' compensation, and personal lines insurance; or
(ii) A Rhode Island domestic insurance company, or the protected cell of such insurer, meeting the requirements of subsection (i) hereof and formed or re-activated for the sole purpose of entering into a voluntary restructuring under this chapter and whose liabilities consist of commercial liabilities transferred to said company with the approval of the commissioners commissioner and pursuant to the regulations issued by the department under this chapter. The amount of the commercial liabilities transferred must be less than or equal to the amount of assets transferred to the newly formed or re-activated company.
(12) "Implementation order"means an order under § 27-14.5-4(c).
LC005595 - Page 2of 9
(22) "Voluntary restructuring" means the act of reorganizing the legal ownership, operational, governance, or other structures of a solvent insurer, for the purpose of enhancing organization and maximizing efficiencies, and shall include the transfer of assets and liabilities to
LC005595 - Page 3of 9 or from an insurer, or the protected cell of an insurer pursuant to an insurance business transfer plan. A voluntary restructuring under this chapter may be approved by the commissioner only if, in the commissioner's opinion, it would have no material adverse impact on the insurer's policyholders, reinsureds, or claimants of policies subject to the restructuring.
(22) "Voluntary restructuring" means the act of reorganizing the legal ownership, operational, governance, or other structures of a solvent insurer, for the purpose of enhancing organization and maximizing efficiencies, and shall include the transfer of assets and liabilities to or from an insurer, or the protected cell of an insurer pursuant to an insurance business transfer plan. A voluntary restructuring under this chapter may be approved by the commissioner only if, in the commissioner's opinion, it would have no material adverse impact on the insurer's policyholders, reinsureds, or claimants of policies subject to the restructuring.
27-14.5-3. Notice.
(a) Wherever in this chapter notice is required, the applicant shall, within ten (10) days of the event triggering the requirement, cause transmittalof the notice:
(a) Wherever in this chapter notice is required, the applicant shall, within ten (10) days of the event triggering the requirement, cause transmittal of the notice:
(1) By first class mail and facsimile to To the insurance regulator in each jurisdiction in which the applicant is doing business;
(2) By first class mail to To the national conference of insurance guaranty funds and all guaranty associations for the states in which the applicant is doing business;
(3) Pursuant To all reinsurers of the applicant pursuant to the notice provisions of reinsurance agreements or, where an agreement has no provision for notice, by first class mail in a manner reasonably designed to provide actual notice to all reinsures reinsurers of the applicant;
(4) By first class mail to To all insurance agents or insurance producers of the applicant;
(5) By first class mail to To all persons known or reasonably expected to have claims against the applicant including all policyholders, at their last known address as indicated by the records of the applicant;
(6) By first class mail to To federal, state, and local government agencies and instrumentalities as their interests may arise; and
(7) By publication in a newspaper of general circulation in the state in which the applicant has its principal place of business and in any other locations that the court overseeing the proceeding deems appropriate.
(b) Notice under this section shall be given in a manner designed to provide actualnotice to the intended recipient. Depending upon the circumstances, that notice may take the form of first class mail, facsimile and/or electronic notice.
(b) Notice under this section shall be given in a manner designed to provide actual notice to the intended recipient. Depending upon the circumstances, that notice may take the form of first class mail, facsimile and/or electronic notice.
(b)(c) If notice is given in accordance with this section, any orders under this chapter shall be conclusive with respect to all claimants and policyholders, whether or not they received notice.
(c)(d) Where this chapter requires that the applicant provide notice but the commissioner has been named receiver of the applicant, the commissioner shall provide the required notice.
27-14.5-4. Commutation plans.
LC005595 - Page 4of 9
(3) All creditors, assumption policyholders, reinsurers, and guaranty associations shall be provided with access to the same information relating to the proposed plan and shallbe given the opportunity to file comments or objections with the court.
LC005595 - Page 5of 9
(2) The court shallthen enter an order that:
(ii) Transfers those liabilities subject to an assumption reinsurance agreement to the assumption reinsurer, thereby notating novating the original policy by substituting the assumption reinsurer for the applicant and releasing the applicant of any liability relating to the transferred liabilities;
LC005595 - Page 6of 9
(f) Reinsurance. Nothing in this chapter shallbe construed as authorizing the applicant, or any other entity, to compel payment from a reinsurer on the basis of estimated incurred but not reported losses or loss expenses, or case reserves for unpaid losses and loss expenses.
(1) The commissioner and guaranty funds shall have the right to intervene in any and all proceedings under this section; provided, that notwithstanding any provision of title 27, any action taken by a commercial run-off insurer to restructure pursuant to chapter 14.5, including the formation or re-activation of an insurance company for the sole purpose of entering into a voluntary restructuring shall not affect the guaranty fund coverage existing on the business of such commercialrun-off insurer prior to the taking of such action.
(3) If no implementation order has been entered, then upon being named receiver, the commissioner may request, and if requested, the court shall order, that the proceeding under this chapter be converted to a rehabilitation or liquidation pursuant to chapter 14.3 of this title. If an implementation order has already been entered, then the court may order a conversion upon a showing that some materialfactor in approving the original order has changed.
27-14.5-6. Rules and regulations.
The commissioner shall promulgate rules and regulations that may be necessary to effectuate the purposes of this chapter no later than January 1, 2003. The department shall not
LC005595 - Page 7of 9 accept applications under § 27-14.5-4 until the time that these regulations have been promulgated including, but not limited to, procedures for transferring commercial liabilities to a new or existing domestic insurer and standards for commutation plans.
SECTION 2. Chapter 27-14.5 of the General Laws entitled "Voluntary Restructuring of Solvent Insurers"is hereby amended by adding thereto the following section:
The commissioner shall promulgate rules and regulations that may be necessary to effectuate the purposes of this chapter no later than January 1, 2003. The department shall not accept applications under § 27-14.5-4 until the time that these regulations have been promulgated including, but not limited to, procedures for transferring commercial liabilities to a new or existing domestic insurer and standards for commutation plans.
SECTION 2. Chapter 27-14.5 of the General Laws entitled "Voluntary Restructuring of Solvent Insurers" is hereby amended by adding thereto the following section:
27-14.5-4.1. Insurance business transfer plans.
The commissioner shall promulgate rules and regulations establishing standards by which liabilities may be novated to a new or existing domestic insurer pursuant to an Insurance Business Transfer Plan.
SECTION 3. Section 27-64-2 of the General Laws in Chapter 27-64 entitled "The Protected CellCompanies Act"is hereby amended to read as follows:
SECTION 3. Section 27-64-2 of the General Laws in Chapter 27-64 entitled "The Protected Cell Companies Act" is hereby amended to read as follows:
27-64-2. Purpose.
This act is adopted to provide a basis for the creation of protected cells by a domestic insurer as one means of accessing alternative sources of capital and achieving the benefits of insurance securitization or voluntary restructuring as contemplated under chapter 14.5 of this title, including through effectuating insurance business transfers in accordance with the procedures promulgated by the commissioner under § 27-14.5-6. Investors in fully funded insurance securitization transactions provide funds that are available to pay the insurer's insurance obligations or to repay the investors or both. The creation of protected cells is intended to be a means to achieve more efficiencies in conducting insurance securitizations or voluntary restructurings.
LC005595 - Page 8of 9
This act would allow domestic insurance company to enter into a voluntary restructuring, including the use of a protected cell, with the approval of the commissioner. It would also allow various notices to be given electronically, and for the insurance commissioner to promulgate rules and regulations to effectuate the purposes of the act.
This act would take effect upon passage. ======== LC005595 ========
LC005595 - Page 9of 9
This act would take effect upon passage. ======== LC005595/SUB A ========
June 19, 2018 at 8:06pm
June 23, 2018 at 10:14pm