Rhode Island's insurance law is Title 27 of the Rhode Island General Laws. Its main parts are:

• The Producer Licensing Act, chapter 27-2.4.
• The Unfair Competition and Practices Act, chapter 27-29.
• The Unfair Claims Settlement Practices Act, chapter 27-9.1.

Details come from the Department of Business Regulation (DBR) regulations in 230-RICR-20. Rhode Island splits regulation in an unusual way: the Director of Business Regulation, through a Superintendent of Insurance, regulates insurers and producers, while a separate Health Insurance Commissioner enforces the law for health insurers. This guide covers the Rhode Island rules with citations. General concepts (insurer types, agency law, federal law) are in the national Insurance Regulation guide.

About the exam

Rhode Island's exams are delivered by Pearson VUE and scored on a scaled score of 70 to pass. Rhode Island does not offer combined exams. Candidates take Life (01) and Accident and Health (02) separately, and Property (03) and Casualty (04) separately.

From the licensing law:

• The exam tests the lines applied for, a producer's duties, and Rhode Island insurance law (27-2.4-7(a)).
• A candidate who fails or misses the exam must reapply and pay all fees again (27-2.4-7(d)).
• There is no prelicensing course. The mandatory prelicensing chapter (27-3.1) was repealed.

The regulators

Department of Business Regulation

• The DBR, through its Insurance Division, licenses producers and regulates insurers (42-14-1).
• The Director of Business Regulation is appointed by the Governor and serves at the governor's pleasure (42-6-2).
• Within DBR, insurance functions are run by the Superintendent of Insurance (42-14-5(a)).
• In the Producer Licensing Act, "insurance commissioner" means the Director or the Director's designee (27-2.4-2(5)).

Office of the Health Insurance Commissioner (OHIC)

• Located within DBR (42-14.5-1).
• The Health Insurance Commissioner is appointed by the Governor with the Senate's advice and consent.
• OHIC has sole jurisdiction to enforce the insurance laws as they relate to health insurance, except producer licensing and appointments, which stay with DBR (42-14-5(d)).

The Director's powers

• Subpoenas: the Director may issue subpoenas, including subpoenas duces tecum for records. False testimony at a DBR hearing is perjury (42-14-11).
• Penalties: an administrative penalty of $100 to $50,000 for a Title 27 violation, in addition to or instead of license action (42-14-16).
• Cease and desist against unlicensed persons: a show-cause hearing is held 10 to 20 days after the order (42-14-16.1).
• Examinations:
  • Insurers may be examined at any time, at the insurer's expense (27-13-1).
  • The insurer must answer a verified exam report within 30 days (27-13.1-5).
  • During a market conduct exam, document requests are answered within 5 working days (230-RICR-20-60-4).

Insurers

• An alien insurer is organized under the laws of a country other than the United States (27-59-1).
• Foreign insurers must comply with chapter 27-2 before insuring Rhode Island residents (27-2-1).
  • Acting as a producer for a noncomplying insurer brings a $300-$1,000 fine.
  • A contract issued by an unlicensed foreign insurer is valid, but the insurer can't sue on it in Rhode Island (27-2-20).
  • If a foreign insurer is found insolvent, its license and its producers' licenses are revoked or suspended (27-2-24).
• A new domestic stock insurer needs $1 million of capital and $2 million of surplus before starting business (27-1-37).
• Premium tax: 2% of gross premiums (44-17-1).
• Fraternal benefit societies must hold lodge meetings at least monthly. They may pay commissions only to licensed producers and are subject to the unfair trade practices laws (27-25).

Producer licensing (chapter 27-2.4)

Lines of authority (27-2.4-9(a))

• Life.
• Accident and health or sickness.
• Property (direct or consequential loss to property).
• Casualty (legal liability).
• Variable life and variable annuity (which also needs securities registration).
• Personal lines (property and casualty sold to individuals and families for noncommercial purposes).

Definitions

• Negotiate means conferring directly with a buyer about a contract's benefits, terms or conditions (27-2.4-2(14)).
• Solicit means urging someone to apply for a particular kind of insurance from a particular company (27-2.4-2(18)).
• A license alone creates no authority to bind an insurer (27-2.4-2(8)).

Who doesn't need a license (27-2.4-5)

• Insurer employees who only adjust claims and earn no commission.
• Employer benefits staff enrolling their own employees without insurer compensation.
• Rental car companies offering optional insurance on rentals of 60 days or less.

Getting licensed

• Resident applicants must be at least 18 (27-2.4-8).
• A business entity designates a licensed producer responsible for its compliance.
• Nonresidents need good standing at home and reciprocity (27-2.4-10).
• Moving to Rhode Island: apply within 90 days of establishing residence. No exam is needed for lines already held, but the applicant certifies knowledge of Rhode Island law (27-2.4-11).
• Moving out: file the change of address and certification from the new state within 30 days.
• Temporary license: up to 180 days, no exam. It can go to a surviving spouse, or to the designee of a producer entering military service. A sponsor may be required (27-2.4-13).
• Assumed names: notify the commissioner before using one (27-2.4-12).

Keeping the license

• Licenses run 2 years (230-RICR-20-50-5.4) and stay in force while fees are paid and CE is met.
• Late renewal: reinstate within 12 months of the due date without an exam, paying double the unpaid renewal fee (27-2.4-9(c)). A military service waiver is available.
• Name or address changes: report within 30 days (27-2.4-9(f)).
• Reporting actions (27-2.4-18):
  • An administrative action elsewhere: within 30 days of final disposition.
  • A criminal prosecution: within 30 days of the initial pretrial hearing date.
• Errors and omissions coverage: resident producers must carry at least $250,000 per claim and $500,000 aggregate. Producers employed directly by insurers are exempt (27-2.4-23).

Continuing education (chapter 27-3.2; 230-RICR-20-50-2)

• 24 hours each biennial license period, including 3 hours of ethics.
• Carry-forward: up to 12 excess credits, which count as general credits. Ethics must be earned fresh each cycle.
• Exempt:
  • Residents continuously licensed 25 years who are 55 at renewal.
  • Travel or car-rental-only licensees.
  • Nonresidents who meet a reciprocal home state's CE.
• Instructors earn the same credit as students.
• The producer bears the burden of proof of compliance.
• The Director may extend the deadline for good cause, generally up to 1 year.

Appointments, compensation and termination

Appointments (27-2.4-14.1)

• A producer must be appointed before acting as an insurer's agent. A broker not acting for an insurer needn't be.
• The insurer files the appointment within 15 days of the first application.
• Appointments renew each year by January 31 (230-RICR-20-50-5.7).

Commissions (27-2.4-15)

• Commissions are paid only to properly licensed persons.
• Renewal commissions may go to someone licensed at the time of sale.

Compensation disclosure (27-2.4-15.1)

• A producer who charges the customer a fee and also takes insurer compensation must get the customer's documented acknowledgment and explain how the compensation is calculated, before the purchase. Residual market placements are exempt.
• A commission-only producer discloses the commission and any performance-based pay at the sale or by delivery.

Premiums (27-2.4-19)

• Producers hold premiums as fiduciaries. A separate account isn't required if the funds are readily identifiable in the books.
• Converting premiums is theft.

Terminations (27-2.4-16)

• For a for-cause termination, the insurer sends the producer a copy of its notice within 15 days by certified mail or overnight carrier.
• The producer may comment within 30 days.
• The insurer is immune absent actual malice.

Ending a producer's contract

• Non-employee producers: an insurer gives at least 180 days' notice before canceling or changing the contract (27-2.4-20).
• Independent P&C producers who place business with more than one company: the insurer gives 14 months' notice and keeps renewing qualifying policies for 14 months at the same compensation (27-2.4-20.1).

Discipline and penalties

Grounds (27-2.4-14(a)) include:

• A felony conviction.
• Knowingly accepting business from unlicensed people.
• Failing to obey child support orders or pay state income tax.

Procedure

• After a denial or nonrenewal, demand a hearing within 30 days (27-2.4-14(b)).
• Authority continues after a license lapses or is surrendered (27-2.4-14(d)).

Penalties

• Acting without a license is a misdemeanor: up to $1,000 and/or 1 year (27-2.4-6).
• A license revoked for life insurance misrepresentation generally can't be reinstated for 3 years (27-4-5).

Unfair Competition and Practices Act (chapter 27-29)

Prohibited practices (27-29-4) include:

• Misrepresentation, including misquoting rates to induce a lapse.
• False advertising.
• Defamation.
• Boycott, coercion and intimidation.
• False statements on applications to earn a commission.
• Steering repairs: requiring auto repairs or glass work at a particular shop (27-29-4(15)-(16)).

Rebating (27-29-4(8)) is prohibited, with exceptions:

• Value-added services that relate to the coverage and reduce the risk of loss, such as a water-leak sensor.
• Reasonable non-cash gifts not conditioned on a purchase.
• Drawings with free entry.
• Advertising insurance as "free" is prohibited.
• Casualty rebating under 27-8-7 carries up to $500 and/or 1 year. Commissions may be shared with another licensed producer.

Unfair discrimination (27-29-4(7)) includes treating people differently because of:

• Sex or marital status.
• Physical impairment.
• A home's age or geographic location, unless there is a non-pretextual business reason.
• Domestic partnership status, in casualty, homeowners and auto rates.

Refusing homeowners coverage on an owner-occupied home solely because of its area brings a $500 fine per violation (27-29-4.1-4.2). Canceling or surcharging P&C coverage because the insured is a victim of domestic abuse is prohibited (27-60.1-5).

Lenders (27-29-4(9))

• A borrower may choose the producer and insurer.
• A lender can't charge a fee to substitute another insurer's policy.

Complaints

• Insurers keep a complaint register for the current year plus four prior years. A complaint is any written communication primarily expressing a grievance (27-29-4(13)).

Enforcement (27-29-5 to 27-29-9)

• The hearing is set at least 10 days after service.
• Penalties: up to $5,000 per violation (maximum $100,000), or $25,000 (maximum $250,000) if flagrant.
• Violating a final order: up to $25,000, or $250,000 if willful.
• Court review: petition in Providence County superior court within 20 days.
• The chapter creates no private right to sue.

Claims practices

• An act listed in chapter 27-9.1 is a violation if flagrant or frequent enough to be a general business practice. Penalties run up to $10,000 per violation (maximum $100,000), or $25,000 (maximum $250,000) if flagrant (27-9.1-6).
• Property and casualty claims (230-RICR-20-40-2):
  • Acknowledge in 15 days.
  • Answer the Department in 21 days.
  • Accept or deny within 21 days of proof of loss, with status letters every 45 days.
  • Give 60 days' warning of an expiring statute of limitations.
  • Tell an objecting claimant that the Division may review the matter.
• Life and health claims (230-RICR-20-40-1):
  • Claim forms within 15 days.
  • Pay within 30 days once liability is affirmed.
  • Explain in writing if unresolved after 30 days, with updates every 45 days.
• Health plan prompt-pay rules are in the Rhode Island Medical Plans guide.

Fraud, records and privacy

Fraud

• Applications and claim forms carry a fraud warning (27-29-13.3).
• A false statement to support a claim is treated as larceny (11-41-29). A false statement on an application is a misdemeanor.
• Insurance Fraud Prevention Act (27-54):
  • Civil penalties up to $50,000 per violation, or the damages caused if greater.
  • Insurer officers report withheld material information within 10 days.
• Good-faith reports of fraud are immune from liability (27-63-1).

Records (230-RICR-20-60-4)

• Producers keep each policy file for the current year plus four years.
• P&C insurers keep claim files for the year the claim closes plus four years.

Privacy (230-RICR-20-60-7)

• Initial privacy notice by the time the relationship begins, then annually.
• 30 days to opt out is a reasonable opportunity.
• Health information authorizations last up to 24 months.
• Policy numbers can't be shared for telemarketing.
• No discrimination against people who opt out.

Guaranty associations

Rhode Island Life and Health Insurance Guaranty Association (chapter 27-34.3)

• Not covered: Medicare Part C and D benefits, and variable values where the owner bears the risk.
• A summary document must be delivered with policies, and the Association can't be used to make sales (27-34.3-19).

Rhode Island Property and Casualty Insurance Guaranty Association (chapter 27-34, formerly the Insurers' Insolvency Fund)

• Workers' compensation paid in full.
• Unearned premium up to $10,000.
• Other claims up to $500,000 per claimant (insolvencies from 2008).
• A $1,000,000 per-occurrence first-party property limit for insolvencies after January 1, 2026.
• Claims must arise within 60 days after liquidation.
• Title insurance and surety bonds are excluded.
• Assessments are capped at 2% a year.

Surplus lines (27-3-38 to 27-3-42)

• A surplus lines license requires a P&C producer license.
• The broker and insured sign affidavits that at least three admitted insurers declined. Private flood placements don't need them, and the FAIR Plan doesn't count as an admitted insurer.
• Tax: 4%. The annual report is due April 1.
• Eligible insurers need capital and surplus of at least the greater of the state minimum or $15 million.

Common exam traps

• Two regulators. DBR (the Director and the Superintendent of Insurance) licenses producers and regulates insurers. The Health Insurance Commissioner enforces health insurance law but not producer licensing.
• No combined exams in Rhode Island, and no prelicensing course.
• CE: 24 hours including 3 ethics. Up to 12 credits carry forward, as general credits. The age 55 plus 25 years exemption.
• E&O required: $250,000/$500,000.
• Appointments: 15 days, renewed by January 31.
• P&C claims: acknowledge in 15 days; decide within 21 days of proof of loss.
• P&C guaranty: $500,000 per claimant; workers' comp in full.