§ 27-5-3.8 - Rhode Island commission on hurricane loss projection methodology.
SECTION 27-5-3.8
§ 27-5-3.8 Rhode Island commission onhurricane loss projection methodology. – (1) Reliable projections of hurricane losses are necessary in order to assurethat rates for residential property insurance meet the statutory requirementthat rates be neither excessive nor inadequate.
(2) The general assembly recognizes the need for expertevaluation of computer models and other recently developed or improvedactuarial methodologies for projecting hurricane losses, in order to resolveconflicts among actuarial professionals, and in order to provide both immediateand continuing improvement in the sophistication of actuarial methods used toset rates charged to consumers.
(3) It is the intent of the general assembly to create theRhode Island commission on hurricane loss projection methodology as a panel ofexperts to provide the most actuarially sophisticated guidelines and standardsfor projection of hurricane losses possible, given the current state ofactuarial science.
(1) There is created the Rhode Island commission on hurricaneloss projection methodology. For the purposes of this section, the term"commission" means the Rhode Island commission on hurricane loss projectionmethodology. The commission shall be administratively housed within thedepartment of administration, but it shall independently exercise the powersand duties specified in this section.
(2) The commission shall consist of the following eight (8)members:
(i) The director of business regulation, acting as theadministrator of insurance, or designee;
(ii) The adjutant general of the Rhode Island emergencymanagement agency;
(iii) A member of the board of directors of the Rhode IslandJoint reinsurance Association appointed by the governor;
(iv) Five (5) members directly appointed by the governor, asfollows:
(A) An actuary who is employed full-time by a property andcasualty insurer which was responsible for at least one percent of theaggregate statewide direct written premium for homeowner's insurance in thecalendar year preceding the member's appointment to the commission;
(B) An expert in insurance finance who has a background inactuarial science;
(C) An expert in statistics who has a background in insurance;
(D) An expert in computer system design.
(E) An expert in meteorology who specializes in hurricanes.
(3) Members designated under subparagraphs (b)(2)(i)-(iii)shall serve on the commission as long as they maintain the respective officesdesignated in subparagraphs (b)(2)(i)-(iii). Members under subparagraph(b)(2)(iv)(A)-(E) shall serve for a term of three (3) years, and may bereappointed to the commission. All members may be removed by the governor priorto the expiration of their term, for cause. Vacancies on the commission shallbe filled in the same manner as the original appointment.
(4) The governor shall annually appoint one of the members ofthe commission to serve as chair.
(5) Members of the commission shall serve withoutcompensation, but shall be reimbursed for per diem and travel expenses.
(6) There shall be no liability on the part of, and no causeof action of any nature shall arise against, any member of the commission forany action taken in the performance of their duties under this section. Inaddition, the commission may, in writing, waive any potential cause of actionfor negligence of a consultant, contractor, or contract employee engaged toassist the commission.
(1) The commission shall consider any actuarial methods,principles, standards, models, or output ranges that have the potential forimproving the accuracy of or reliability of the hurricane loss projections usedin residential property insurance rate filings. The commission shall, from timeto time, adopt findings as to the accuracy or reliability of particularmethods, principles, standards, models, or output ranges.
(2) The commission shall adopt revisions to previouslyadopted actuarial methods, principles, standards, models, or output ranges atleast annually.
(3) A trade secret that is used in designing and constructinga hurricane loss model and that is provided pursuant to this section, by aprivate company, to the commission, is confidential and shall not be deemed apublic record pursuant to the provisions of chapter 2 of title 38.
(ii) That portion of a meeting of the commission or of a rateproceeding on an insurer's rate filing at which a trade secret madeconfidential and exempt by this paragraph is discussed shall be deemedconfidential and not open to disclosure pursuant to the open meetings act, butmay be discussed at a closed meeting as provided for in chapter 46 of title 42.
(d) The Rhode Island commission is hereby authorized to forma multi-state commission with the states of Massachusetts, Connecticut and anyother interested state in furtherance of the goals of this act.