§ 42-14.1-1 - Finding required.
SECTION 42-14.1-1
§ 42-14.1-1 Finding required. – Upon a finding by the director of business regulation that a competitive,stable market for medical malpractice insurance is lacking in the state ofRhode Island and that as a consequence thereof, there is peril to the publichealth, safety, and welfare of the people of the state of Rhode Island, thedirector is authorized to promulgate a regulation addressed to the solution ofthe problem which may encompass among others, the following provisions:
(a) Creation of a joint underwriting association consistingof all insurers authorized to write, within this state on a direct basis,personal injury liability insurance as defined in § 27-9-2, includinginsurers covering these perils in multiple peril package policies. Everyinsurer shall be a member of the association and shall remain a member as acondition of its authority to continue to transact these kinds of insurance inthis state.
(b) To effectuate the purpose of the association which is toprovide a market for medical malpractice insurance on a self-supporting basis,the association shall be authorized to issue policies of medical malpracticeand incidental liability insurance to physicians, hospitals, and other healthcare providers, but need not be the exclusive agency through which thisinsurance may be written on a primary basis in this state.
(c) Policies issued by the association shall be subject to agroup retrospective rating plan to be approved by the director of businessregulation and shall be calculated to be self-supporting.
(d) The creation and administration of a stabilizationreserve fund and initial policyholder contribution to the fund. The purpose ofthe fund shall be the discharge when due of any retrospective premium chargespayable by policyholders of the association under the group retrospectiverating plan authorized by regulation. Any monies remaining in the fund afterall retrospective premium charges have been paid shall be returned topolicyholders.
(e) Upon certification by the association to the directorthat the estimated amount of any deficit remaining after the stabilizationreserve fund has been exhausted in payment of the maximum final premium for allpolicyholders of the association, the director shall authorize members of theassociation to commence recoupment by one of the following procedures:
(1) Applying a surcharge to be determined by the associationat a rate not to exceed one percent (1%) of the annual premiums on futurepolicies affording those kinds of insurance which form the basis for theirparticipation in the association, under procedures established by theassociation; or
(2) Deducting their share of the deficit from past or futuretaxes due the state of Rhode Island.
(f) Organization of a plan of operation, use of policieswritten on a "claim made" or "occurrence" basis, participation of members ofthe association and all other powers necessary to effectuate the purposes ofthe regulation.
(g) Any joint underwriting association created pursuant tothe authority granted in this chapter shall be exempt from taxation on grosspremiums and stabilization reserve funds received for medical malpracticeinsurance as provided for in § 44-17-1. This provision shall be appliedretroactively to June 16, 1975, but in no way shall allow an exemption fromtaxation for premiums received other than for medical malpractice insurance.
(h) Any joint underwriting association created pursuant tothe authority granted in this chapter (including the related stabilizationreserve fund) shall be an integral part of the state government, and itsactivities shall constitute the performance of an essential governmentalfunction of the state of Rhode Island. This subdivision shall be appliedretroactively to June 16, 1975.