R.I. Gen. Laws § 27-34.3-5

Current through 2024 Public Law 457

Section 27-34.3-5 - Definitions

As used in this chapter:

(1) "Account" means either of the two accounts created under § 27-34.3-6.

(2) "Association" means the Rhode Island life and health insurance guaranty association created under § 27-34.3-6.

(3) "Authorized assessment" or the term "authorized" when used in the context of assessments means a resolution by the board of directors has been passed whereby an assessment will be called immediately or in the future from member insurers for a specified amount. An assessment is authorized when the resolution is passed.

(4) "Benefit plan" means a specific employee, union or association of natural persons benefit plan.

(5) "Called assessment" or the term "called" when used in the context of assessments means that a notice has been issued by the association to member insurers requiring that an authorized assessment be paid within the time frame set forth within the notice. An authorized assessment becomes a called assessment when notice is mailed by the association to member insurers.

(6) "Commissioner" means the commissioner of insurance within the department of business regulation of this state.

(7) "Contractual obligation" means any obligation under a policy or contract or certificate under a group policy or contract, or portion of a group policy or contract for which coverage is provided under § 27-34.3-3.

(8) "Covered policy" means any policy or contract or portion of a policy or contract for which coverage is provided under § 27-34.3-3.

(9) "Extra-contractual claims" means claims not arising directly out of contract provisions, including, for example, claims relating to bad faith in the payment of claims, punitive or exemplary damages or attorneys' fees and costs.

(10) "Impaired insurer" means a member insurer which is not an insolvent insurer, and

(i) Is placed under an order of rehabilitation or conservation by a court of competent jurisdiction.

(11) "Insolvent insurer" means a member insurer which after January 1, 1996, is placed under an order of liquidation by a court of competent jurisdiction with a finding of insolvency.

(12) "Member insurer" means any insurer licensed or which holds a certificate of authority to transact in this state any kind of insurance for which coverage is provided under § 27-34.3-3, and includes any insurer whose license or certificate of authority in this state may have been suspended, revoked, not renewed or voluntarily withdrawn, but does not include:

(i) A hospital or medical service organization, whether profit or nonprofit; or

(ii) A health maintenance organization; or

(iii) A fraternal benefit society; or

(iv) A mandatory state pooling plan; or

(v) A mutual assessment company or other person that operates on an assessment basis; or

(vi) An insurance exchange; or

(vii) An organization that has a certificate or license limited to the issuance of charitable gift annuities; or

(viii) An entity similar to any of the above.

(13) "Moody's corporate bond yield average" means the monthly average corporates as published by Moody's investors service, inc., or any successor to it.

(14) "Owner" of a policy or contract and "policy owner" and "contract owner" means the person who is identified as the legal owner under the terms of the policy or contract or who is otherwise vested with legal title to the policy or contract through a valid assignment completed in accordance with the terms of the policy or contract and properly recorded as the owner on the books of the insurer. The terms owner, contract owner and policy owner do not include persons with a mere beneficial interest in a policy or contract.

(15) "Person" means any individual, corporation, limited liability company, partnership, association, governmental body or entity or voluntary organization.

(16) "Plan sponsor" means:

(i) The employer in case of a benefit plan established or maintained by a single employer;

(ii) The employee organization in the case of a benefit plan established or maintained by an employee organization; or

(iii) In the case of a benefit plan established or maintained by two (2) or more employers or jointly by one or more employers and one or more employee organizations, the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the benefit plan.

(17) "Premiums" means amounts or considerations (by whatever name called) received on covered policies or contracts less returned premiums, considerations and deposits, and less dividends and experience credits. "Premiums" does not include any amounts or consideration received for any policies or contracts or for the portions of policies or contracts for which coverage is not provided under § 27-34.3-3(b) except that assessable premium shall not be reduced on account of § 27-34.3-3(b)(2)(iii) relating to interest limitations and § 27-34.3-3(c)(2) relating to limitations with respect to one individual, one participant and one owner. "Premiums" shall not include:

(i) Premiums in excess of five million dollars ($5,000,000) on an unallocated annuity contract not issued under a governmental retirement benefit plan (or its trustee) established under § 401, 403(b) or 457 of the United States Internal Revenue Code, 26 U.S.C. § 401, 403(b) or 457.

(ii) With respect to multiple nongroup policies of life insurance owned by one owner, whether the policy owner is an individual, firm, corporation or other person, and whether the persons insured are officers, managers, employees or other persons, premiums in excess of five million dollars ($5,000,000) with respect to these policies or contracts, regardless of the number of policies or contracts held by the owner.

(18)

(i) "Principal place of business" of a plan sponsor or a person other than a natural person means the single state in which the natural persons who establish policy for the direction, control and coordination of the operations of the entity as a whole primarily exercise that function, determined by the association in its reasonable judgment by considering the following factors:

(A) The state in which the primary executive and administrative headquarters of the entity is located;

(B) The state in which the principal office of the chief executive officer of the entity is located;

(C) The state in which the board of directors (or similar governing person or persons) of the entity conducts the majority of its meetings;

(D) The state in which the executive or management committee of the board of directors (or a similar governing person or persons) of the entity, conducts the majority of its meetings;

(E) The state from which the management of the overall operations of the entity is directed; and

(F) In the case of a benefit plan sponsored by affiliated companies comprising a consolidated corporation, the state in which the holding company or controlling affiliate has its principal place of business as determined using the above factors. However, in the case of a plan sponsor, if more than fifty percent (50%) of the participants in the benefit plan are employed in a single state, that state shall be deemed to be the principal place of business of the plan sponsor.

(ii) The principal place of business of a plan sponsor of a benefit plan described in subsection (16)(iii) of this section shall be deemed to be the principal place of business of the association, committee, joint board of trustees or other similar group of representatives of the parties who establish or maintain the benefit plan that, in lieu of a specific or clear designation of a principal place of business, shall be deemed to be the principal place of business of the employer or employee organization that has the largest investment in the benefit plan in question.

(19) "Receivership court" means the court in the insolvent or impaired insurer's state having jurisdiction over the conservation, rehabilitation or liquidation of the insurer.

(20) "Resident" means a person to whom a contractual obligation is owed and who resides in this state on the date of entry of court order that determines a member insurer to be an impaired insurer or a court order that determines a member insured to be an insolvent insurer, whichever occurs first. A person may be a resident of only one state, which in the case of a person other than a natural person shall be its principal place of business. Citizens of the United States that are either:

(i) residents of foreign countries; or

(ii) residents of United States possessions, territories or protectorates that do not have an association similar to the association created by this chapter, shall be deemed residents of the state of domicile of the insurer that issued the polices or contracts.

(21) "Structured settlement annuity" means an annuity purchased in order to fund periodic payments for a claimant in payment for or with respect to personal injuries suffered by the claimant.

(22) "State" means a state, the District of Columbia, Puerto Rico, or a United States possession, territory or protectorate.

(23) "Supplemental contract" means a written agreement entered into for the distribution of proceeds under a life, health or annuity policy or contract.

(24) "Unallocated annuity contract" means any annuity contract or group annuity certificate which is not issued to and owned by an individual, except to the extent of any annuity benefits guaranteed to an individual by an insurer under the contract or certificate.

R.I. Gen. Laws § 27-34.3-5

P.L. 1995, ch. 114, § 1; P.L. 2002, ch. 292, § 79; P.L. 2004, ch. 39, § 1; P.L. 2004, ch. 44, § 1.