Rhode Island Department of Business Regulation (DBR)

The Rhode Island Department of Business Regulation (DBR) is a multi-function state agency responsible for regulating several industries in Rhode Island, including insurance, banking, securities, and commercial licensing. The Insurance Division within DBR oversees all insurance activities in the state.

Department Structure

Department of Business Regulation

The DBR regulates multiple industries under one umbrella agency:

DBR Functions:

• Insurance Division - Property & Casualty, Life & Health insurance regulation
• Banking Division - Banks, credit unions, loan servicers
• Securities Division - Investment advisers, broker-dealers
• Commercial Licensing Division - Various business licenses
• Board of Accountancy - CPA regulation

DBR Director:

• Appointed by the Governor of Rhode Island
• Oversees all divisions within DBR
• Reports directly to the Governor
• Appoints the Superintendent of Insurance

Insurance Division

The Insurance Division is the specific unit within DBR that regulates insurance:

Insurance Division Leadership:

• Superintendent of Insurance leads the division
• Appointed by the DBR Director
• Serves at the pleasure of the Director (no fixed term)
• Chief insurance regulator for Rhode Island

Exam Tip: Rhode Island has a two-tier structure: the DBR Director (appointed by Governor) appoints the Superintendent of Insurance. The Superintendent runs the Insurance Division within the larger DBR.

Superintendent of Insurance

The Superintendent of Insurance is Rhode Island's chief insurance regulator.

Appointment and Authority

Selection Process:

• Appointed by the DBR Director
• No Senate confirmation required
• Serves at the pleasure of the Director
• No fixed term

Superintendent Powers:

Superintendent Responsibilities

Producer Regulation:

• Review and approve producer license applications
• Investigate complaints against producers
• Conduct market conduct examinations
• Discipline producers for violations
• Approve continuing education courses

Insurer Regulation:

• Examine insurer financial statements
• Review rate filings
• Approve policy forms
• Monitor solvency and capital requirements
• Approve mergers and acquisitions

Consumer Protection:

• Investigate consumer complaints
• Educate consumers about insurance
• Enforce unfair trade practice laws
• Provide dispute resolution services
• Ensure fair treatment of policyholders

Rhode Island Insurance Law

Title 27 - Rhode Island General Laws

Rhode Island insurance law is codified in Title 27 of the Rhode Island General Laws (R.I. Gen. Laws).

Title 27 Coverage:

1. Chapter 1 - General Provisions
2. Chapter 2 - Insurance Companies
3. Chapter 2.4 - Producer Licensing
4. Chapter 2.5 - Continuing Education
5. Chapter 9 - Unfair Competition and Practices
6. Chapter 18 - Fire and Marine Insurance Contracts
7. Chapter 20 - Casualty Insurance Contracts
8. Chapter 29 - Unfair Claim Settlement Practices Act
9. Chapter 30 - Financial Responsibility - Motor Vehicles
10. Chapter 35 - Rhode Island Joint Reinsurance Association

Key Rhode Island Statutes

Rhode Island Code of Regulations (RICR)

In addition to statutes, the Superintendent of Insurance adopts regulations published in the Rhode Island Code of Regulations (RICR):

Key RICR Sections:

• 230-RICR-20-05 - Insurance regulations
• 230-RICR-20-50-4 - Producer continuing education
• 230-RICR-20-50-5 - Licensing and renewal fees
• 230-RICR-20-05-1 - Uninsured and underinsured motorist insurance

Exam Tip: Rhode Island law is found in two places: (1) Rhode Island General Laws Title 27 (statutes), and (2) Rhode Island Code of Regulations 230-RICR-20 (regulations adopted by the Superintendent).

Rate Regulation in Rhode Island

Rhode Island uses a competitive rating system (file-and-use) for Property & Casualty insurance.

Competitive Rating System (File-and-Use)

How It Works:

1. Insurer Develops Rates: Actuaries develop rates based on loss data and expenses
2. File with DBR: Insurer files rates with Insurance Division electronically (SERFF system)
3. Immediate Use: Rates become effective immediately upon filing
4. DBR Review: Insurance Division reviews filed rates (typically 30-60 days)
5. Approval or Disapproval: Superintendent accepts rates or orders modifications
6. Insurer Response: If disapproved, insurer may modify rates or request hearing

Key Characteristics:

• No prior approval required - Rates effective immediately
• Market competition - Insurers compete on price and coverage
• Regulatory oversight - Superintendent reviews for compliance
• Consumer protection - Rates must not be excessive, inadequate, or unfairly discriminatory

Rate Standards

Rhode Island law requires that insurance rates be:

1. Not Excessive - Rates should not be unreasonably high
2. Not Inadequate - Rates must be sufficient to pay claims and maintain solvency
3. Not Unfairly Discriminatory - Similar risks should pay similar premiums

Prohibited Rating Factors:

• Race, color, religion, national origin
• Sexual orientation or gender identity
• Genetic information
• Disability (except where actuarially justified)

Rate Filing Process

SERFF System: Rhode Island uses the System for Electronic Rate and Form Filing (SERFF), a nationwide platform for submitting rate and form filings.

Timeline:

• Day 0: Insurer files rates through SERFF
• Day 0: Rates become effective (file-and-use)
• Days 1-60: DBR reviews filing
• Day 60+: Superintendent approves or disapproves rates

Disapproval Process: If the Superintendent disapproves rates:

1. Notice: Insurer receives written notice of disapproval
2. Reasons: Superintendent explains why rates violate standards
3. Insurer Options: Modify rates or request administrative hearing
4. Hearing: Insurer may contest disapproval
5. Final Decision: Superintendent issues final order

Exam Tip: Rhode Island uses file-and-use (competitive rating), NOT prior approval. This means insurers can use rates immediately upon filing, but the Superintendent may disapprove them later. This differs from prior approval states where rates cannot be used until approved.

Rate Regulation by Line

Rhode Island Insurance Guaranty Association

The Rhode Island Insurance Guaranty Association protects Rhode Island policyholders when a Property & Casualty insurance company becomes insolvent.

Purpose and Structure

Purpose: Ensure that policyholders receive claim payments even if their insurer becomes insolvent and cannot pay claims.

Membership: All insurers licensed to write P&C insurance in Rhode Island must be members.

How the Guaranty Association Works

Insolvency Trigger:

1. Insurer Insolvency: A Rhode Island-licensed P&C insurer becomes insolvent
2. Court Order: Rhode Island Superior Court orders insurer into liquidation
3. RIGA Activation: Rhode Island Insurance Guaranty Association assumes claims
4. Claims Payment: RIGA pays covered claims up to statutory limits
5. Member Assessment: RIGA assesses solvent member insurers to fund payments
6. Subrogation: RIGA seeks recovery from insolvent insurer's remaining assets

Coverage Limits

What RIGA Does NOT Cover

Exclusions:

• Claims against non-member insurers (unauthorized insurers)
• Claims exceeding statutory limits (above $300,000)
• Punitive or exemplary damages
• Interest accrued before insolvency
• Fines and penalties
• Policy deductibles
• Claims filed after deadline

Exam Tip: Rhode Island Insurance Guaranty Association protects P&C policyholders up to $300,000 per claim for most coverages. Workers' compensation has NO maximum limit. This safety net ensures policyholders receive claim payments even if their insurer fails.

National Association of Insurance Commissioners (NAIC)

Rhode Island actively participates in the National Association of Insurance Commissioners (NAIC), a national organization of state insurance regulators.

NAIC Purpose

Mission: Support state insurance regulation through:

• Model laws and regulations
• Regulatory coordination
• Information sharing
• Accreditation programs
• Consumer protection standards

Rhode Island and NAIC

Rhode Island Participation:

• Rhode Island Superintendent serves on NAIC committees
• Rhode Island adopts many NAIC model laws
• Rhode Island uses NAIC financial reporting systems
• Rhode Island participates in multi-state examinations

NAIC Tools Used by Rhode Island:

• SERFF - Electronic rate and form filing system
• PDB (Producer Database) - License tracking across states
• Financial Analysis Solvency Tools (FAST) - Insurer financial monitoring
• State Based Systems (SBS) - Regulatory information exchange

NAIC Model Laws Adopted by Rhode Island

Consumer Protection

The Rhode Island Insurance Division provides extensive consumer protection services.

Consumer Services

Consumer Complaint Process:

1. File Complaint: Consumer contacts DBR Insurance Division
2. Complaint Review: Division reviews complaint and contacts insurer
3. Investigation: Division investigates if violation suspected
4. Resolution: Division facilitates resolution or takes enforcement action
5. Appeal: Consumer may appeal to Superintendent

Complaint Types:

• Claim denials or delays
• Premium disputes
• Policy cancellations
• Agent misconduct
• Misrepresentation
• Unfair practices

Consumer Education

DBR Resources:

• Insurance buying guides
• Coverage explanations
• Premium comparison tools
• Complaint filing assistance
• Fraud prevention information
• Rights and responsibilities education

Contact Information:

• Phone: (401) 462-9520
• Website: dbr.ri.gov/insurance
• Address: 1511 Pontiac Avenue, Cranston, RI 02920

Financial Responsibility Verification

Rhode Island uses the Rhode Island Motor Vehicle Responsibility (MVR) System to verify auto insurance compliance:

Verification System:

• All insurers report policies electronically to DMV
• DMV cross-checks registrations against insurance database
• Uninsured vehicles flagged for enforcement
• Penalties for driving without insurance

Exam Tip: Rhode Island has a strong compulsory insurance verification system. Insurers must report all auto policies to the DMV, which cross-checks registrations to identify uninsured motorists.