Rhode Island General Laws
Chapter 27-16 - Unauthorized Insurance Business
Section 27-16-1.2. - Certificate of compliance — Exceptions.

§ 27-16-1.2. Certificate of compliance — Exceptions.
(a) It shall be unlawful for any insurer to transact insurance business in this state as set forth in subsection (b) of this section without a certificate of compliance from the commissioner; provided, that this section shall not apply to:
(1) The lawful transaction of surplus lines insurance;
(2) The lawful transaction of reinsurance by insurers;
(3) Transactions in this state involving a policy lawfully solicited, written, and delivered outside of this state covering only subjects of insurance not resident, located, or expressly to be performed in this state at the time of issuance, and which transactions are subsequent to the issuance of the policy;
(4) Attorneys acting in the ordinary relation of attorney and client in the adjustment of claims or losses;
(5) Transactions in this state involving group life and group sickness and accident or blanket sickness and accident insurance or group annuities where the master policy of the groups was lawfully issued and delivered in and pursuant to the laws of a state in which the insurer was authorized to do an insurance business, to a group organized for purposes other than the procurement of insurance, and where the policyholder is domiciled or has a bona fide situs;
(6) Transactions in this state involving any policy of insurance or annuity contract issued prior to May 15, 1973;
(7) Transactions in this state relative to a policy issued outside of this state involving insurance on vessels, craft, or hulls, cargoes, marine protection, and indemnity or other risk, including strikes and war risks commonly insured under ocean or wet marine forms of policy;
(8) Transactions in this state involving contracts of insurance issued to one or more industrial insured. An industrial insured is defined as an insured:
(i) Which procures the insurance of any risk by the use of the services of a full-time employee acting as insurance manager or buyer or the services of a regularly and continuously retained qualified insurance consultant;
(ii) Whose aggregate annual premiums on all risks excluding workers’ compensation and group total at least twenty-five thousand dollars ($25,000); and
(iii) Which has at least twenty-five (25) full-time employees; and
(9)(i) Transactions in this state involving life insurance, health insurance, or annuities provided to educational or religious or charitable institutions organized and operated without profit to any private shareholder or individual for the benefit of the institutions and individuals engaged in the service of the institutions;
(ii) This exemption shall be conditional upon the company complying with the following requirements:
(A) Payment of an annual registration fee of five hundred dollars ($500);
(B) Filing a copy of any policy or contract form, including annuities issued to any Rhode Island residents with the commissioner of insurance. Each policy and contract form, including annuities, shall contain (on its front and declaration page) in at least twelve (12) point type the following notice:
(B)
THIS CONTRACT HAS BEEN PLACED WITH AN INSURER NOT LICENSED TO DO BUSINESS IN THE STATE OF RHODE ISLAND BUT ELIGIBLE AS AN UNLICENSED REGISTERED INSURER PURSUANT TO THE UNAUTHORIZED BUSINESS STATUTE. THE INSURER IS NOT A MEMBER OF THE RHODE ISLAND LIFE AND HEALTH GUARANTY ASSOCIATION. SHOULD THE INSURER BECOME INSOLVENT, THE PROTECTION AND BENEFITS OF THE ASSOCIATION ARE NOT AVAILABLE.

(C) Filing a copy of its annual statement, prepared pursuant to the laws of its state of domicile, and any other financial material that may be requested by the commissioner; and
(D) The company agrees to appoint the commissioner of insurance, and his or her successors in office, as its attorney to receive service of legal process issued against it in Rhode Island. The appointment is to be irrevocable and to bind the commissioner, and any successors in interest, and to remain in effect as long as there is in force in this state any contract issued by the company or any obligations arising from a contract.
(10) Rental car companies and their employees principally engaged in the rental of motor vehicles and which offer in connection with and incidental to the rental of motor vehicles various optional insurance coverage during the term of the rental, which shall be no more than sixty (60) days.
(11) Transactions that are insurance securitization or reinsurance transactions entered into by a protected cell of a protected cell company organized under the Protected Cell Companies Act, chapter 64 of this title, as those terms are defined or utilized in that chapter.
(b) Any of the following acts in this state effected by mail or otherwise, by or on behalf of an insurer, is deemed to constitute the transaction of an insurance business in this state. The venue of an act committed by mail is at the point where the matter transmitted by mail is delivered and takes effect. Unless indicated, “insurer,” as used in this section, includes all corporations, associations, partnerships, and individuals engaged as principals in the business of insurance and also includes interinsurance exchanges and mutual benefit societies:
(1) The making or proposing to make, as an insurer an insurance contract;
(2) The making of or proposing to make, as guarantor or surety, any contract of guaranty or suretyship as a vocation and not merely incidental to any other legitimate business or activity of the guarantor or surety;
(3) The taking or receiving of any application for insurance;
(4) The receiving or collection of any premium, commission, membership fees, assessments, dues, or other consideration for an insurance or any part of an insurance;
(5) The issuance or delivery of contracts of insurance to residents of this state or to persons authorized to do business in this state;
(6) Directly or indirectly acting as an agent or insurance producer for or representing or aiding on behalf of another any person or insurer in the solicitation, negotiation, procurement, or effectuation of insurance or renewals of insurance or in the dissemination of information as to coverage or rates, forwarding of applications, delivery of policies or contracts, inspection of risks, fixing of rates or investigation or adjustment of claims or losses, or in the transaction of matters subsequent to effectuation of the contract and arising out of it, or in any other manner representing or assisting a person or insurer in the transaction of insurance with respect to subjects of insurance, resident, located, or to be performed in this state. The provisions of this subsection shall not operate to prohibit full-time salaried employees of a corporate insured from acting in the capacity of an insurance manager or buyer in placing insurance in behalf of the employer;
(7) The transaction of any kind of insurance business specifically recognized as transacting an insurance business within the meaning of the statutes relating to insurance; or
(8) The transacting or proposing to transact any insurance business in substance equivalent to any of these in a manner designed to evade the provisions of the statutes.
(c) The failure of an insurer transacting insurance business in this state to obtain a certificate of compliance shall not impair the validity of any act or contract of the insurer and shall not prevent the insurer from defending any action at law or suit in equity in any court of this state, but no insurer transacting insurance business in this state without a certificate of authority shall be permitted to maintain an action in any court of this state to enforce any right, claim, or demand arising out of the transaction of insurance business until the insurer shall have obtained a certificate of authority.
(d) In the event of the failure of any unauthorized insurer to pay any claim or loss within the provisions of the insurance contract, any person who assisted or in any manner aided directly or indirectly in the procurement of the insurance contract shall be liable to the insured for the full amount of the claim or loss in the manner provided by the provisions of the insurance contract.
History of Section.G.L. 1938, ch. 151, § 31; P.L. 1940, ch. 856, § 2; G.L. 1956, § 27-16-1; G.L. 1956, § 27-16-1.2; P.L. 1973, ch. 231, § 1; P.L. 1996, ch. 188, § 8; P.L. 1998, ch. 138, § 2; P.L. 1999, ch. 22, § 7; P.L. 2002, ch. 292, § 31; P.L. 2008, ch. 371, § 4.