Rhode Island: NAMIC Comments on Coastal Property Regulations

Regulations implementing Rhode Island legislation responsive to concerns about coastal property insurance marketplace developments should not go beyond the scope of the legislation in limiting insurers’ ability to manage their exposure to catastrophic risk, NAMIC asserted in comments to regulators last week.

The state's Department of Business Regulation adopted Insurance Regulation 110 – Residential Property Insurance – Hurricanes and amendments to Insurance Regulation 97 – Notice of Material Changes Upon Renewal of Personal Motor Vehicle, Homeowner and Residential Fire Insurance on an emergency basis to implement R.I. Gen. Laws § 27-5-3.7.

“Effective management of exposure to catastrophic risk is in the interest of insurers’ policyholders and the public,” asserted Paul Tetrault, NAMIC’s Northeast state affairs manager, in comments submitted to the DBR June 5. “Where the statute establishes certain limitations and requirements that affect insurers’ ability to manage their exposure to catastrophic risk, NAMIC believes it is imperative that the implementing regulations do not exceed the scope of the statute or have the effect of imposing further limitations.”

Specifically, Tetrault cited provisions that would restrict the period for which hurricane deductibles could be applied, limit the geographic territory in which insurers could require mitigation measures, create uncertainty regarding deductible waiver requirements, and subject insurers to regulatory penalties for failure to provide required notice even in cases where coverage changes are beneficial to insureds.

The regulatory changes are the result of legislation enacted last year that was the product of a legislative commission convened to examine the impact natural disasters such as hurricanes on homeowners insurance.

Direct questions to NAMIC State Affairs Manager Paul Tetrault.

Posted: Tuesday, June 10, 2008 12:00:00 AM. Modified: Wednesday, June 11, 2008 3:00:19 PM.

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We are 1,400 property/casualty insurance companies serving more than 135 million auto, home and business policyholders, with more than $196 billion in premiums accounting for 50 percent of the automobile/homeowners market and 31 percent of the business insurance market. We are the largest and most diverse property/casualty trade association in the country, with regional and local mutual insurance companies on main streets across America joining many of the country’s largest national insurers who also call NAMIC their home. More than 200,000 people are employed by NAMIC members.