The bill amends the General Laws in Rhode Island concerning the restructuring of solvent insurers and the regulation of insurance associations, particularly focusing on the definitions and handling of "covered claims" in the event of insurer insolvency. Key insertions include the definition of "assumption reinsurance agreement," which specifies conditions for execution, and the introduction of a new section, 27-34-11.5, defining "high net worth insured" as those with a net worth exceeding fifty million dollars, exempting them from certain claims. The bill also establishes new caps for claims related to first-party property loss and cybersecurity insurance, while clarifying the association's rights and responsibilities in managing claims from insolvent insurers. Additionally, it updates definitions and removes outdated language to enhance regulatory clarity.

Furthermore, the bill proposes significant changes to the regulatory framework governing reciprocal exchanges and interinsurers, including the repeal of Chapter 27-17 and the introduction of new sections that modernize compliance requirements and operational guidelines. Notable deletions include specific mandates for financial statements and compliance certificates, replaced by new provisions that outline the process for serving legal documents and maintaining adequate reserves. The bill aims to streamline the insurance process, improve clarity, and ensure that the obligations of insurance associations are well-defined, ultimately enhancing the protection of policyholders and the operational efficiency of the insurance industry in Rhode Island. The act is set to take effect on January 1, 2026.