The bill amends various sections of the General Laws concerning the "Voluntary Restructuring of Solvent Insurers" and the "Rhode Island Property and Casualty Insurance Guaranty Association." It introduces new definitions, including "cybersecurity insurance," which encompasses first and third-party coverage for losses related to data privacy breaches, unauthorized information network security intrusions, computer viruses, ransomware, cyber extortion, identity theft, and similar exposures.

The definition of "Commissioner" is updated to include the director's designee, and the term "Commercial run-off insurer" is refined to exclude "workers compensation." The bill specifies the types of insurance not covered by the Rhode Island Property and Casualty Insurance Guaranty Association, including life and health insurance, while expanding the definition of "covered claims" to include obligations from transactions involving both member and non-member insurers.

Additionally, the bill outlines the association's obligations in the event of an insurer's insolvency, including a cap of one million dollars for all first-party property loss claims arising from a single occurrence under a policy covering commercial or residential property, and five hundred thousand dollars for all first and third-party claims under a policy providing cybersecurity insurance coverage arising out of or related to a single insured event.

The bill also includes provisions for the association to pay cybersecurity insurance obligations on behalf of high net worth insureds, defined as those with a net worth exceeding $50 million, and establishes that the association shall recover all amounts paid on behalf of these insureds. The association is granted the authority to request financial information from insureds to determine their net worth status, with confidentiality assured.

The effective date for these changes is set for January 1, 2026.

Statutes affected:
5548: 27-14.5-1
5548  SUB A: 27-14.5-1