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 bill clarifies terms such as "commissioner" and "covered claim," and expands the scope of the Rhode Island Property and Casualty Insurance Guaranty Association to include a broader range of insurance types while explicitly excluding life and health insurance.

The bill updates the roles of the commissioner and the Department of Business Regulation, allowing for delegation of responsibilities. It specifies the conditions under which claims are deemed "covered claims," including obligations that arise from policies issued by member insurers and those that may be transferred or assumed by other insurers.

Additionally, the bill outlines the obligations of the association in the event of an insurer's insolvency, including new claim limits for first-party property loss claims, which are set at one million dollars for all claims arising from a single occurrence under a policy covering commercial or residential property. For cybersecurity insurance claims, the association is limited to five hundred thousand dollars for all claims arising out of or related to a single insured event, regardless of the number of claims made or claimants.

The bill defines "high net worth insured" and specifies that the association is not required to pay first-party claims for these individuals, while allowing for the recovery of any amounts paid on their behalf. It establishes procedures for the association to request financial information from insureds to determine their net worth status, includes confidentiality provisions, and places the burden of proof on the insured in disputes regarding their classification. The act is set to take effect on January 1, 2026.

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