The Rhode Island Insurance Market Protection Act establishes new regulations for the state's insurance industry to align with climate change mitigation efforts. The Act defines "covered insurers" and mandates that they cease underwriting any new fossil fuel projects by July 1, 2026, and phase out all underwriting for existing fossil fuel projects and investments by January 1, 2035. Covered insurers are required to report their fossil fuel-related investments and emissions annually, promoting transparency and accountability.

The Act introduces several definitions related to climate change, including "financed emissions," "insured emissions," and "science-based climate mitigation targets," which align with international standards such as the Paris Agreement. The Department of Business Regulation (DBR) is empowered to oversee compliance and develop regulations to implement the Act.

Additionally, the legislation outlines a structured process for insurers wishing to withdraw from the Rhode Island insurance market. Insurers must submit an informational filing to the DBR before ceasing operations, notify policyholders of their intent to withdraw within 30 days of filing, and cannot begin nonrenewals until at least one year and ninety days after the filing.

The Act includes penalties for noncompliance, such as administrative penalties based on the insurer's market share and profits, and requires noncompliant insurers to report semiannually to the DBR and submit a compliance plan. The director may waive certain requirements to protect the solvency of insurers. Furthermore, the director is tasked with biennial reporting on the implementation of the law, including anonymized data on insurer investments related to climate change and its effects on insurance availability for low-income and underserved communities.