(a)  For purposes of this section “high net worth insured” shall mean any insured, excluding state and local governments, whose net worth exceeds fifty million dollars ($50,000,000) on December 31 of the year prior to the year in which the insurer becomes an insolvent insurer; provided that an insured’s net worth on that date shall be deemed to include the aggregate net worth of the insured and all of its subsidiaries and affiliates as calculated on a consolidated basis.

Terms Used In Rhode Island General Laws 27-34-11.5

  • Association similar to the association: means any guaranty association, security fund or other insolvency mechanism that affords protection similar to that of the association. See Rhode Island General Laws 27-34-5
  • Claimant: means any person instituting a covered claim; provided that no person who is an affiliate of the insolvent insurer may be a claimant;

    (8)  "Commissioner" means the director of the department of business regulation or his or her designee;

    (9)  "Control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with, or corporate office held by, the person. See Rhode Island General Laws 27-34-5

  • Covered claim: means :

    (i)  An unpaid claim, including one for unearned premiums, submitted by a claimant, which arises out of and is within the coverage and subject to the applicable limits of an insurance policy to which this chapter applies if the insurer becomes an insolvent insurer after the effective date of this chapter and the policy was either issued by the insurer or assumed by the insurer in an assumed claims transaction, and:

    (A)  The claimant or insured is a resident of this state at the time of the insured event; provided, that for entities other than an individual, the residence of a claimant, insured or policyholder is the state in which its principal place of business is located at the time of the insured event; or

    (B)  The claim is a first-party claim for damage to property with a permanent location in this state. See Rhode Island General Laws 27-34-5

  • Insolvent insurer: means an insurer licensed to transact insurance in this state either at the time the policy was issued; when the obligation with respect to the covered claim was assumed under an assumed claims transaction; or when the insured event occurred, and against whom a final order of liquidation has been entered after the effective date of this chapter with a finding of insolvency by a court of competent jurisdiction in the insurer's state of domicile;

    (12)  "Insured" means any named insured, any additional insured, any vendor, lessor or any other party identified as an insured under the policy. See Rhode Island General Laws 27-34-5

  • Lawsuit: A legal action started by a plaintiff against a defendant based on a complaint that the defendant failed to perform a legal duty, resulting in harm to the plaintiff.
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Person: means any individual, aggregation of individuals, corporation, partnership, or other entity;

    (19)  "Qualified financial institution" shall have the same meaning as the term in §?27-1. See Rhode Island General Laws 27-34-5

(b)(1)  The association shall not be obligated to pay any first-party claims by a high net worth insured.

(2)  The association shall have the right to recover from the high net worth insured all amounts paid by the association to or on behalf of such insured, whether for indemnity, defense or otherwise.

(c)  The association shall not be obligated to pay any claim that would otherwise be a covered claim that is an obligation to or on behalf of a person who has a net worth greater than that allowed by the insurance guaranty association law of the state of residence of the claimant at the time specified by that state’s applicable law, and which association has denied coverage to that claimant on that basis.

(d)  The association shall establish reasonable procedures subject to the approval of the commissioner for requesting financial information from insureds on a confidential basis for purposes of applying this section, provided that the financial information may be shared with any other association similar to the association and the liquidator for the insolvent insurer on the same confidential basis. Any request to an insured seeking financial information must advise the insured of the consequences of failing to provide the financial information. If an insured refuses to provide the requested financial information where it is requested and available, the association may, until such time as the information is provided, provisionally deem the insured to be a high net worth insured for the purpose of denying a claim under subsection (b) of this section.

(e)  In any lawsuit contesting the applicability of this section where the insured has refused to provide financial information under the procedure established pursuant to subsection (d) of this section, the insured shall bear the burden of proof concerning its net worth at the relevant time. If the insured fails to prove that its net worth at the relevant time was less than the applicable amount, the court shall award the association its full costs, expenses and reasonable attorney’s fees in contesting the claim.

History of Section.
P.L. 2010, ch. 91, § 3; P.L. 2010, ch. 117, § 3.