(a)  The certificate of authority of an administrator shall be suspended or revoked if the commissioner finds that the administrator is:

(1)  In an unsound financial condition;

(2)  Using any methods or practices in the conduct of its business so as to render its further transaction of business in this state hazardous or injurious to insured persons or the public; or

(3)  Has failed to pay any judgment rendered against it in this state within sixty (60) days after the judgment has become final.

Terms Used In Rhode Island General Laws 27-20.7-15

  • Administrator: means a person who directly or indirectly solicits or effects coverage of, underwrites, collects charges or premiums from, or adjusts or settles claims on residents of this state, or residents of another state from offices in this state, in connection with life or health insurance coverage or annuities, except any of the following:

    (i)  An employer on behalf of its employees or the employees of one or more subsidiaries or affiliated corporations of the employer;

    (ii)  A union on behalf of its members;

    (iii)  An insurer which is authorized to transact insurance in this state with respect to a policy lawfully issued and delivered in and pursuant to the laws of this state or another state;

    (iv)  A producer licensed to sell life or health insurance in this state, whose activities are limited exclusively to the sale of insurance;

    (v)  A creditor on behalf of its debtors with respect to insurance covering a debt between the creditor and its debtors;

    (vi)  A trust and its trustees, agents and employees acting pursuant to the trust established in conformity with 29 U. See Rhode Island General Laws 27-20.7-2

  • affiliated: means an entity or person who directly or indirectly through one or more intermediaries controls or is controlled by, or is under common control with, a specified entity or person. See Rhode Island General Laws 27-20.7-2
  • Commissioner: means the commissioner of insurance. See Rhode Island General Laws 27-20.7-2
  • Insurer: includes all persons, firms or corporations offering and/or insuring health services on a prepaid basis, including, but not limited to, policies of accident and sickness insurance as defined by chapter 18 of this title, nonprofit hospital or medical service plans as defined by chapters 19 and 20 of this title, or any other entity whose primary function is to provide diagnostic, therapeutic or preventive services to a defined population on the basis of a periodic premium. See Rhode Island General Laws 27-20.7-2
  • Nolo contendere: No contest-has the same effect as a plea of guilty, as far as the criminal sentence is concerned, but may not be considered as an admission of guilt for any other purpose.
  • 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.
  • Plea: In a criminal case, the defendant's statement pleading "guilty" or "not guilty" in answer to the charges, a declaration made in open court.
  • Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.

(b)  The commissioner may in his or her discretion, suspend or revoke the certificate of authority of an administrator if the commissioner finds that the administrator:

(1)  Has violated any lawful rule or order of the commissioner or any provision of the insurance laws of this state;

(2)  Has refused to be examined or to produce its accounts, records and files for examination, or if any of its officers has refused to give information with respect to its affairs or has refused to perform any other legal obligation as to an examination, when required by the commissioner;

(3)  Has, without just cause, refused to pay proper claims or perform services arising under its contracts or has, without just cause, caused covered individuals to accept less than the amount due them or caused covered individuals to employ attorneys or bring suit against the administrator to secure full payment or settlement of the claims;

(4)  Is affiliated with or under the same general management or interlocking directorate or ownership as another administrator or insurer that unlawfully transacts business in this state without having a certificate of authority;

(5)  Has at any time failed to meet any qualification for which issuance of the certificate could have been refused had the failure then existed and been known to the department;

(6)  Has been convicted of, or has entered a plea of guilty or nolo contendere to, a felony without regard to whether adjudication was withheld; or

(7)  Is under suspension or revocation in another state.

(c)  The commissioner may in his or her discretion and without advance notice or hearing immediately suspend the certificate of an administrator if the commissioner finds that one or more of the following circumstances exist:

(1)  The administrator is insolvent or impaired;

(2)  A proceeding for receivership, conservatorship, rehabilitation or other delinquency proceeding regarding the administrator has been commenced in any state; or

(3)  The financial condition or business practices of the administrator pose an imminent threat to the public health, safety or welfare of the residents of this state.

(d)  If the commissioner finds that one or more grounds exist for the suspension or revocation of a certificate of authority issued under this part, the commissioner may, in lieu of suspension or revocation, impose a fine upon the administrator.

History of Section.
P.L. 2001, ch. 83, § 1; P.L. 2001, ch. 242, § 1.