(a)  An administrator shall not enter into an agreement or understanding with an insurer in which the effect is to make the amount of the administrator’s commissions, fees, or charges contingent upon savings effected in the adjustment, settlement and payment of losses covered by the insurer’s obligations. This provision shall not prohibit an administrator from receiving performance-based compensation for providing hospital or other auditing services.

Terms Used In Rhode Island General Laws 27-20.7-9

  • 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

  • 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
  • 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)  This section shall not prevent the compensation of an administrator from being based on premiums or charges collected or the number of claims paid or processed.

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