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HB 5416

AN ACT RELATING TO INSURANCE -- CASUALTY INSURANCE RATING

2025 Regular Session Introduced by Karen Alzate and 6 co-sponsors

HB 5416 limits auto insurance rating factors to driving records, bans discrimination by multiple traits, and prohibits surcharges/nonrenewals except limited loss cases.

03/25/2025 Committee recommended measure be held for further study
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Bill Summary · HB 5416

Summary — HB 5416: AN ACT RELATING TO INSURANCE — CASUALTY INSURANCE RATING

Status: Committee recommended measure be held for further study (03/25/2025)
Introduced: Feb 12, 2025 (filed Mar 14, 2025) — Referred to House Corporations; subsequent referrals and actions listed below.

Purpose / Intent

HB 5416 amends R.I. Gen. Laws §27-9-4 to limit the factors insurers may use when rating private passenger automobile insurance, to protect certain classes of drivers from adverse rate treatment, and to constrain nonrenewal and surcharge practices. The bill is intended to make auto insurance rating practices more uniform and to prohibit disparate treatment based on specified personal or demographic characteristics and on incidents that occur while an individual is working in certain covered roles.

Key provisions and changes

  • Amends §27-9-4 — sets required considerations for insurance rates and adds explicit prohibitions and protections.
  • Prohibited considerations when setting an individual’s personal auto rate:
    • Losses/incidents that occurred while a driver was employed as a bus driver for Rhode Island public transit or school bus companies.
    • Losses/incidents that occurred while a law enforcement officer was acting in the course of employment (state, municipal, or federal).
    • Losses/incidents that occurred while a commercial vehicle driver was acting in the course of employment.
    • Commercial vehicle defined for this purpose as: gross vehicle weight > 10,000 lbs or a vehicle used for public livery; driver must provide proof to insurer that incident occurred while operating a commercial vehicle.
  • Anti-discrimination list — insurers may not make distinctions or discriminate in premiums/rate class on the basis of: education level, race, ethnicity, disability, occupation, income, credit scores/reports/checks, gender, zip code/adjacent zip code, or census tract.
  • Insurers must rely solely on an individual’s driving record for setting auto premiums/rate class and for acceptance/rejection decisions.
  • Renewal and surcharge limits:
    • Nonrenewal for loss occurrences is prohibited except where there is a single chargeable loss of $3,000 or more, or more than two nonchargeable loss occurrences within a policy year.
    • Insureds age 65+ with no chargeable accidents or moving violations in the preceding three years shall not be penalized solely on the basis of age.
    • Insurers cannot refuse renewal solely because an insured attained age 65; the insurance commissioner may hold hearings and impose cease-and-desist orders and fines (up to $1,000 per violation) for violations.
    • No surcharge where an insured is 50% or less at fault for an accident.
    • No surcharge for property damage claims under $3,000.
  • Additional protection: widowed persons must not be treated differently from married persons for personal auto rate/classification.
  • Text truncation: the bill contains a provision protecting volunteer drivers (definition and full text truncated in provided version). Users should consult the full bill for final volunteer-driver language.

Who is affected

  • Primary: automobile insurers operating in Rhode Island and their underwriting/rating manuals.
  • Insured individuals: public transit and school bus drivers, law enforcement officers, commercial drivers, persons age 65+, widowed persons, volunteer drivers (per truncated provision), and drivers with low-damage claims.
  • State regulator: Rhode Island Insurance Commissioner (authority to adjudicate complaints, hold hearings, issue cease-and-desist orders, and levy fines).

Procedural / timeline notes

  • Introduced Feb 12, 2025; filed Mar 14, 2025; referred to House Corporations.
  • Scheduled for hearing 03/25/2025; committee recommended holding the measure for further study (03/25/2025).
  • Read first time and referred to Homeland Security, Public Safety & Veterans' Affairs on 04/07/2025.
  • Effective date note in text: “[Effective January 1, 2025.]” (as shown in the section header) — consult final enrolled act for operative date.

For full operative language (including the volunteer-driver definition and any later amendments), consult the official bill text or the Rhode Island General Assembly bill page.

Compiled from official sources — confirm details with the bill’s official record.

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