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SB 2721

AN ACT RELATING TO INSURANCE -- CHILD-SERVING PROVIDER LIABILITY JOINT UNDERWRITING ASSOCIATION

2026 Regular Session Introduced by Jonathon Acosta and 8 co-sponsors

Creates a state-backed, nonprofit joint underwriting association to provide liability insurance for eligible child-serving providers when they cannot obtain affordable coverage in

04/30/2026 Committee recommended measure be held for further study
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Bill Summary · SB 2721

Summary of SB 2721 (Rhode Island, 2026)

Title: AN ACT RELATING TO INSURANCE — CHILD-SERVING PROVIDER LIABILITY JOINT UNDERWRITING ASSOCIATION

introduced: February 27, 2026
Sponsor: Senators DiMario, Lauria, Gallo, Vargas, Valverde, Britto, Acosta, Murray, Kallman

Status: Referred to Senate Judiciary; Committee recommended measure be held for further study (April 30, 2026)

Effective date: Upon passage

1) Main purpose and intent

  • To create a state-backed, nonprofit joint underwriting association (JUA) to provide liability insurance coverage for eligible child-serving providers when they are unable to obtain affordable coverage in the voluntary market.
  • The goal is to ensure continued operation of essential child-serving services (childcare, education, behavioral health, youth programs, foster care, etc.) by securing access to liability insurance as a “market of last resort.”

2) Key provisions and changes

Establishment and scope

  • Creates the Child-Serving Provider Liability Joint Underwriting Association (the Association).
  • All insurers authorized to write commercial general liability (CGL) in Rhode Island must be members of the Association as a condition of doing business in the state.
  • The Association operates as a nonprofit, unincorporated entity under a plan of operation approved by the Director of the Rhode Island Department of Business Regulation (DBR).

Definitions (focus areas)

  • “Child-serving provider” covers a broad range of entities licensed, certified, registered, or authorized to provide services to minors (e.g., licensed child care centers, family child care homes, group family programs, early learning and preschool programs, community-based behavioral health providers, residential facilities, foster care, after-school programs, mentoring, etc.).
  • “Net direct premiums,” “member insurer,” and other insurance-specific terms defined for the JUA framework.

Governance

  • A 7-member Board of Directors:
    • 4 representatives of member insurers (appointed by the Director of DBR)
    • 3 representatives of child-serving organizations (appointed by the Governor)
    • 1 public member with child advocacy or risk management experience (appointed by the Governor)
    • The Director acts as an ex officio, nonvoting member
  • Terms: 3-year terms, with eligibility for reappointment.

Plan of operation (timelines and content)

  • The Association must submit a proposed plan of operation within 120 days of the act’s effective date.
  • Plan must cover: underwriting facilities, eligibility standards, credentials for proving inability to obtain coverage, rates/forms, member assessments, investment/ fund management, servicing carriers/administrators, and other operational provisions.
  • The Director must approve the plan (or, if not submitted suitably, may adopt a plan).

Coverage and eligibility

  • Provides commercial general liability coverage (bodily injury, property damage, personal injury, and sexual abuse/molestation liability) to eligible child-serving providers.
  • Eligibility: in compliance with licensing and regulatory requirements and unable to obtain substantially equivalent coverage in the voluntary market after diligent effort.
  • The Association can set reasonable limits, deductibles, and exclusions with Director approval.
  • Coverage remains in effect only as long as the insured cannot obtain voluntary market coverage.

Rates, assessments, and finances

  • Rates must be actuarially sound, not excessive or unfairly discriminatory, and must be filed with and approved by the Director.
  • Assessments of member insurers (proportional to each member’s share of Rhode Island net direct CGL premiums written in the prior year) if revenues are insufficient to cover losses and expenses; subject to Director approval.
  • Possible tax offset: member insurers may offset assessments against premium tax liabilities as determined by the General Assembly.
  • Powers include borrowing, reinsurance, investing, and contracting with servicing carriers.

Oversight, tax status, and reporting

  • The Association is subject to examination by the DBR; costs borne by the Association.
  • Tax-exempt status except for property taxes (as specified).
  • Annual report due to the Director and statewide legislative leadership detailing finances, underwriting, claims, and market conditions.

3) Who/what is affected

  • Affected parties include:
    • Insurers authorized to write CGL insurance in Rhode Island (mandatory membership in the Association as a condition of authority to transact CGL business in the state).
    • Eligible child-serving providers (the potential beneficiaries of the JUA) that have difficulty obtaining voluntary market coverage.
    • State regulators (DBR) overseeing the Association’s plan, rates, and operations.
    • Child-serving organizations and advocates, due to governance representation on the Board.

4) Procedural and timeline aspects

  • Within 120 days of enactment: the Association must submit its proposed plan of operation to the Director for approval.
  • Ongoing: the Director approves the plan and all rates/forms; the Board operates under bylaws; annual reporting is required.
  • The act provides for immunity provisions and governance safeguards to protect board members and staff acting in good faith.

5) Potential impacts and considerations

  • Pros:
    • Improves access to liability insurance for vulnerable child-serving providers, reducing risk to service continuity and child safety.
    • Spreads risk across insurers via a joint underwriting mechanism, potentially stabilizing premiums for providers with high-risk profiles.
  • Cons/Concerns:
    • Mandatory participation of all insurers could affect market dynamics and pricing.
    • Financial viability depends on adequate premium contributions, assessments, and prudent management of funds and claims.
    • Legislative oversight is centralized via the Director’s approvals, which centralizes control over rates and plan specifics.

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

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