AN ACT RELATING TO INSURANCE -- UNAUTHORIZED INSURANCE BUSINESS -- MEDICAL MALPRACTICE INSURANCE (Provides for greater oversight and regulation by the department of business regulation on medical-malpractice insurance among self-insured entities.)

H8401

2026 -- H 8401
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LC006268
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STATE OF RHODE ISLAND
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2026
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A N A C T
RELATING TO INSURANCE -- UNAUTHORIZED INSURANCE BUSINESS -- MEDICAL
MALPRACTICE INSURANCE

Introduced By:
Representatives Spears, Cotter, Boylan, Fogarty, Donovan, Speakman,
McEntee, and Potter

Date Introduced:
April 03, 2026

Referred To:
House Corporations
It is enacted by the General Assembly as follows:
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SECTION 1. Section 27-16-2.6 of the General Laws in Chapter 27-16 entitled
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"Unauthorized Insurance Business" is hereby amended to read as follows:
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27-16-2.6.
Hospitals affiliated with accredited medical schools — Indemnification of
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personnel
Self-insurance for hospitals affiliated with accredited medical schools.
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Nothing in §§ 27-16-1.2 — 27-16-2.2 shall be construed to limit or prevent hospitals
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affiliated with an accredited medical school from agreeing to indemnify hospital employees, and
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physicians, including physicians’ incorporated or unincorporated practices and employees, and
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medical, nursing, or allied health students affiliated with the hospital, collectively “covered
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persons”, for the legal liability of those covered persons for loss, damage, or expense incident to
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claims of bodily injury or death arising out of medical malpractice or professional error or mistake,
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“malpractice coverage”, whether the hospital charges the covered persons for malpractice coverage
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or not. The hospitals making the agreements shall be required to establish and maintain a reserve
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fund with which the malpractice coverage will be provided, which may be either part of or separate
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from a self-insurance fund maintained by or on behalf of the hospital. Any self-insurance fund shall
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annually provide a certified financial statement with actuarial projections as to the soundness of its
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reserving to the director of the department of health and the director of the department of business
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regulation. The malpractice coverage provided by the agreements shall be in amounts that meet the
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minimum insurance coverage limits required by any regulation promulgated by the director of

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business regulation pursuant to § 42-14.1-2.
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(a) Notwithstanding any provision of law, rule or regulation to the contrary, any hospital
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affiliated with a Rhode Island accredited medical school may establish a self-insurance program
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for medical malpractice liability; provided, however, that such program shall be subject to the full
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regulatory authority, review, and approval of the department of business regulation.
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(b) No such self-insurance program shall be established, maintained, or operated without
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prior approval of the department of business regulation.
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(c) The department of business regulation shall require demonstration of:
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(1) Establishment of an entity, such as a captive insurance company, that is regulated as an
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insurance entity;
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(2) Actuarial soundness of the entity;
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(3) Adequate capitalization and reserves;
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(4) Claims-paying ability under reasonably foreseeable adverse conditions;
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(5) Ongoing financial reporting and independent audit; and
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(6) The hospital entity will establish to the satisfaction of the department of business
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regulation that the self-insurance entities existence and reserves will survive the bankruptcy,
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dissolution or reorganization of the hospital.
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(d)(1) The department shall have authority to examine, audit, and require corrective action,
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including suspension or revocation of approval in the same manner in which the department has
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authority over licensed insurers under title 27.
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(2) If the self-insured entity is domiciled outside of Rhode Island, the department of
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business regulation shall be given access to all records of the entity and of the foreign jurisdiction
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regarding the entity upon demand.
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(e) The hospital will be responsible for all costs incurred by the department of business
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regulation pursuant to § 27-13.1-7.
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(f) The provisions of § 27-13.1-5(f) shall apply to all information received or created by
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the department of business regulation in regulation of the self-insured entity.
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(g) Any exemption from traditional insurance requirements under this section shall not
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exempt such entities from solvency, reporting, or oversight requirements imposed by the
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department of business regulation.
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(h) No medical malpractice coverage provided under this section shall be recognized for
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purposes of licensure unless approved by the department of business regulation.
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(i) The department of business regulation may withdraw approval of the self-insurance
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entity if the department determines that the entity is in hazardous financial condition pursuant to

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chapter 14.2 of title 27 or is otherwise out of compliance with this statute.
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(j) The department of business regulation shall prescribe the manner of application for
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permissible self-insurance and shall require renewal of the permission to self-insure on an annual
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basis.
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(k) If a hospital that has been granted self-insured status, a general description of the self-
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insured entity, including all contact information, shall be public along with information pursuant to
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§ 27-13.1-5(e). All other information provided to the department of business regulation shall be
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subject to § 27-13.1-5(f).
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SECTION 2. Chapter 27-16 of the General Laws entitled "Unauthorized Insurance
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Business" is hereby amended by adding thereto the following section:
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27-16-2.7. Comprehensive regulation of medical malpractice coverage.
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(a) All forms of medical malpractice coverage for Rhode Island licensed providers,
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including insurance policies, self-insurance programs, captive insurance arrangements, and risk-
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sharing pools, shall be subject to the exclusive regulatory authority of the department of business
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regulation.
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(b) No such coverage shall be valid for purposes of licensure unless approved by the
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department of business regulation.
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(c) The department shall establish standards for:
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(1) Financial solvency;
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(2) Reserve adequacy;
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(3) Claims-paying ability; and
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(4) Governance and risk management.
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(d) The department shall have authority to examine, audit, and enforce compliance for all
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entities providing such coverage.
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(e) No form of medical malpractice insurance shall satisfy the requirement of coverage in
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this statute unless it meets the limits and deductibles established by the department of business
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regulation by rule or regulation.
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(f) The identity of medical malpractice coverage, including the insurer or self-insured
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entity, policy limits and deductibles shall be provided to the public upon demand.
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SECTION 3. Section 42-14-2.1 of the General Laws in Chapter 42-14 entitled "Department
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of Business Regulation" is hereby amended to read as follows:
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42-14-2.1.
Reporting by certain insurers — Settlements
Reporting of claims and
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coverage.
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(a) Every insurer or entity exempt pursuant to § 27-16-2.6 or entity permissibly self-insured

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pursuant to § 42-14.1-2 providing professional liability insurance to licensed healthcare
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professionals or licensed healthcare facilities shall send a complete report to the board of medical
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licensure and discipline established pursuant to chapter 37 of title 5, or the board of examiners in
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dentistry established pursuant to chapter 31.1 of title 5 and the department of business regulation
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as to any claim, notice, settlement, judgment, or arbitration award of a claim or action for damages
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for death or personal injury caused by such person’s negligence, error, or omission in practice or
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the person’s rendering of unauthorized professional services. The report shall be sent within thirty
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(30) days after service of such arbitration award on the parties or notice of the claim, settlement,
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judgment, or arbitration award.
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(b) Notwithstanding any other provision of law, an insurer or entity exempt pursuant to §
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27-16-2.6 or entity permissibly self-insured pursuant to § 42-14.1-2 providing professional liability
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coverage to licensed healthcare professionals or licensed healthcare facilities shall have the
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contractual right to settle any claim up to the limits of the policy without the insured’s consent,
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unless the policy by its express terms prohibits the insurer from settling any claim without the
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consent of the insured.
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(c) All insurers doing business in the state of Rhode Island or entity exempt pursuant to §
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27-16-2.6 or entity permissibly self-insured pursuant to § 42-14.1-2 providing professional liability
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insurance for healthcare professionals or licensed healthcare facilities shall file an annual report
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with the commissioner of insurance. This report must be filed for each year by March 1 of the next
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year. The information required for each year shall include, for each rating class:
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(1) The number of insured;
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(2) The total premiums paid;
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(3) The total number of claims made, the years in which the incidents giving rise to the
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claims occurred, and the total number of those claims outstanding at the end of the year;
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(4) The total amount of claims paid, the years in which the incidents giving rise to the
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claims occurred, and the amount of the costs that can be identified with these claims for
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investigation, processing, and defense of these claims; and
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(5) The number of lawsuits filed.
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(a) All insurers, self-insurance programs, captive arrangements, risk retention groups, or
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any entity providing professional liability coverage to Rhode Island licensed providers shall
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provide all information requested by the department of business regulation regarding their financial
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status, claims and coverage.
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(b) The information shall include, but not be limited to:
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(1) Claims activity;

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(2) Coverage limits and structure;
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(3) Financial condition of the coverage provider; and
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(4) Actuarial reserve status for self-insured programs.
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(c) Reporting shall occur as directed by the department of business regulation.
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(d) The department of business regulation shall have the authority to require additional
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financial and actuarial reporting necessary to assess solvency.
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(e) The department of business regulation shall share data and coordinate enforcement
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actions with the department of health or with other jurisdictions in accordance with § 27-13.1-
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5(e)(2).
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(f) The provisions of § 27-13.1-5(f) shall apply to all information received or created by
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the department of business regulation in regulation of the self-insured entity.
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(g) Any material impairment, insolvency risk, or regulatory action identified by the
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department of business regulation shall be reported to the department of health and may trigger
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licensure review or action.
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(h) In addition to any action taken by the department of health, the department of business
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regulation may take action against the self-insurance entity pursuant to § 27-13.1-5(d) independent
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of any action taken by the department of health.
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(i) If the department of business regulation believes that the solvency of the self-insured
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entity is at risk, it may take action against the self-insured entity under the provisions of § 27-13.1-
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5(d).
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(j) The hospital will be responsible for all costs incurred by the department of business
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regulation pursuant to § 27-13.1-7.
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SECTION 4. Section 42-14.1-2 of the General Laws in Chapter 42-14.1 entitled
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"Department of Business Regulation — Medical Malpractice Insurance" is hereby amended to read
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as follows:
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42-14.1-2.
Malpractice insurance
Professional liability insurance required.
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(a) The director of business regulation shall promulgate rules and regulations requiring all
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licensed medical and dental professional and all licensed healthcare providers to be covered by
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professional liability insurance insuring the practitioner for claims of bodily injury or death arising
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out of malpractice, professional error, or mistake. The director of the department of business
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regulation is hereby authorized to promulgate regulations establishing the minimum insurance
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coverage limits that shall be required; provided, however, that such limits shall not be less than one
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hundred thousand dollars ($100,000) for claims arising out of the same professional service and
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three hundred thousand dollars ($300,000) in the aggregate. The director of the department of

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business regulation is further authorized to establish rules and regulations allowing persons or
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entities with sufficient financial resources to be self-insurers.
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(b) Every licensed healthcare provider in direct patient care within a licensed hospital shall
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obtain liability insurance in a minimum amount determined by the board of trustees of that hospital.
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(a) Every physician, hospital, and healthcare provider shall maintain professional liability
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coverage as a condition of licensure.
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(b) Such coverage shall be obtained from:
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(1) An insurer licensed or approved by the department of business regulation; or
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(2) A self-insurance entity expressly approved by the department of business regulation
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pursuant to the provisions of title 27.
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(c) The department of health shall not issue, renew, or maintain any license unless proof of
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such approved coverage is provided.
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(d) The department of health shall not recognize, approve, or accept any form of
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professional liability coverage that has not been reviewed and approved by the department of
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business regulation.
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(e) Any lapse, suspension, or revocation of such coverage shall constitute grounds for
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licensure action, including suspension or revocation by the department of health.
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SECTION 5. Section 23-17-6 of the General Laws in Chapter 23-17 entitled "Licensing of
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Healthcare Facilities" is hereby amended to read as follows:
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23-17-6. Issuance of license — Posting — Transfer — Conditions.
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(a) Upon receipt of an application for a license, the licensing agency shall issue a license if
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the applicant and healthcare facility meet the requirements established under this chapter and any
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rules and regulations that may be established in accordance with the requirements established under
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this chapter. A license issued under the provisions of this section shall be the property of the state
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and loaned to the licensee, and it shall be kept posted in a conspicuous place on the licensed
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premises. Each license shall be issued only for the premises and persons named in the application,
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and shall not be transferable or assignable except with the written approval of the licensing agency.
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Home nursing-care providers and home-care providers operating under a single license may
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establish branch offices under that same single license and that license shall be maintained and
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posted in the central office.
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(b) Any change in owner, operator, or lessee of a licensed healthcare facility, (except for
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single-practice physician ambulatory-surgery centers, multi-practice physician ambulatory-surgery
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centers, single-practice podiatry ambulatory-surgery centers and multi-practice podiatry
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ambulatory-surgery centers as defined in subsections (17) and (18) of chapter 17, section 2) which

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license shall be transferable or assignable by decision of the licensing agency as shall be provided
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by regulation, shall require prior review by the health services council and approval of the licensing
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agency as a condition precedent to the transfer, assignment, or issuance of a new license. Issuance
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of the license may be made subject to any condition; provided, that no condition may be made
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unless it directly relates to the statutory purpose expressed in § 23-17-3 or to the review criteria set
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forth in § 23-17-14.3. This shall not limit the authority of the licensing agency to require correction
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of conditions or defects which existed prior to the proposed change of owner, operator, or lessee
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and of which notice had been given to the healthcare facility by the licensing agency.
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(c) Issuance of the license shall be conditioned on obtaining and maintaining a medical
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malpractice policy in compliance with § 42-14.1-2 or otherwise being in compliance with § 27-16-
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2.6. If a healthcare facility license fails to maintain such coverage, its license may be denied,
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suspended or revoked pursuant to § 23-17-8.
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SECTION 6. This act shall take effect on January 1, 2027.
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LC006268
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EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO INSURANCE -- UNAUTHORIZED INSURANCE BUSINESS -- MEDICAL
MALPRACTICE INSURANCE
***
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This act would provide for greater oversight and regulation by the department of business
2
regulation on medical-malpractice insurance among self-insured entities.
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This act would take effect on January 1, 2027.
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LC006268
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