AN ACT RELATING TO INSURANCE -- RHODE ISLAND LIFE AND HEALTH INSURANCE GUARANTY ASSOCIATION ACT (Requires the Rhode Island life and health insurance guarantee association to be obligated to cover a minimum of five hundred thousand dollars ($500.000) in present value of annuity benefits, including net cash surrender and net cash withdrawal values.)

S3008

2026 -- S 3008
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LC005211
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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 -- RHODE ISLAND LIFE AND HEALTH INSURANCE
GUARANTY ASSOCIATION ACT

Introduced By:
Senator Andrew R. Dimitri

Date Introduced:
March 06, 2026

Referred To:
Senate Commerce
(by request)
It is enacted by the General Assembly as follows:
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SECTION 1. Section 27-34.3-3 of the General Laws in Chapter 27-34.3 entitled "Rhode
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Island Life and Health Insurance Guaranty Association Act" is hereby amended to read as follows:
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27-34.3-3. Coverage and limitations.
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(a) This chapter shall provide coverage for the policies and contracts specified in subsection
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(b) of this section:
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(1) To persons who, regardless of where they reside (except for nonresident certificate
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holders under group policies or contracts), are the beneficiaries, assignees, or payees of the persons
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covered under subsection (a)(2); and
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(2) To persons who are owners of or certificate holders under the policies or contracts
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(other than unallocated annuity contracts, and structured settlement annuities) and in each case
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who:
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(i) Are residents; or
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(ii) Are not residents, but only under all of the following conditions:
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(A) The insurer that issued the policies or contracts is domiciled in this state;
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(B) The states in which the persons reside have associations similar to the association
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created by this chapter; and
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(C) The persons are not eligible for coverage by an association in any other state due to the
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fact that the insurer was not licensed in the state at the time specified in the state’s guaranty

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association law.
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(3) For unallocated annuity contracts set forth in subsection (b), subsections (a)(1) and
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(a)(2) shall not apply, and this chapter shall (except as provided in subsections (a)(5) and (a)(6))
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provide coverage to:
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(i) Persons who are owners of the unallocated annuity contracts if the contracts are issued
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to or in connection with a specific benefit plan whose plan sponsor has its principal place of
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business in this state; and
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(ii) Persons who are owners of unallocated annuity contracts issued to or in connection
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with government lotteries if the owners are residents.
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(4) For structured settlement annuities specified in subsection (b)(1), subsections (a)(1) and
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(a)(2) shall not apply, and this chapter shall (except as provided in subsections (a)(5) and (a)(6))
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provide coverage to a person who is a payee under a structured settlement annuity (or beneficiary
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of a payee if the payee is deceased), if the payee:
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(i) Is a resident, regardless of where the contract owner resides; or
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(ii) Is not a resident, but only under both of the following conditions:
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(A)(I) The contract owner of the structured settlement annuity is a resident; or
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(II) The contract owner of the structured settlement annuity is not a resident but the insurer
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that issued the structured settlement annuity is domiciled in this state; and
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The state in which the contract owner resides has an association similar to the association
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created by this chapter; and
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(B) Neither the payee or beneficiary, nor the contract owner, is eligible for coverage by the
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association of the state in which the payee or contract owner resides.
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(5) This chapter shall not provide coverage to:
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(i) A person who is a payee or beneficiary of a contract owner resident of this state, if the
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payee or beneficiary is afforded any coverage by the association of another state; or
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(ii) A person covered under subsection (a)(3), if any coverage is provided by the association
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of another state to the person.
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(6) This chapter is intended to provide coverage to a person who is a resident of this state
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and, in special circumstances, to a nonresident. In order to avoid duplicate coverage, if a person
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who would otherwise receive coverage under this chapter is provided coverage under the laws of
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any other state, the person shall not be provided coverage under this chapter. In determining the
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application of the provisions of this paragraph in situations where a person could be covered by the
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association of more than one state, whether as an owner, payee, beneficiary, or assignee, this
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chapter shall be construed in conjunction with other state laws to result in coverage by only one

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association.
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(b)(1) This chapter shall provide coverage to the persons specified in subsection (a) for
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direct, nongroup life, health, or annuity policies or contracts and supplemental policies or contracts
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to any of these, for certificates under direct group policies and contracts, and for unallocated annuity
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contracts issued by member insurers, except as limited by this chapter. Annuity contracts and
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certificates under group annuity contracts include, but are not limited to, guaranteed investment
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contracts, deposit administration contracts, unallocated funding agreements, allocated funding
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agreements, structured settlement annuities, annuities issued to or in connection with government
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lotteries, and any immediate or deferred annuity contracts.
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(2) This chapter shall not provide coverage for:
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(i) A portion of a policy or contract not guaranteed by the insurer, or under which the risk
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is borne by the policy or contract owner;
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(ii) A policy or contract of reinsurance, unless assumption certificates have been issued
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pursuant to the reinsurance policy or contract;
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(iii) A portion of a policy or contract to the extent that the rate of interest on which it is
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based, or the interest rate, crediting rate, or similar factor determined by use of an index or other
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external reference stated in the policy or contract employed in calculating returns or changes in
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value:
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(A) Averaged over the period of four (4) years prior to the date on which the member
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insurer becomes an impaired or insolvent insurer under this chapter, whichever is earlier, exceeds
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the rate of interest determined by subtracting two (2) percentage points from Moody’s corporate
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bond yield average averaged for that same four-year (4) period or for such lesser period if the policy
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or contract was issued less than four (4) years before the member insurer becomes an impaired or
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insolvent insurer under this chapter, whichever is earlier; and
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(B) On and after the date on which the member insurer becomes an impaired or insolvent
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insurer under this chapter, whichever is earlier, exceeds the rate of interest determined by
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subtracting three (3) percentage points from Moody’s corporate bond yield average as most recently
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available;
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(iv) A portion of a policy or contract issued to a plan or program of an employer,
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association, or other person to provide life, health, or annuity benefits to its employees, members,
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or others to the extent that the plan or program is self-funded or uninsured, including but not limited
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to benefits payable by an employer, association, or other person under:
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(A) A multiple employer welfare arrangement as defined in 29 U.S.C. § 1144;
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(B) A minimum premium group insurance plan;

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(C) A stop-loss group insurance plan; or
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(D) An administrative services only contract;
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(v) A portion of a policy or contract to the extent that it provides for:
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(A) Dividends or experience rating credits;
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(B) Voting rights; or
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(C) Payment of any fees or allowances to any person, including the policy or contract
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owner, in connection with the service to or administration of the policy or contract;
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(vi) A policy or contract issued in this state by a member insurer at a time when it was not
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licensed or did not have a certificate of authority to issue the policy or contract in this state;
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(vii) An unallocated annuity contract issued to or in connection with a benefit plan
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protected under the federal pension benefit guaranty corporation, regardless of whether the federal
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pension benefit guaranty corporation has yet become liable to make any payments with respect to
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the benefit plan;
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(viii) A portion of unallocated annuity contract that is not issued to or in connection with a
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specific employee, union or association of natural persons benefit plan, or a government lottery;
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(ix) A portion of a policy or contract to the extent that the assessments required by § 27-
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34.3-9 with respect to the policy or contract are preempted by federal or state law;
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(x) An obligation that does not arise under the express written terms of the policy or
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contract issued by the insurer to the contract owner or policy owner, including, without limitation:
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(A) Claims based on marketing materials;
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(B) Claims based on side letters, riders, or other documents that were issued by the insurer
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without meeting applicable policy form filing or approval requirements;
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(C) Misrepresentations of or regarding policy benefits;
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(D) Extracontractual claims; or
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(E) A claim for penalties or consequential or incidental damages;
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(xi) A contractual agreement that establishes the member insurer’s obligations to provide
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a book value accounting guaranty for defined contribution benefit plan participants by reference to
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a portfolio of assets that is owned by the benefit plan or its trustee, which in each case is not an
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affiliate of the member insurer;
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(xii) A portion of a policy or contract to the extent it provides for interest or other changes
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in value to be determined by the use of an index or other external reference stated in the policy or
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contract, but which have not been credited to the policy or contract, or as to which the policy or
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contract owner’s rights are subject to forfeiture, as of the date the member insurer becomes an
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impaired or insolvent insurer under this chapter, whichever is earlier. If a policy’s or contract’s

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interest or changes in value are credited less frequently than annually, then, for purposes of
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determining the values that have been credited and are not subject to forfeiture under this paragraph,
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the interest or change in value determined by using the procedures defined in the policy or contract
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will be credited as if the contractual date of crediting interest or changing values was the date of
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impairment or insolvency, whichever is earlier, and will not be subject to forfeiture;
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(xiii) Any transaction or combination of transactions between a protected cell and the
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general account or another protected cell of a protected cell company organized under chapter 64
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of this title; or
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(xiv) A policy or contract providing any hospital, medical, prescription drug, or other
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healthcare benefits pursuant to Part C or Part D of subchapter XVIII, chapter 7 of title 42 of the
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United States Code (commonly known as Medicare part C & D) or any regulations issued pursuant
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thereto.
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(c) The benefits that the association may become obligated to cover shall in no event exceed
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the lesser of:
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(1) The contractual obligations for which the insurer is liable or would have been liable if
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it were not an impaired or insolvent insurer; or
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(2)(i) With respect to any one life, regardless of the number of policies or contracts:
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(A) Three hundred thousand dollars ($300,000) in life insurance death benefits, but not
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more than one hundred thousand dollars ($100,000) in net cash surrender and net cash withdrawal
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values for life insurance;
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(B) In health insurance benefits:
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(I) One hundred thousand dollars ($100,000) for coverages not considered as disability
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insurance or basic hospital, medical, and surgical insurance or major medical insurance or long-
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term care insurance, including any net cash surrender and net cash withdrawal values;
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(II) Three hundred thousand dollars ($300,000) for disability insurance and three hundred
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thousand dollars ($300,000) for long-term care insurance;
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(III) Five hundred thousand dollars ($500,000) for basic hospital, medical, and surgical
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insurance; or
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(C)
Two hundred fifty thousand dollars ($250,000)

Five hundred thousand dollars
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($500,000)
in the present value of annuity benefits, including net cash surrender and net cash
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withdrawal values;
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(ii) With respect to each individual participating in a governmental retirement plan
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established under § 401, § 403(b), or § 457 of the U.S. Internal Revenue Code, 26 U.S.C. § 401,
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§ 403(b), or § 457, covered by an unallocated annuity contract or the beneficiaries of each such

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individual if deceased, in the aggregate, two hundred fifty thousand dollars ($250,000) in present
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value annuity benefits, including net cash surrender and net cash withdrawal values;
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(iii) With respect to each payee of a structured settlement annuity or beneficiary or
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beneficiaries, of the payee if deceased, two hundred fifty thousand dollars ($250,000) in present
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value annuity benefits, in the aggregate, including net cash surrender and net cash withdrawal
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values if any;
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(iv) However in no event shall the association be obligated to cover more than: (A) an
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aggregate of three hundred thousand dollars ($300,000) in benefits with respect to any one life
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under this subsection (c)(2)(iv) and subsections (c)(2)(i), (c)(2)(ii), and (c)(2)(iii) except with
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respect to benefits for basic hospital, medical, and surgical insurance and major medical insurance
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under subsection (c)(2)(i)(B), in which case the aggregate liability of the association shall not
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exceed five hundred thousand dollars ($500,000) with respect to any one individual; or (B) with
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respect to one owner of multiple nongroup policies of life insurance, whether the policy owner is
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an individual, firm, corporation, or other person, and whether the persons insured are officers,
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managers, employees, or other persons, more than five million dollars ($5,000,000) in benefits,
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regardless of the number of policies and contracts held by the owner;
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(v) With respect to either: (A) one contract owner provided coverage under subsection
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(a)(3)(i); or (B) one plan sponsor whose plans own directly or in trust any one or more unallocated
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annuity contracts not included in subsection (c)(2)(ii), five million dollars ($5,000,000) in benefits,
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irrespective of the number of contracts with respect to the contract owner or plan sponsor. Provided,
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however, in the case of one or more unallocated annuity contracts that are covered contracts under
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this chapter and are owned by a trust or other entity for the benefit of two (2) or more plan sponsors,
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coverage shall be afforded by the association if the largest interest in the trust or entity owning the
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contract or contracts is held by a plan sponsor whose principal place of business is in this state and
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in no event shall the association be obligated to cover more than five million dollars ($5,000,000)
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in benefits with respect to all such unallocated contracts;
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(vi) The limitations set forth in this subsection (c) are limitations on the benefits for which
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the association is obligated before taking into account either its subrogation and assignment rights
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or the extent to which those benefits could be provided out of the assets of the impaired or insolvent
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insurer attributable to covered policies. The costs of the association’s obligations under this chapter
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may be met by the use of assets attributable to covered policies or reimbursed to the association
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pursuant to its subrogation and assignment rights.
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(d) In performing its obligations to provide coverage under § 27-34.3-8, the association
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shall not be required to guarantee, assume, reinsure, or perform, or cause to be guaranteed, assumed,

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reinsured, or performed, contractual obligations of the insolvent or impaired insurer under a
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covered policy or contract that do not materially affect the economic values or economic benefits
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of the covered policy or contract.
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SECTION 2. This act shall take effect upon passage.
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LC005211
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EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO INSURANCE -- RHODE ISLAND LIFE AND HEALTH INSURANCE
GUARANTY ASSOCIATION ACT
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This act would require the Rhode Island life and health insurance guarantee association to
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be obligated to cover a minimum of five hundred thousand dollars ($500,000) in present value of
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annuity benefits, including net cash surrender and net cash withdrawal values.
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This act would take effect upon passage.
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LC005211
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