S 2721Insurance

Insurance - Child-Serving Provider Liability Joint Underwriting Association

Establishes a mandatory insurance pool to provide liability coverage for child-care providers who cannot obtain it elsewhere.

Held for study

Population
Affected

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Introduced Feb 27, 2026Committee Senate Judiciary

Plain-English Summary

This bill creates a "Joint Underwriting Association" to provide liability insurance to organizations that serve children, such as daycares, foster care agencies, and youth programs. It applies when these providers cannot find affordable insurance in the regular market. All insurance companies selling commercial general liability in Rhode Island must participate. The association will offer coverage for things like bodily injury and sexual abuse liability. If the association loses money, it can assess fees on the insurance companies, which may be offset against their state premium taxes. The Department of Business Regulation oversees the program.

For younger readers

Sometimes, places that take care of kids, like daycares, summer camps, or foster homes, need insurance to stay open. Insurance is like a safety net that pays for accidents if they happen. Right now, some of these places can't find anyone to sell them this safety net. This law makes all the big insurance companies work together to create a special group. This group promises to sell insurance to the kid-care places so they can stay open and keep taking care of children safely.

Who & Where It Applies

Impacted groups

Child care providersInsurance companiesFoster care agenciesBehavioral health servicesParents and families

Impacted communities

All

Constitutional & Fiscal Check

None Likely

Estimated cost

Amount unknown

Estimated revenue

None

Bill Analysis

Both viewpoints

For Progressives

Ensures the survival of essential social services, such as foster care, behavioral health, and early intervention programs, which are often non-profits serving vulnerable populations.
Protecting children and families by mandating that providers have liability coverage, ensuring there is financial recourse and accountability in cases of negligence or abuse.
Prevents market failure from destroying community infrastructure, asserting that the welfare of children is more important than the profitability or risk-aversion of private insurance companies.
Allows insurance companies to offset assessments against their premium tax liability, effectively meaning taxpayers are subsidizing the financial risks taken by these private insurers.
Does not address the root causes of why the private market is abandoning these providers, potentially creating a permanent, segregated high-risk pool rather than fixing the system.
The governance board is heavily weighted toward industry representatives and political appointees, with only one specific "public member" representing child advocacy.

For Conservatives

Prevents the total collapse of the child-care and youth service industry, which is essential for the workforce to function and for the economy to remain stable.
Utilizes a structure involving private insurance companies to manage the risk and claims rather than creating a massive new government agency to provide the insurance directly.
Ensures that victims of negligence or abuse have access to compensation through insurance policies, upholding the principle of restitution and legal responsibility.
Mandates that private businesses (insurers) participate in a specific market association as a condition of doing business, which is a significant infringement on corporate freedom and free enterprise.
Grants the government broad powers to approve rates and forms, interfering with the free market mechanisms that usually determine insurance pricing and risk acceptance.
Creates a "tax offset" mechanism that effectively redistributes public tax revenue to cover private insurance losses, rather than letting the market dictate the true cost of risk.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 150 additions

SECTION 1. Title 27 of the General Laws entitled "INSURANCE" is hereby amended by adding thereto the following chapter: 27-84-1. Declaration of purpose.

(a) The general assembly finds that:

(1) Child-serving providers throughout the state are experiencing significant difficulty in obtaining affordable and adequate liability insurance coverage;

(2) These organizations provide essential services to children and families, including childcare, education, behavioral health services, youth development, mentoring, foster care, and recreational programming;

(3) The lack of available or affordable liability insurance threatens the continued operation of these providers and the health, safety, and welfare of Rhode Island children;

(4) It is in the public interest to ensure the availability of liability insurance coverage for child-serving providers unable to procure such coverage in the voluntary insurance market.

(b) The purpose of this chapter is to establish a joint underwriting association to provide liability insurance coverage to eligible child-serving providers as a market of last resort. This chapter is enacted to provide a mechanism for the equitable apportionment among insurers of the responsibility for insuring eligible child-serving providers who are in good faith entitled to, but are unable to procure, liability insurance coverage through ordinary methods. 27-84-2. Definitions. As used in this chapter:

(1) “Association” means the child-serving organization liability joint underwriting association established pursuant to this chapter.

(2) “Child care provider” or “child-serving provider” means any person, corporation, partnership, nonprofit organization, governmental entity, or other legal entity that is licensed, certified, registered, or otherwise authorized under the laws of the State of Rhode Island to provide care, supervision, treatment, education, behavioral health services, residential services, or other essential services to children under eighteen (18) years of age. Such term shall include, but not be limited to:

(i) Licensed child care centers and family child care homes;

(ii) Group family child care homes and school-age child care programs;

(iii) Early learning, preschool, and pre-kindergarten programs not otherwise operated by a public school district;

(iv) Community-based children’s behavioral health providers including, but not limited to, entities providing outpatient counseling, home-based services, mobile response and stabilization services, intensive in-home treatment, therapeutic mentoring, case management, or similar services;

(v) Residential treatment facilities, group homes, therapeutic foster care agencies, shelter care programs, and other congregate care programs serving minors;

(vi) Providers of early intervention services, developmental disability services, and child welfare services;

(vii) Nonprofit or for-profit organizations that provide after-school programs, enrichment programs, mentoring services, recreational supervision, or structured youth programming; and

(viii) Any other licensed or state-contracted provider whose primary purpose includes the supervision, care, custody, treatment, or support of minors. For purposes of clarity, this definition shall apply regardless of whether services are delivered in a center-based setting, in a residential facility, in a private home, in a community setting, or through mobile or in-home service delivery.

(3) “Department” means the Rhode Island department of business regulation.

(4) “Director” means the director of the department of business regulation, or designee.

(5) “Member insurer” means every insurer authorized to write commercial general liability insurance in this state.

(6) “Net direct premiums” means gross direct premiums written on commercial general liability insurance in this state, less return premiums thereon and dividends paid or credited to policyholders. 27-84-3. Establishment of association -- Mandatory membership.

(a) There is created a nonprofit, unincorporated legal entity to be known as the child- serving provider liability joint underwriting association.

(b) Every insurer authorized to write commercial general liability insurance in this state shall be and remain a member of the association as a condition of its authority to transact such insurance within this state.

(c) The association shall operate pursuant to a plan of operation approved by the director and shall exercise its powers through a board of directors established under the plan.

(d) The association shall operate under the supervision of the department and shall be subject to the applicable provisions of this title. 27-84-4. Governance.

(a) The association shall be governed by a board of directors consisting of:

(1) Four (4) representatives of member insurers, appointed by the director;

(2) Three (3) representatives of child-serving organizations, appointed by the governor;

(3) One public member with experience in child advocacy or risk management, appointed by the governor; and

(4) The director, or designee, who shall serve as an ex officio, nonvoting member.

(b) Board members shall serve terms of three (3) years and may be reappointed.

(c) The board shall adopt bylaws and administer the association in accordance with the approved plan of operation. 27-84-5. Plan of operation.

(a) Within one hundred twenty (120) days after the effective date of this chapter, the association shall submit to the director a proposed plan of operation for approval.

(b) The plan of operation shall provide for:

(1) The establishment of necessary facilities for underwriting, policy issuance, claims handling, and other functions of the association;

(2) Reasonable underwriting standards for determining eligibility;

(3) Procedures for applicants to demonstrate inability to obtain coverage in the voluntary market;

(4) The establishment of rates, rating plans, and policy forms;

(5) The assessment of member insurers to defray losses and expenses;

(6) The investment and management of funds;

(7) The appointment of servicing carriers or third-party administrators; and

(8) Such other provisions as are necessary or proper for the efficient operation of the association.

(d) The plan of operation and any amendments thereto shall be subject to approval by the director. 27-84-6. Coverage.

(a) The association shall make available commercial general liability insurance coverage, including coverage for bodily injury, property damage, personal injury, and sexual abuse and molestation liability, to any eligible child-serving provider that:

(1) Is in compliance with applicable state licensing and regulatory requirements; and

(2) Has been unable, after diligent effort, to obtain substantially equivalent coverage in the voluntary market.

(b) The association may establish reasonable limits of liability, deductibles, exclusions, and underwriting requirements, subject to approval by the director.

(c) Coverage shall be provided only so long as the insured remains unable to obtain coverage in the voluntary market. 27-84-7. Rates.

(a) Rates shall not be excessive, inadequate, or unfairly discriminatory and shall be actuarially sound.

(b) All rates, rating plans, and policy forms shall be filed with and approved by the director prior to use.

(a) If the association’s premiums, investment income, and other revenues are insufficient to pay its losses and expenses, the association shall assess member insurers in proportion to each member’s share of net direct premiums written in this state for commercial general liability insurance during the preceding calendar year.

(b) Assessments shall be subject to approval by the director.

(c) A member insurer may offset any assessment paid against its premium tax liability in this state in a manner and over a period determined by the general assembly. 27-84-9. Powers of the association. The association shall have the power to:

(1) Sue and be sued;

(2) Enter into contracts;

(3) Borrow funds and issue evidence of indebtedness;

(4) Purchase reinsurance;

(5) Invest funds in accordance with § 27-4-27;

(6) Appoint servicing carriers or administrators; and

(7) Perform all acts necessary or proper to effectuate the purposes of this chapter. 27-84-10. Board of directors -- Immunity.

(a) The association shall be governed by a board of directors established pursuant to the plan of operation and approved by the director.

(b) No member of the board of directors, officer of the association, or employee or agent of the association shall be liable in a civil action for any act or omission arising out of the performance of duties pursuant to this chapter; provided that, such person acted in good faith and without willful misconduct or gross negligence.

(c) The association shall indemnify and hold harmless each board member, officer, employee, and agent of the association against all costs, expenses, judgments, and liabilities incurred in connection with any action, suit, or proceeding arising out of the performance of duties under this chapter; provided that, the person acted in good faith and without willful misconduct or gross negligence.

(d) For purposes of chapter 31 of title 9, the association shall be deemed a public instrumentality of the state solely for purposes of the immunity protections set forth in this section. 27-84-11. Examination and oversight. The association shall be subject to examination by the department in the same manner as insurers authorized to transact business in this state. The reasonable costs of examination shall be borne by the association. 27-84-12. Tax status. The association shall be exempt from all state and local taxes except taxes on real and personal property. 27-84-13. Annual report. The association shall submit annually to the director and to the speaker of the house of representatives and the president of the senate a report on its financial condition, underwriting experience, claims activity, and market conditions.

SECTION 2. This act shall take effect upon passage.