(a)  All holders of resident insurance producer licenses issued by the insurance division of the department of business regulation of the state of Rhode Island shall, as a condition for obtaining and retaining such license, carry and maintain errors and omissions insurance covering the business activities contemplated, in an amount not less than two hundred fifty thousand dollars ($250,000) per claim and five hundred thousand dollars ($500,000) annual aggregate limit. Authorized insurance producers of a licensed firm may meet the requirements of this section with a policy in the name of the licensed firm insuring each licensee employed by, or associated with, the firm.

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(b)  Licensees shall maintain records and keep copies of all errors and omissions policies issued under this subsection.

(c)  Failure to carry and maintain errors and omissions insurance may result in the suspension or revocation of the resident insurance producer license.

(d)  This section shall not apply to insurance producers that are employed in that capacity directly by insurance companies.

(e)  The department of business regulation may grant a written exemption to any producer who shows that he/she is not engaged in the sale, solicitation or negotiation of insurance. Such exemption shall only be valid while the insurance producer is not engaged in the sale, solicitation or negotiation of insurance.