Terms Used In Rhode Island General Laws > Chapter 27-34 - Rhode Island Property and Casualty Insurance Guaranty Association

• Account: means any one of the three (3) accounts created by §?27-34-6. See Rhode Island General Laws 27-34-5
• Affiliate: means a person, who directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with another on December 31 of the year immediately preceding the date the insurer becomes an insolvent insurer. See Rhode Island General Laws 27-34-5
• Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
• Appeal: A request made after a trial, asking another court (usually the court of appeals) to decide whether the trial was conducted properly. To make such a request is "to appeal" or "to take an appeal." One who appeals is called the appellant.
• Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
• Association: means the Rhode Island insurance guaranty association created under §?27-34-6. See Rhode Island General Laws 27-34-5
• Association similar to the association: means any guaranty association, security fund, or other insolvency mechanism that affords protection similar to that of the association. See Rhode Island General Laws 27-34-5
• Assumed claims transaction: means the following:

  (i)  Policy obligations that have been assumed by the insolvent insurer, prior to the entry of a final order of liquidation, through a merger between the insolvent insurer and another entity obligated under the policies, and for which assumption consideration has been paid to the applicable guaranty associations, if the merged entity is a non-member insurer;

  (ii)  Policy obligations that have been assumed by the insolvent insurer, prior to the entry of a final order of liquidation, pursuant to a plan, approved by the domestic commissioner of the assuming insurer, which:

  (A)  Transfers the direct policy obligations and future policy renewals from one insurer to another insurer; and

  (B)  For which assumption consideration has been paid to the applicable guaranty associations, if the assumption is from a non-member insurer. See Rhode Island General Laws 27-34-5

• Assumption consideration: shall mean the consideration received by a guaranty association to extend coverage to the policies assumed by a member insurer from a non-member insurer in any assumed claims transaction including liabilities that may have arisen prior to the date of the transaction. See Rhode Island General Laws 27-34-5
• Claimant: means any person instituting a covered claim; provided that no person who is an affiliate of the insolvent insurer may be a claimant. See Rhode Island General Laws 27-34-5
• Commissioner: means the director of the department of business regulation or his or her designee. See Rhode Island General Laws 27-34-5
• Complaint: A written statement by the plaintiff stating the wrongs allegedly committed by the defendant.
• Contract: A legal written agreement that becomes binding when signed.
• Control: means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with, or corporate office held by, the person. See Rhode Island General Laws 27-34-5
• Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
• Covered claim: means :

  (i)  An unpaid claim, including one for unearned premiums, submitted by a claimant, which arises out of and is within the coverage and subject to the applicable limits of an insurance policy to which this chapter applies if the insurer becomes an insolvent insurer after the effective date of this chapter and the policy was either issued by the insurer or assumed by the insurer in an assumed claims transaction, and:

  (A)  The claimant or insured is a resident of this state at the time of the insured event; provided, that for entities other than an individual, the residence of a claimant, insured, or policyholder is the state in which its principal place of business is located at the time of the insured event; or

  (B)  The claim is a first-party claim for damage to property with a permanent location in this state. See Rhode Island General Laws 27-34-5

• Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
• Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. ^{Source: U.S. Courts}
• Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
• Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
• Fraud: Intentional deception resulting in injury to another.
• Guarantor: A party who agrees to be responsible for the payment of another party's debts should that party default. ^{Source: OCC}
• in writing: include printing, engraving, lithographing, and photo-lithographing, and all other representations of words in letters of the usual form. See Rhode Island General Laws 43-3-16
• Indemnification: In general, a collateral contract or assurance under which one person agrees to secure another person against either anticipated financial losses or potential adverse legal consequences. ^{Source: FDIC}
• Insolvent insurer: means an insurer licensed to transact insurance in this state either at the time the policy was issued; when the obligation with respect to the covered claim was assumed under an assumed claims transaction; or when the insured event occurred, and against whom a final order of liquidation has been entered after the effective date of this chapter with a finding of insolvency by a court of competent jurisdiction in the insurer's state of domicile. See Rhode Island General Laws 27-34-5
• Insured: means any named insured, any additional insured, any vendor, lessor, or any other party identified as an insured under the policy. See Rhode Island General Laws 27-34-5
• Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
• Lawsuit: A legal action started by a plaintiff against a defendant based on a complaint that the defendant failed to perform a legal duty, resulting in harm to the plaintiff.
• Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
• Line of credit: means an irrevocable stand-by commitment whereby the association or member insurer and a qualified financial institution or group of qualified financial institutions enter into a formal and binding contract in which the qualified financial institution or group of qualified financial institutions agree to lend a certain amount of money within a stated period of time. See Rhode Island General Laws 27-34-5
• Member insurer: means any person who:

  (A)  Writes any kind of insurance to which this chapter applies, under §?27-34-3, including the exchange of reciprocal or interinsurance contracts;

  (B)  Is licensed to transact insurance in this state; and

  (C)  Is not otherwise excepted from membership by statute or regulation. See Rhode Island General Laws 27-34-5

• Net direct written premiums: means direct gross premiums written in this state on insurance policies to which this chapter applies, including policy and membership fees, less the following amounts: (i) Return premiums; (ii) Premiums on policies not taken; and (iii) Dividends paid or credited to policyholders on that direct business. See Rhode Island General Laws 27-34-5
• Novation: means that the assumed claim or policy obligations became the direct obligations of the insolvent insurer through consent of the policyholder and that thereafter the ceding insurer or entity initially obligated under the claims or policies is released by the policyholder from performing its claim or policy obligations. See Rhode Island General Laws 27-34-5
• Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
• Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
• Person: means any individual, aggregation of individuals, corporation, partnership, or other entity. See Rhode Island General Laws 27-34-5
• Personal property: All property that is not real property.
• Receiver: means liquidator, rehabilitator, conservator, or ancillary receiver, as the context requires. See Rhode Island General Laws 27-34-5
• Self-insurer: means a person that covers its liability through a qualified individual or group self-insurance program or any other formal program created for the specific purpose of covering liabilities typically covered by insurance. See Rhode Island General Laws 27-34-5
• Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
• Statute: A law passed by a legislature.
• Venue: The geographical location in which a case is tried.
• Verdict: The decision of a petit jury or a judge.