Rhode Island Code of Regulations
Title 230 - Department of Business Regulation
Chapter 20 - Insurance
Subchapter 05 - Personal Lines - Automobile and Homeowners Insurance
Part 13 - Property Insurance and Weather Related Claims (230-RICR-20-05-13)
Section 230-RICR-20-05-13.11 - Mediation Program

Universal Citation: 230 RI Code of Rules 20 05 13.11

Current through September 18, 2024

A. Following a hurricane, the Department may issue a Bulletin that subjects all claims under personal lines insurance policies that occurred as a result of damage to residential property caused by a specific hurricane to nonbinding mediation at the election of the insured in accordance with this Part.

1. A Bulletin announcing of the establishment of a mediation program will be related to a specific hurricane and will be posted on the Department's website and sent to all persons who have requested notice of insurance division announcements.

2. The decision as to whether to announce a mediation program due to a specific hurricane will be determined in part by the number and nature of claims in Rhode Island.

3. The Department may announce that the mediation program will include claims to a single property caused by more than one hurricane in twelve (12) month period.

4. Flood insurance claims insured through the National Flood Insurance Program ("NFIP") pursuant to 42 U.S.C. § 4011 et seq. will not be available for participation in the mediation program.

B. Definitions. For purposes of this section the following terms shall have the following meanings:

1. "Administrator" means the entity administering the mediation program as designated by the Department by Bulletin with regard to a specific hurricane. The Department may administer the program itself or with the assistance of other governmental agencies or may enter into a contract with an outside vendor or any combination of these alternatives.

2. "Claim" means an open and unresolved dispute between an insurer and an insured of a personal lines insurance policy arising out of damage to residential property caused by a hurricane and relating to a material issue of fact, except for a dispute with respect to:
a. coverage under the insurance policy;

b. the amount in controversy is less than an amount specified by the Department in the Bulletin establishing the mediation program;

c. a loss has been incurred that was not related to the hurricane; or

d. the denial is based on the nonexistence of the policy at the time of the loss;

3. "Days" means business days.

4. "Insurer" means an insurance company authorized to transact the business of insurance in Rhode Island, a surplus lines insurer transacting business in Rhode Island, the Rhode Island FAIR Plan and a risk retention group operating in Rhode Island.

5. "Mediation" means a procedure in which a mediator facilitates communication between the parties concerning the matters in dispute and explores possible solutions to promote reconciliation, understanding and settlement.

6. "Mediator" means an individual approved by the Department to mediate claims pursuant to this Part.

7. "Parties" means the insurer and the insured.

C. General Requirements

1. The mediation program shall not be operative until issuance of the Department's Bulletin advising of same. The mediation program is not intended to be a substitute for or an appeal from the normal claims process and, as such, the Department will not activate the program until a sufficient period of time, at least ninety (90) days, has passed since the occurrence of the hurricane.

2. All insureds with open and unresolved claims against insurers arising from the designated hurricane may request a mediation conference pursuant to the procedures described below and any additional technical procedures to be established by the Department and announced in the Bulletin establishing the mediation program.

3. Participation in the mediation program by insureds is voluntary and it is their option to request a mediation conference.

4. Insurers licensed to transact business in Rhode Island and the Rhode Island FAIR Plan Part 11 of this Subchapter shall be required to participate in the mediation program and resulting mediation conferences. Surplus lines insurers and risk retention groups may elect whether or not to participate in such mediation conferences on a case-by-case basis.

5. When a mediation program has been activated by the Department under this Part, insurers (other than surplus lines insurers and risk retention groups) shall provide written notice to insureds with open and unresolved claims arising out of damage to residential property caused by a hurricane of the opportunity to request a mediation conference and the process to request a mediation conference, as provided herein. A sample notice for issuance to insureds shall be provided as an attachment to the Bulletin activating the mediation program.

6. Unless otherwise provided herein, the fees of the mediator and the Administrator shall be borne by the insurer, including surplus lines and risk retention groups that opt to participate in the mediation program. All other mediation costs, fees, or expenses shall be borne by the party incurring such costs, fees, or expenses unless otherwise provided in a settlement agreement.

7. The Department shall act as an Administrator for the program alone or with the assistance of other state agencies or may select a private party to act as Administrator on its behalf. The selection of an Administrator along with detailed contact and fee information will be included in the Bulletin issued to establish the mediation program for a particular hurricane.

D. Requests for Mediation

1. Insureds shall be able to request mediation conferences by written request transmitted to the Administrator as detailed in the Bulletin establishing the mediation program. The insured may only request one mediation for each claim with all open and disputed issues related to the claim included in the mediation.

2. Requests for mediation by insureds shall include the following information:
a. Name, address, and daytime telephone number of the insured and location of the property (if applicable and if different from address of insured);

b. The claim number and policy number for the insured at issue;

c. A brief description of the nature of the dispute;

d. The name of the insurer and any contact person at the insurer if known to the insured; and

e. Information with respect to any other policies of insurance that may provide coverage of the insured property for named perils such as flood or windstorm.

3. Upon receipt of a request for mediation, the Administrator shall review same to determine whether the matter satisfies the definition of "claim" above.

4. After review, the Administrator shall notify the insured and the insurer within three (3) days of receipt of the request for mediation that either:
a. the request for a mediation conference is rejected and specify the reason for the rejection, or

b. the request has been accepted. If the insurer is a surplus lines insurer or a risk retention group, the Administrator shall include in the notice a request that the insurer advise the Administrator whether it will participate in a mediation conference within five (5) days of the insurer's receipt of the notice.

E. Scheduling of Mediation Conferences and Mediator Requirements or Disqualification Requests:

1. If the mediation request is accepted, the Administrator shall select a mediator and schedule the mediation conference so as to limit the travel and expense to the parties. The Administrator will notify each party of the date, time and place of the mediation conference at least ten (10) days prior to the date of the conference, unless a shorter period is agreed to by the parties.

2. All mediation conferences shall be scheduled no later than 30 days after receipt of a request for mediation if deemed eligible for participation in the Mediation Program by the Administrator.

3. The Department will establish a list of mediators prior to the issuance of the Bulletin establishing the mediation program. In doing so the Department shall look to the list of mediators utilized by the Rhode Island Superior Court mediation program and shall consider the objectivity and qualifications of the mediators. Qualifications shall include consideration of experience with insurance claims.

4. A party may move to disqualify a mediator for good cause at any time. The request shall be directed to the Administrator if the grounds are known prior to the mediation conference. Good cause includes a conflict of interest between a party and the mediator, inability of the mediator to handle the conference competently, or other reasons that would reasonably be expected to impair the conference.

5. The Department may implement a public outreach program before, during or after the mediation is announced to assist consumers in an understanding of the mediation process.

F. Conduct of Mediation Conferences:

1. The mediator shall provide each party with the opportunity to present their side of the controversy.

2. Every effort shall be made by the mediator to include all issues between the parties in the mediation rather than engage in piecemeal consideration of the issues.

3. Parties may present relevant documents and bring individuals with knowledge of the issues to the mediation conference, such as adjusters, appraisers and contractors. The parties will notify each other and the mediator of the person(s) attending the mediation and the documents to be provided to the mediator five (5) days prior to the date scheduled for the mediation.

4. The mediation will be scheduled for three (3) hours of meeting time. Under extraordinary circumstance and with the agreement of the parties the mediator may engage in a longer mediation or schedule a second meeting.

5. The mediator may meet with the parties separately, encourage meaningful communications and negotiations, and otherwise assist the parties in reaching a settlement.

6. The representative of the insurer attending the mediation conference shall bring a copy of all relevant portions of the policy and the claims file to the conference. He or she shall possess knowledge of the facts and circumstances of the claim, be knowledgeable of the provisions of the applicable policy and have authority to settle the full amount of the claim and to disburse the settlement amount at the conclusion of the mediation conference.

7. The parties may be represented by counsel or public adjusters at the mediation conference provided that five (5) days' notice of the representation is provided to the opposing party and the Administrator or assigned mediator.

8. The mediator may terminate the conference if he or she determines that either party is not negotiating in good faith, (e.g. is continuously disruptive, becomes unduly argumentative or adversarial, or otherwise inhibits the negotiations as determined by the mediator).

9. If the parties achieve an agreement on resolution of the claim at the mediation conference, the resolution shall be memorialized and signed by the parties or their representatives. If the resolution includes payment of settlement funds by the insurer to the insured, the insurer shall disburse the settlement amount to the insured and any lienholder(s) as required by the insurer's business within five (5) days of the settlement agreement, unless both parties agree otherwise.

10. The Department may, at its discretion, have a representative attend and be present at any mediation conference.

G. Post Mediation:

1. The mediation shall be non-binding. However, if a settlement is reached at the mediation conference, the insured shall have three (3) business days within which he or she may rescind any settlement agreement, provided that the insured has not cashed, deposited or otherwise negotiated funds disbursed to him or her for the disputed matters as a result of the mediation conference.

2. If the mediation settlement is rescinded, the insurer is not required to participate in additional mediation on the particular claim under the mediation program.

3. If a settlement agreement is reached and is not rescinded by the insured within three (3) business days as provided above, it shall act as a full and final release of all specific claims that were presented and actually settled at the mediation conference.

4. Mediation conferences shall be confidential. If a settlement agreement is not reached, oral or written statements made during the mediation conference shall not be admissible as evidence in a civil action concerning the claim, except with respect to any proceeding concerning an investigation of insurance fraud. Evidence otherwise admissible in a civil action shall not be excluded merely because it was disclosed during the mediation conference.

H. Mediation Fees and Bills:

1. The fees of the mediator and the Administrator shall be borne by the insurer as provided above unless the insured fails to appear at a scheduled mediation conference and fails to have good cause for the failure to appear. Good cause shall consist of severe illness, injury or other unforeseen and uncontrollable emergency that could not have been reasonably remedied prior to the conference. If the insured fails to present good cause for a failure to appear at the mediation conference, then the costs of the cancelled mediation conference and any rescheduled conference shall be split evenly between the parties.

2. The Administrator shall submit a bill to the insurer for the Administrator and mediator fees of each mediation conference. At the discretion of the Administrator and with the consent of the insurer, alternate billing arrangements are permissible, such as monthly or bulk billings.

3. The bill to the insurer shall be itemized and shall conform to the fee structure set forth in the Department's Bulletin establishing the Mediation Program.

I. Mediation Report

1. The mediator shall submit a report to the Administrator detailing data identified by the Department in its Bulletin announcing the mediation concerning the outcome of the mediation in a format provided by the Administrator.

Disclaimer: These regulations may not be the most recent version. Rhode Island may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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