Prohibits dental insurers from refusing to honor directions to pay from insured, modifying benefits to be paid. Requires providers to accept payment by virtual credit card as unfair claims practices.
S0905 amends Rhode Island’s Unfair Claims Settlement Practices Act to add a new set of insurer conduct rules, with a major focus on dental claims and payment practices. The bill makes it an unfair claims practice for a dental insurer to refuse to honor a properly executed “direction to pay” from an insured or claimant directing payment to a dental provider. It also bars insurers from reducing or modifying the benefit amount paid directly to the provider, while allowing the insurer to review provider records limited to verifying that the service was actually rendered.
Beyond dental claims, the bill substantially expands the list of practices deemed unfair in insurance claims handling, especially for auto body repair and property damage claims. It adds or clarifies rules on direct payment to rental car companies, auto body shops, and restoration companies; appraisal timing and licensing requirements; use of repair manuals and estimating systems; payment for OEM-required procedures and sublet services; total loss determinations; and treatment of public adjuster fee directions to pay. It also prohibits contracts that require dental providers to accept virtual credit card payments only, and requires insurers to offer alternative payment methods without charging fees for access to claims data or payment processing.
The bill’s impact on state law would be to broaden regulatory standards for insurers operating in Rhode Island and to create additional statutory protections for insureds, claimants, auto repair businesses, restoration contractors, public adjusters, and dental providers. It applies to domestic, foreign, and alien insurers when settling claims involving Rhode Island-registered vehicles repaired in Rhode Island and dental services in Rhode Island, regardless of where the policy was issued. It would also limit insurer discretion in claims settlement practices by making noncompliance an unfair claims practice under the existing enforcement framework.
The general sentiment reflected by the bill text is consumer- and provider-protective, with the legislation aiming to reduce insurer control over payment routing and claims handling. The bill appears designed to address complaints from dental providers and auto repair stakeholders about delayed payments, payment method restrictions, and insurer-imposed pricing or repair limitations. No committee transcript or vote record is available here, so there is no recorded floor or committee sentiment beyond the bill’s protective structure and sponsor list.
The main points of contention likely involve insurer opposition to mandatory direct-pay rules, limits on payment adjustments, and restrictions on virtual credit card use, since these provisions reduce insurer leverage over payment terms and administrative costs. Auto body repair provisions may also be controversial because they constrain insurer appraisal practices, require faster inspections, and limit the ability to steer repairs to preferred shops. The bill preserves some insurer rights to challenge coverage and charges, but the overall balance clearly favors insureds and service providers over insurer flexibility.
S0905 would amend chapter 27-9.1 by expanding the statutory definition of “unfair claims practices” and making those new practices enforceable under Rhode Island insurance law. It would directly affect insurers, dental service providers, auto body repair shops, restoration companies, rental car companies, public adjusters, and insureds/claimants by regulating how claims are paid, how quickly appraisals and responses must occur, and what payment methods insurers may require. The bill also reaches insurers regardless of domicile when the claim involves Rhode Island vehicles repaired in-state or dental services in Rhode Island.
The bill appears generally favorable toward consumers and providers, with a strong regulatory tone aimed at curbing insurer practices viewed as delaying payment or steering claim handling. Because there are no committee transcripts or votes provided, there is no documented opposition or support in the record here, but the structure of the bill suggests support from dental providers, auto repair interests, and consumer advocates, and likely resistance from insurers and claims administrators.
The most notable contention points are the new dental “direction to pay” mandate, the ban on limiting payment to virtual credit cards, and the prohibition on modifying benefit amounts paid directly to providers. Insurers may also object to the expanded auto repair rules, including appraisal deadlines, restrictions on manual/system changes, required compensation for OEM and sublet procedures, and limits on total-loss determinations. These provisions shift bargaining power away from insurers and toward providers and policyholders, which is likely where the strongest disagreement would arise.