Rhode Island General Laws Title 27. Insurance § 27-7.1-20. Cost control--Insurers

The director is authorized, at his or her discretion, to conduct audits and investigations to examine the insurer's utilization of adequate programs to control costs or expenses or to collect the appropriate premium charges. On the basis of information submitted in any filing made pursuant to this chapter, or obtained from the department of labor and training and/or by independent investigation, the director shall make a finding whether or not the insurer or insurers employ cost control programs and techniques that meet the standards of the rating agency, or any other standards as may, after notice and a hearing, be approved by the director, which have had or are expected to have a substantial impact on fraudulent claim costs, unnecessary health care costs, and any other unreasonable costs and expenses, and on the collection of the appropriate premium charges owed to the insurer or insurers. If the director does not find adequate utilization of cost control, the director may impose an appropriate penalty not to exceed five percent (5%) of the insurer's annual premium.