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Supreme Court
No.   2006-52-Appeal.
(PB 03-2227)
A. Michael Marques, Director                                          :
of Department of Business Regulation
v.                                                                    :
Pawtucket Mutual Insurance                                            :
Company et al.
NOTICE:    This  opinion  is  subject  to  formal  revision  before
publication in the Rhode Island Reporter.  Readers are requested to
notify the Opinion Analyst, Supreme Court of Rhode Island, 250
Benefit Street, Providence, Rhode Island 02903, at Telephone 222-
3258 of any typographical or other formal errors in order that
corrections  may  be  made  before  the  opinion  is  published.




Supreme Court
No.   2006-52-Appeal.
(PB 03-2227)
A. Michael Marques, Director                                                                        :
of Department of Business Regulation
v.                                                                                                  :
Pawtucket Mutual Insurance                                                                          :
Company et al.
Present:  Williams, C.J., Goldberg, Flaherty, Suttell, and Robinson, JJ.
O P I N I O N
Justice  Robinson  for  the  Court.    The  appellants,  Rhode  Island  FAIR  plan  and
Massachusetts FAIR plan (appellants or FAIR Plans),1 appeal to this Court from a judgment
approving a plan of sale for Pawtucket Mutual Insurance Company (PMIC) and its subsidiary,
Narragansett  Bay  Insurance  Company  (NBIC),  which plan was prepared by the insurance
rehabilitator, A. Michael Marques (Marques or the Rehabilitator),2 and which provided in part
that the Rehabilitator could defer certain payments owed to the appellants.
This case came before this Court for oral argument on January 24, 2007, pursuant to an
order directing the parties to appear and show cause why the issues raised in this appeal should
not be summarily decided.  After hearing the oral arguments and reviewing the legal memoranda
filed by the parties, we are of the opinion that this appeal may be decided at this time, without
1                                                                                                   Although neither Rhode Island FAIR plan nor Massachusetts FAIR plan was a named
party to the action giving rise to this appeal, the record indicates that both entities filed
objections in the Superior Court to the Petition for Instructions Regarding Deferral of Payments
of FAIR Plan Liabilities filed by A. Michael Marques.
2                                                                                                   The original Rehabilitator in this case was Marilyn Shannon McConaghy.   Mr. Marques
was appointed as successor Rehabilitator in January of 2005.   For the sake of clarity, we will
refer to him as the Rehabilitator throughout this opinion.
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further briefing or argument.   For the reasons set forth herein, we deny the appeal and affirm the
judgment of the Superior Court.
Facts and Travel
The Rhode Island and Massachusetts FAIR Plans are funds statutorily established for the
purpose of providing basic property insurance to persons who would otherwise be unable to
obtain it.3  The Rhode Island FAIR Plan was established pursuant to G.L. 1956 chapter 33 of title
27 and is administered by the Rhode Island Joint Reinsurance Association.   The Massachusetts
FAIR  Plan,  which  is  administered  by  the  Massachusetts  Property  Insurance  Underwriting
Association, was established pursuant to Mass. Gen. Laws Ann. ch. 175C, § 4 (West 1998).
All licensed insurers in Rhode Island and Massachusetts are required to participate in the
FAIR Plans as a condition of their license to write insurance policies.   Participation in the FAIR
Plans involves payment by the licensed insurers of the amount assessed by the entity responsible
for administering the respective state’s FAIR Plan.   The assessments are calculated on the basis
of the amount of the premiums on policies the insurer has written in the preceding year.   See
§ 27-33-6; Mass. Gen. Laws Ann. ch. 175C, § 4(e).
In accordance with their statutory authority, appellants assessed both PMIC and NBIC
annually for the proportionate amounts due to the FAIR Plans.   On May 1, 2003, because the
condition of PMIC and NBIC was “financially hazardous to their policyholders, their creditors
and/or the public,” the companies were placed into rehabilitation pursuant to the Rhode Island
Insurers’  Rehabilitation  and  Liquidation  Act,  G.L.                                               1956  chapter                                                                       14.3  of  title   27   (the
Rehabilitation Act), by an order of the Superior Court.   The order of rehabilitation allowed the
3                                                                                                     The acronym FAIR stands for Fair Access to Insurance Requirements.  See G.L. 1956
§ 27-33-2.
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Rehabilitator to take any action necessary and appropriate to reform and revitalize PMIC and
NBIC.
The Rehabilitator subsequently determined that the conversion of PMIC from a mutual
company to a stock company would be an appropriate way to revitalize PMIC and NBIC, by
allowing the company to raise capital through the sale of stock.   On August  14,  2003, the
Superior Court granted the Rehabilitator the authority to convert PMIC into a stock company to
be called Pawtucket Insurance Company (PIC).   The Rehabilitator and his staff then focused
their efforts on identifying a potential buyer of PIC as a stock company.
Thereafter, the Rehabilitator entered into an agreement with Blackstone Financial Group,
Inc. (Blackstone), pursuant to which Blackstone agreed to purchase PIC as a stock company and
to assume all of its liabilities as of the date of the sale.   The sale would enable PIC to operate as
an insurance company with a new infusion of capital in the amount of  $5 million.    The
Rehabilitator then filed a petition for instructions to make effective the previously authorized
conversion, which petition was granted by the Superior Court on August 25, 2005.
On that same day, in an effort to facilitate the sale to Blackstone, the Rehabilitator filed a
petition for instructions to defer PMIC and NBIC payments of FAIR plan assessments and to
instead deposit the funds in a special trust.4  Over the objection of the FAIR Plans, on September
4                                                                                                        According to appellants, the outstanding assessments due to the Rhode Island FAIR Plan
for the years 1998, 1999, and 2000 total $80,661.22.   The appellants also contend that there are
additional outstanding assessments for the years                                                         2001  through June  30,  2005, which total
$53,039.76.
With respect to the assessments due to the Massachusetts FAIR Plan, appellants contend
that the amount outstanding for the years 1995 and 1996 totals $341,428.50.   According to
appellants, the amount outstanding for the years 1997 through June 30, 2005 totals $107,832.63.
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30, 2005, the Superior Court entered orders approving the deferral of FAIR Plan payments.5  The
appellants then filed a timely notice of appeal.
Standard of Review
This Court reviews questions of statutory interpretation de novo.  Silva v. Fitzpatrick, 913
A.2d 1060, 1063 (R.I. 2007); Park v. Rizzo Ford, Inc., 893 A.2d 216, 221 (R.I. 2006).   In
conducting that review, we abide by the principle that “when the language of a statute is clear
and unambiguous, this Court must interpret the statute literally and must give the words of the
statute their plain and ordinary meanings.”   Accent Store Design, Inc. v. Marathon House, Inc.,
674 A.2d 1223, 1226 (R.I. 1996); see also State v. Santos, 870 A.2d 1029, 1032 (R.I. 2005).6
When we are confronted with contentions as to what the General Assembly intended, we are
mindful of the maxim that “[t]he plain statutory language is the best indicator of legislative
intent.”   Santos, 870 A.2d at 1032; see also Martone v. Johnston School Committee, 824 A.2d
426, 431 (R.I. 2003).
Analysis
The appellants argue that the Superior Court erroneously interpreted the Rehabilitator’s
statutory authorization to take any action                                                              “deemed necessary or appropriate to reform and
revitalize the insurer” as permitting acts that appellants contend are contrary to specific state law
requirements, as well as to federal law.   While appellants concede that the Rehabilitator has
broad  power  to  formulate  and  propose  rehabilitation  plans  for  Rhode  Island  insurance
5                                                                                                       The sale to Blackstone was thereafter consummated, and the insurer emerged from
rehabilitation.
6                                                                                                       Of course, when we apply the plain meaning rule, “we remain mindful of the corollary
principle that we ‘will not construe a statute to reach an absurd result.’”   State v. Santos, 870
A.2d 1029, 1032 n. 5 (R.I. 2005) (quoting Kaya v. Partington, 681 A.2d 256, 261 (R.I. 1996)).
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companies, they argue that there is no specific provision of the Rehabilitation Act and no other
statutory authority that allows the Rehabilitator to defer payments required by state and federal
law.
It is our opinion that deferring payments from PIC to the FAIR Plans was within the
broad statutory authority granted to the Rehabilitator under § 27-14.3-18(d).   Pursuant to that
section, “[t]he rehabilitator may take any action that he or she deems necessary or appropriate to
reform and revitalize the insurer.”  Section 27-14.3-18(d). 7  In addition, § 27-14.3-1(c) explicitly
states that the Rehabilitation Act “shall be liberally construed to effect the purpose stated in
subsection (d) of this section.”   Moreover, subsection (d) of § 27-14.3-1 sets forth the legislative
purpose; it reads, in pertinent part, as follows:
“The  purpose  of  this  chapter  is  the  protection  of  the
interests of insured, claimants, creditors, and the public generally
with minimum interference with the normal prerogatives of the
owners and managers of insurers, through:
“(1)  Early detection of any potentially dangerous condition
in an insurer, and prompt application of appropriate corrective
measures * * *.”
The appellants argue that there is a conflict between § 27-14.3-18(d), which gives the
Rehabilitator the general authority to take steps necessary to revitalize an insurer, and § 27-33-6,
which requires insurers to participate in the FAIR Plans.  Citing G.L. 1956 § 43-3-26,8 appellants
7                                                                                                       It is not at all unprecedented for a legislature to authorize sweeping relief measures in
order to cope with a critical economic situation.  See, e.g., Home Building & Loan Association v.
Blaisdell, 290 U.S. 398, 439-40 (1934).
8                                                                                                       General Laws 1956 § 43-3-26 states:
“Wherever a general provision shall be in conflict with a special
provision relating to the same or to a similar subject, the two (2)
provisions shall be construed, if possible, so that effect may be
given to both; and in those cases, if effect cannot be given to both,
the special provision shall prevail and shall be construed as an
exception to the general provision.”
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further contend that, because the conflicting statutes cannot be reconciled, the more specific
statute—which appellants assert is § 27-33-6—should prevail and the Rehabilitator should not be
permitted to defer the payments required by that statute.
We are not persuaded that § 27-14.3-18(d) and § 27-33-6 are so diametrically opposed to
each other as to require the former to give way to the latter.   We believe that the two provisions
can be harmonized without doing violence to logic or language.   Section 27-33-6 requires only
that insurers participate in the FAIR Plans; nowhere does it state that a deferral of the payments
required for participation is impermissible.   When we turn to § 27-14.3-18(d), we observe that,
using clear and unmistakable language, the General Assembly has expressly conferred broad
authority  upon  the  Rehabilitator  to                                                               “take  any  action  that  he  or  she  deems  necessary  or
appropriate to reform and revitalize the insurer.”  Id. (emphasis added).
In the instant case, the Rehabilitator determined that the action necessary to avoid
insolvency was the deferral of payments to the FAIR Plans for a period of not greater than five
years.    This action did not exempt PMIC and NBIC from participation in the FAIR Plans
altogether.   The deferral of payments to the FAIR Plans has given effect to the purpose of the
statute by preventing an otherwise imminent insolvency, thereby protecting the interests of
insured parties, claimants, creditors, and the public.
We would also note that a likely alternative to deferring payments to the FAIR Plans was
insolvency; and, if PMIC and NBIC were insolvent, they would be exempt from making
payments to the FAIR Plans.9   Under that scenario, appellants would receive nothing.   The
Rehabilitator’s action in this case keeps open the real possibility that appellants will ultimately
receive payments.   In addition, it furthers the goal of reforming and revitalizing the insurer.
9                                                                                                     See G.L. 1956 § 27-33-8.
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Consequently, we hold that the Rehabilitator did not exceed the scope of his authority by
deferring payments to the FAIR Plans.
Conclusion
For the reasons set forth in this opinion, we affirm the judgment of the Superior Court.
The record may be remanded to the Superior Court.
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COVER SHEET
TITLE OF CASE:   A. Michael Marques, Director of Department of Business
Regulation v. Pawtucket Mutual Insurance Company et al.
DOCKET NO:                                                                2006-52-Appeal
COURT:                                                                    Supreme
DATE OPINION FILED:   February 19, 2007
Appeal from
SOURCE OF APPEAL:    Superior                                             County:    Providence
JUDGE FROM OTHER COURT:      Judge Michael A. Silverstein
WRITTEN BY:      Justice William P. Robinson, III, for the Court
ATTORNEYS:
For Petitioner (DBR),  Robert Fine, Esq.
ATTORNEYS:
For Respondent (Pawtucket Mutual), Robert Taylor, Esq.
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