Mr. Carcieri's office did not immediately respond to a question regarding the reason his signature was left off the bill.

Under the new law, the commissioner has 30 days to review the rate change and void it at a future date if the commissioner finds it is "inadequate or unfairly discriminatory."

The Property Casualty Insurers Association of America called the adoption "a major step forward" in modernizing the state's insurance regulations.

Frank O'Brien, vice president for the Des Plaines, Ill.-based association and New England regional manager, congratulated the governor and legislators for passage of the law. He also praised state Rep. Brian Patrick Kennedy, D- Hopkinton, Westerly, R.I., chairman of the House Corporations Committee, who was the primary sponsor of the bill. Mr. Kennedy is also chairman of the executive committee for the National Conference of Insurance Legislators.

On the issue of modernization, he said the issue is not just with Rhode Island but all states that require insurance departments to review "minor and mundane" issues on rates and filings instead of allowing them to look at broader issues, such as solvency and market conduct.

"Rhode Island has a good department, but like all departments, they have a limited staff and a limited number of resources," he noted. "They should be allowed to look at the big picture, which will benefit consumers in the long run.

Laura Kersey, American Insurance Association assistant vice president, northeast region, said the legislation "will help modernize the Rhode Island insurance market. It will allow insurers more freedom to react to market conditions and adjust their rates up and down within the flex- band."

She called the measure "a good first step toward a free market approach to insurance regulation that will benefit Rhode Island's consumers by creating a more competitive marketplace and will allow consumers more control over their property and casualty insurance purchases.

"While AIA continues to advocate for a fully free market for insurance products, this is a major step for Rhode Island, moving the state closer to a market-based approach to regulation," Ms. Kersey added.