Rhode Island General Laws 27-46-9. Restrictions on insurance purchased by purchasing groups
(a) A purchasing group may not purchase insurance from a risk retention group that is not chartered in a state or from an insurer not admitted in the state in which the purchasing group is located, unless the purchase is effected through a licensed agent or broker or insurance producer acting pursuant to the surplus lines laws and regulations of that state.
Terms Used In Rhode Island General Laws 27-46-9
- Insurance: means primary insurance, excess insurance, reinsurance, surplus lines insurance, and any other arrangement for shifting and distributing risk, which is determined to be insurance under the laws of this state. See Rhode Island General Laws 27-46-2
- Purchasing group: means any group which:
(i) Has as one of its purposes the purchase of liability insurance on a group basis;
(ii) Purchases the insurance only for its group members and only to cover their similar or related liability exposure, as described in subsection (10)(iii);
(iii) Is composed of members whose business or activities are similar or related with respect to the liability to which members are exposed by virtue of any related, similar, or common business, trade, product, services, premises, or operations; and
(iv) Is domiciled in any state. See Rhode Island General Laws 27-46-2
- Risk retention group: means any corporation or other limited liability association:
(i) Whose primary activity consists of assuming and spreading all, or any portion, of the liability exposure of its group members;
(ii) Which is organized for the primary purpose of conducting the activity described under subsection (11)(i);
(iii) Which:
(A) Is chartered and licensed as a liability insurance company and authorized to engage in the business of insurance under the laws of any state; or
(B) Before January 1, 1985, was chartered or licensed and authorized to engage in the business of insurance under the laws of Bermuda or the Cayman Islands and, before that date, had certified to the insurance commissioner of at least one state that it satisfied the capitalization requirements of that state, except that the group shall be considered to be a risk retention group only if it has been engaged in business continuously since that date and only for the purpose of continuing to provide insurance to cover product liability or completed operations liability, as the terms were defined in the Product Liability Risk Retention Act of 1981 before the date of the enactment of the Liability Risk Retention Act of 1986, Rhode Island General Laws 27-46-2
- State: means any state of the United States or the District of Columbia. See Rhode Island General Laws 27-46-2
(b) A purchasing group which obtains liability insurance from an insurer not admitted in this state or a risk retention group shall inform each of the members of the group which have a risk resident or located in this state that the risk is not protected by an insurance insolvency guaranty fund in this state, and that the risk retention group or the insurer may not be subject to all insurance laws and regulations of this state.
(c) No purchasing group may purchase insurance providing for a deductible or self-insured retention applicable to the group as a whole; coverage may provide for a deductible or self-insured retention applicable to individual members.
(d) Purchases of insurance by purchasing groups are subject to the same standards regarding aggregate limits which are applicable to all purchases of group insurance.
History of Section.
P.L. 1991, ch. 348, § 1.