42 USC 9673 – Risk retention groups
(a) Exemption
Except as provided in this section, a risk retention group shall be exempt from the following:
(1) A State law, rule, or order which makes unlawful, or regulates, directly or indirectly, the operation of a risk retention group.
(2) A State law, rule, or order which requires or permits a risk retention group to participate in any insurance insolvency guaranty association to which an insurer licensed in the State is required to belong.
(3) A State law, rule, or order which requires any insurance policy issued to a risk retention group or any member of the group to be countersigned by an insurance agent or broker residing in the State.
(4) A State law, rule, or order which otherwise discriminates against a risk retention group or any of its members.
(b) Exceptions
(1) State laws generally applicable
Nothing in subsection (a) shall be construed to affect the applicability of State laws generally applicable to persons or corporations. The State in which a risk retention group is chartered may regulate the formation and operation of the group.
(2) State regulations not subject to exemption
Subsection (a) shall not apply to any State law which requires a risk retention group to do any of the following:
(A) Comply with the unfair claim settlement practices law of the State.
(B) Pay, on a nondiscriminatory basis, applicable premium and other taxes which are levied on admitted insurers and surplus line insurers, brokers, or policyholders under the laws of the State.
(C) Participate, on a nondiscriminatory basis, in any mechanism established or authorized under the law of the State for the equitable apportionment among insurers of pollution liability insurance losses and expenses incurred on policies written through such mechanism.
(D) Submit to the appropriate authority reports and other information required of licensed insurers under the laws of a State relating solely to pollution liability insurance losses and expenses.
(E) Register with and designate the State insurance commissioner as its agent solely for the purpose of receiving service of legal documents or process.
(F) Furnish, upon request, such commissioner a copy of any financial report submitted by the risk retention group to the commissioner of the chartering or licensing jurisdiction.
(G) Submit to an examination by the State insurance commissioner in any State in which the group is doing business to determine the group’s financial condition, if—
(i) the commissioner has reason to believe the risk retention group is in a financially impaired condition; and
(ii) the commissioner of the jurisdiction in which the group is chartered has not begun or has refused to initiate an examination of the group.
(H) Comply with a lawful order issued in a delinquency proceeding commenced by the State insurance commissioner if the commissioner of the jurisdiction in which the group is chartered has failed to initiate such a proceeding after notice of a finding of financial impairment under subparagraph (G).
(c) Application of exemptions
Terms Used In 42 USC 9673
- association: when used in reference to a corporation, shall be deemed to embrace the words "successors and assigns of such company or association" in like manner as if these last-named words, or words of similar import, were expressed. See 1 USC 5
- claim: means a demand in writing for a sum certain. See 42 USC 9601
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- 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 applicable State or Federal law. See 42 USC 9671
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- person: means an individual, firm, corporation, association, partnership, consortium, joint venture, commercial entity, United States Government, State, municipality, commission, political subdivision of a State, or any interstate body. See 42 USC 9601
- pollution liability: means liability for injuries arising from the release of hazardous substances or pollutants or contaminants. See 42 USC 9671
- risk retention group: means any corporation or other limited liability association taxable as a corporation, or as an insurance company, formed under the laws of any State&mdash. See 42 USC 9671
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
- State: means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the Virgin Islands, the Commonwealth of the Northern Marianas, and any other territory or possession over which the United States has jurisdiction. See 42 USC 9671
The exemptions specified in subsection (a) apply to—
(1) pollution liability insurance coverage provided by a risk retention group for—
(A) such group; or
(B) any person who is a member of such group;
(2) the sale of pollution liability insurance coverage for a risk retention group; and
(3) the provision of insurance related services or management services for a risk retention group or any member of such a group.
(d) Agents or brokers
A State may require that a person acting, or offering to act, as an agent or broker for a risk retention group obtain a license from that State, except that a State may not impose any qualification or requirement which discriminates against a nonresident agent or broker.