Rhode Island General Laws 27-46-5. Compulsory associations
(a) No risk retention group shall be required or permitted to join or contribute financially to any insurance insolvency fund, or similar mechanism, in this state, nor shall any risk retention group, or its insureds or claimants against its insureds, receive any benefit from any such fund for claims arising under the insurance policies issued by the risk retention group.
Terms Used In Rhode Island General Laws 27-46-5
- 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) When a purchasing group obtains insurance covering its members’ risks from an insurer not authorized or licensed in this state or a risk retention group, none of these risks, wherever resident or located, shall be covered by an insurance insolvency fund or similar mechanism in this state.
(c) When a purchasing group obtains insurance covering its members’ risks from a member insurer of the Rhode Island insurance insolvency fund, only those risks as are subject to the insolvency fund shall be covered by the insolvency fund.
History of Section.
P.L. 1991, ch. 348, § 1.