§431K-3  Risk retention groups not chartered
in this State.  Risk retention groups chartered in states other than this
State and seeking to do business as a risk retention group in this State shall
observe and abide by the laws of this State as follows:



(1)  Before offering insurance in this State, a risk
retention group shall submit to the commissioner:



(A)  A statement identifying the state or
states in which the risk retention group is chartered and licensed as a
liability insurance company, date of chartering, its principal place of
business, and other information, including information on its membership, as
the commissioner of this State may require to verify that the risk retention
group is qualified as a risk retention group;



(B)  A copy of its plan of operations or a
feasibility study and revisions of this plan or study submitted to its state of
domicile; provided that the provision relating to the submission of a plan of
operation or a feasibility study shall not apply with respect to any line or classification
of liability insurance which was:



(i)  Defined in the Product Liability Risk
Retention Act of 1981, 15 U.S.C. §3901 et seq., before October 27, 1986; and



(ii)  Offered before that date by any risk
retention group which had been chartered and operating for not less than three
years before that date; and



(C)  A statement of registration which
designates the commissioner as its agent for the purpose of receiving service
of legal documents or process;



(2)  Any risk retention group doing business in this
State shall submit to the commissioner:



(A)  A copy of the group's financial statement
submitted to the insurance commissioner of its state of domicile, which shall
be certified by an independent public accountant and contain a statement of opinion
on loss and loss adjustment expense reserves made by a member of the American
Academy of Actuaries or a qualified loss reserve specialist under criteria
established by the National Association of Insurance Commissioners;



(B)  A copy of each examination of the risk
retention group as certified by the commissioner or public official conducting
the examination in its state of domicile;



(C)  Upon request by the commissioner, a copy
of any audit performed with respect to the risk retention group; and



(D)  Information as may be required to verify
its continuing qualification as a risk retention group;



(3)  Taxation of risk retention groups shall be as
follows:



(A)  All premiums paid for coverages within
this State to risk retention groups shall be subject to taxation at the same
rate and subject to the same interest, fines, and penalties for nonpayment as
that applicable to risk retention group captives chartered in this State
pursuant to chapter 431, article 19;



(B)  To the extent producers are utilized, the
producers shall report and pay the taxes for the premiums for risks which the
producers have placed with or on behalf of a risk retention group not chartered
in this State; or



(C)  To the extent producers are not utilized
or fail to pay the tax, each risk retention group shall pay the tax for risks
insured within the State; provided that each risk retention group shall report
all premiums paid to it for risks insured within the State;



(4)  Any risk retention group shall comply with
chapter 431, article 13 regarding deceptive, false, or fraudulent acts or
practices, and unfair claims settlement practices; provided that if the
commissioner seeks an injunction regarding such conduct, the injunction shall
be obtained from a court of competent jurisdiction;



(5)  Any risk retention group shall submit to an
examination by the commissioner to determine its financial condition if the
commissioner of the jurisdiction in which the group is chartered has not
initiated an examination or does not initiate an examination within sixty days
after a request by the commissioner of this State.  Any examination shall be
coordinated to avoid unjustified repetition and conducted in an expeditious
manner and in accordance with the National Association of Insurance Commissioners'
Examiner Handbook;



(6)  The following notice shall be printed in ten
point type on the front page of every application for insurance from a risk
retention group, and on the front page and the declaration page of every policy
issued by a risk retention group:



NOTICE



This policy is issued by your risk retention
group.  Your risk retention group may not be subject to all of the insurance
laws and rules of your state.  State insurance insolvency guaranty funds are
not available for your risk retention group;



 



(7)  The following acts by a risk retention group are
prohibited:



(A)  The solicitation or sale of insurance by a
risk retention group to any person who is not eligible for membership in the
group; and



(B)  The solicitation or sale of insurance by, or
operation of, a risk retention group that is in a hazardous financial condition
or is financially impaired;



(8)  No risk retention group shall be allowed to do
business in this State if an insurance company is directly or indirectly a
member or owner of the risk retention group, other than in the case of a risk
retention group all of whose members are insurance companies;



(9)  No risk retention group may offer insurance
policy coverage prohibited by chapter 431 or declared unlawful by the highest
court of this State; and



(10)  A risk retention group not chartered in this
State and doing business in this State shall comply with a lawful order issued
in a voluntary dissolution proceeding or in a delinquency proceeding commenced
by any state insurance commissioner if there has been a finding of financial
impairment after an examination under paragraph (5). [L 1987, c 180, pt of §1;
am L 1989, c 272, §4; am L 1993, c 205, §38; am L 2002, c 155, §98]