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

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

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

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

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

(ii)  Offered before that date by any riskretention group which had been chartered and operating for not less than threeyears before that date; and

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

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

(A)  A copy of the group's financial statementsubmitted to the insurance commissioner of its state of domicile, which shallbe certified by an independent public accountant and contain a statement of opinionon loss and loss adjustment expense reserves made by a member of the AmericanAcademy of Actuaries or a qualified loss reserve specialist under criteriaestablished by the National Association of Insurance Commissioners;

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

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

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

(3)  Taxation of risk retention groups shall be asfollows:

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

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

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

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

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

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

NOTICE

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

 

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

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

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

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

(9)  No risk retention group may offer insurancepolicy coverage prohibited by chapter 431 or declared unlawful by the highestcourt of this State; and

(10)  A risk retention group not chartered in thisState and doing business in this State shall comply with a lawful order issuedin a voluntary dissolution proceeding or in a delinquency proceeding commencedby any state insurance commissioner if there has been a finding of financialimpairment 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]