15 U.S.C. § 3901 : US Code - Section 3901: Definitions

Search 15 U.S.C. § 3901 : US Code - Section 3901: Definitions

      (a) As used in this chapter - 
        (1) "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;
        (2) "liability" - 
          (A) means legal liability for damages (including costs of
        defense, legal costs and fees, and other claims expenses)
        because of injuries to other persons, damage to their property,
        or other damage or loss to such other persons resulting from or
        arising out of - 
            (i) any business (whether profit or nonprofit), trade,
          product, services (including professional services),
          premises, or operations, or
            (ii) any activity of any State or local government, or any
          agency or political subdivision thereof; and

          (B) does not include personal risk liability and an
        employer's liability with respect to its employees other than
        legal liability under the Federal Employers' Liability Act (45
        U.S.C. 51 et seq.);

        (3) "personal risk liability" means liability for damages
      because of injury to any person, damage to property, or other
      loss or damage resulting from any personal, familial, or
      household responsibilities or activities, rather than from
      responsibilities or activities referred to in paragraphs (2)(A)
      and (2)(B);
        (4) "risk retention group" means any corporation or other
      limited liability association - 
          (A) whose primary activity consists of assuming, and
        spreading all, or any portion, of the liability exposure of its
        group members;
          (B) which is organized for the primary purpose of conducting
        the activity described under subparagraph (A);
          (C) which - 
            (i) is chartered or licensed as a liability insurance
          company under the laws of a State and authorized to engage in
          the business of insurance under the laws of such State; or
            (ii) 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 such date,
          had certified to the insurance commissioner of at least one
          State that it satisfied the capitalization requirements of
          such State, except that any such group shall be considered to
          be a risk retention group only if it has been engaged in
          business continuously since such date and only for the
          purpose of continuing to provide insurance to cover product
          liability or completed operations liability (as such terms
          were defined in this section before October 27, 1986);

          (D) which does not exclude any person from membership in the
        group solely to provide for members of such a group a
        competitive advantage over such a person;
          (E) which - 
            (i) has as its owners only persons who comprise the
          membership of the risk retention group and who are provided
          insurance by such group; or
            (ii) has as its sole owner an organization which has as - 
              (I) its members only persons who comprise the membership
            of the risk retention group; and
              (II) its owners only persons who comprise the membership
            of the risk retention group and who are provided insurance
            by such group;

          (F) whose members are engaged in businesses or activities
        similar or related with respect to the liability to which such
        members are exposed by virtue of any related, similar, or
        common business, trade, product, services, premises, or
        operations;
          (G) whose activities do not include the provision of
        insurance other than - 
            (i) liability insurance for assuming and spreading all or
          any portion of the similar or related liability exposure of
          its group members; and
            (ii) reinsurance with respect to the similar or related
          liability exposure of any other risk retention group (or any
          member of such other group) which is engaged in businesses or
          activities so that such group (or member) meets the
          requirement described in subparagraph (F) for membership in
          the risk retention group which provides such reinsurance; and

          (H) the name of which includes the phrase "Risk Retention
        Group".(!1)


        (5) "purchasing group" means any group which - 
          (A) has as one of its purposes the purchase of liability
        insurance on a group basis;
          (B) purchases such insurance only for its group members and
        only to cover their similar or related liability exposure, as
        described in subparagraph (C);
          (C) is composed of members whose businesses 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
          (D) is domiciled in any State;

        (6) "State" means any State of the United States or the
      District of Columbia; and
        (7) "hazardous financial condition" means that, based on its
      present or reasonably anticipated financial condition, a risk
      retention group is unlikely to be able - 
          (A) to meet obligations to policyholders with respect to
        known claims and reasonably anticipated claims; or
          (B) to pay other obligations in the normal course of
        business.

      (b) Nothing in this chapter shall be construed to affect either
    the tort law or the law governing the interpretation of insurance
    contracts of any State, and the definitions of liability, personal
    risk liability, and insurance under any State law shall not be
    applied for the purposes of this chapter, including recognition or
    qualification of risk retention groups or purchasing groups.