15 U.S.C. § 3903 : US Code - Section 3903: Purchasing groups

Search 15 U.S.C. § 3903 : US Code - Section 3903: Purchasing groups

(a) Exemptions from State laws, rules, regulations, or orders
Except as provided in this section and section 3905 of this
title, a purchasing group is exempt from any State law, rule,
regulation, or order to the extent that such law, rule, regulation,
or order would -
(1) prohibit the establishment of a purchasing group;
(2) make it unlawful for an insurer to provide or offer to
provide insurance on a basis providing, to a purchasing group or
its members, advantages, based on their loss and expense
experience, not afforded to other persons with respect to rates,
policy forms, coverages, or other matters;
(3) prohibit a purchasing group or its members from purchasing
insurance on the group basis described in paragraph (2) of this
subsection;
(4) prohibit a purchasing group from obtaining insurance on a
group basis because the group has not been in existence for a
minimum period of time or because any member has not belonged to
the group for a minimum period of time;
(5) require that a purchasing group must have a minimum number
of members, common ownership or affiliation, or a certain legal
form;
(6) require that a certain percentage of a purchasing group
must obtain insurance on a group basis;
(7) require that any insurance policy issued to a purchasing
group or any members of the group be countersigned by an
insurance agent or broker residing in that State; or
(8) otherwise discriminate against a purchasing group or any of
its members.
(b) Scope of exemptions
The exemptions specified in subsection (a) of this section apply
to -
(1) liability insurance provided to -
(A) a purchasing group; or
(B) any person who is a member of a purchasing group; and
(2) the provision of -
(A) liability coverage;
(B) insurance related services; or
(C) management services;
to a purchasing group or member of the group.
(c) Licensing of agents or brokers for purchasing groups
A State may require that a person acting, or offering to act, as
an agent or broker for a purchasing 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.
(d) Notice to State insurance commissioners of intent to do
business
(1) A purchasing group which intends to do business in any State
shall furnish notice of such intention to the insurance
commissioner of such State. Such notice -
(A) shall identify the State in which such group is domiciled;
(B) shall specify the lines and classifications of liability
insurance which the purchasing group intends to purchase;
(C) shall identify the insurance company from which the group
intends to purchase insurance and the domicile of such company;
and
(D) shall identify the principal place of business of the
group.
(2) Such purchasing group shall notify the commissioner of any
such State as to any subsequent changes in any of the items
provided in such notice.
(e) Designation of agent for service of documents and process
A purchasing group shall register with and designate the State
insurance commissioner of each State in which it does business as
its agent solely for the purpose of receiving service of legal
documents or process, except that such requirement shall not apply
in the case of a purchasing group -
(1) which -
(A) was domiciled before April 1, 1986; and
(B) is domiciled on and after October 27, 1986; (!1)
in any State of the United States;
(2) which -
(A) before September 25, 1981, purchased insurance from an
insurance carrier licensed in any State; and
(B) since September 25, 1981, purchases its insurance from an
insurance carrier licensed in any State;
(3) which was a purchasing group under the requirements of this
chapter before October 27, 1986; and
(4) as long as such group does not purchase insurance that was
not authorized for purposes of an exemption under this chapter as
in effect before October 27, 1986.
(f) Purchases of insurance through licensed agents or brokers
acting pursuant to surplus lines laws
A purchasing group may not purchase insurance from a risk
retention group that is not chartered in a State or from an insurer
not admitted in the State in which the purchasing group is located,
unless the purchase is effected through a licensed agent or broker
acting pursuant to the surplus lines laws and regulations of such
State.
(g) State powers to enforce State laws
Nothing in this chapter shall be construed to affect the
authority of any State to make use of any of its powers to enforce
the laws of such State with respect to which a purchasing group is
not exempt under this chapter.
(h) States' authority to sue
Nothing in this chapter shall affect the authority of any State
to bring an action in any Federal or State court.