Risk retention groups chartered and licensed in states other than this state and seeking to do business as a risk retention group in this state shall comply with the laws of this state as follows:
(1)NOTICE OF OPERATIONS AND DESIGNATION OF COMMISSIONER AS AGENT.
a. Before offering insurance in this state, a risk retention group shall submit to the commissioner both of the following:
1. A statement identifying the state or states in which the risk retention group is chartered and licensed as a liability insurance company, charter date, 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 pursuant to subdivision (11) of Section 27-31A-2.
2. A copy of
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Risk retention groups chartered and licensed in states other than this state and seeking to do business as a risk retention group in this state shall comply with the laws of this state as follows:
(1) NOTICE OF OPERATIONS AND DESIGNATION OF COMMISSIONER AS AGENT.
a. Before offering insurance in this state, a risk retention group shall submit to the commissioner both of the following:
1. A statement identifying the state or states in which the risk retention group is chartered and licensed as a liability insurance company, charter date, 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 pursuant to subdivision (11) of Section 27-31A-2.
2. A copy of its plan of operations or feasibility study and revisions of the plan or study submitted to the state in which the risk retention group is chartered and licensed, provided that the provision relating to the submission of a plan of operation or feasibility study shall not apply with respect to any line or classification of liability insurance which was both:
(i) Defined in the Product Liability Risk Retention Act of 1981 before October 27, 1986.
(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.
b. The risk retention group shall submit a copy of any revision to its plan of operation or feasibility study required by subsection (b) of Section 27-31A-3 at the same time that the revision is submitted to the commissioner of its chartering state.
c. The risk retention group shall designate the commissioner as its agent for the purpose of receiving service of legal documents or process with a statement of registration, for which a filing fee shall be determined by the commissioner.
(2) FINANCIAL CONDITION. Any risk retention group doing business in this state shall submit to the commissioner all of the following:
a. A copy of the group’s financial statement submitted to the state in which the risk retention group is chartered and licensed 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.
c. Upon request by the commissioner, a copy of any information or document pertaining to any outside audit performed with respect to the risk retention group.
d. Information as may be required to verify its continuing qualification as a risk retention group pursuant to subdivision (11) of Section 27-31A-2.
(3) TAXATION.
a. Each risk retention group shall be liable for the payment of premium taxes and taxes on premiums of direct business for risks resident or located within this state, and shall report to the commissioner the net premiums written for risks resident or located within this state. The risk retention group shall be subject to taxation, and any applicable fines and penalties related thereto, on the same basis as a foreign admitted insurer.
b. To the extent licensed agents or brokers are utilized pursuant to Section 27-31A-12, they shall report to the commissioner the premiums for direct business for risks resident or located within this state which the licensees have placed with or on behalf of a risk retention group not chartered in this state.
c. To the extent that insurance agents or brokers are utilized pursuant to Section 27-31A-12, any agent or broker shall keep a complete and separate record of all policies procured from each risk retention group, which record shall be open to examination by the commissioner, as provided in Section 27-2-20. These records shall, for each policy and each kind of insurance provided thereunder, include the following:
1. The limit of liability.
2. The time period covered.
3. The effective date.
4. The name of the risk retention group which issued the policy.
5. The gross premium charged.
6. The amount of return premiums, if any.
(4) COMPLIANCE WITH TRADE PRACTICES LAW. Any risk retention group, its agents, and representatives shall comply with the Trade Practices Law, Chapter 12 (commencing with Section 27-12-1), Title 27, regarding deceptive, false, or fraudulent acts or practices. If the commissioner seeks an injunction regarding that conduct, the injunction shall be obtained from a court of competent jurisdiction.
(5) EXAMINATION REGARDING FINANCIAL CONDITION. 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 and licensed has not initiated an examination or does not initiate an examination within 60 days after a request by the commissioner of this state. The examination shall be coordinated to avoid unjustified repetition and conducted in an expeditious manner and in accordance with the Examiner Handbook of the National Association of Insurance Commissioners.
(6) NOTICE TO PURCHASERS. Every application form for insurance from a risk retention group, and every policy, on its front and declaration pages, issued by a risk retention group, shall contain in ten point type the following notice:
“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 regulations of your state. State insurance insolvency guaranty funds are not available for your risk retention group.”
(7) PROHIBITED ACTS REGARDING SOLICITATION OR SALE. 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.
b. The solicitation or sale of insurance by, or operation of, a risk retention group that is in hazardous financial condition or financially impaired.
(8) PROHIBITION ON OWNERSHIP BY AN INSURANCE COMPANY. No risk retention group shall be allowed to do business in this state if an insurance company, other than an alien insurance company which is an affiliated risk retention group, captive insurer, as defined in Chapter 31B, or policyholder-owned company that does no insurance business other than to reinsure the risks of its wholly-owned risk retention group, 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) PROHIBITED COVERAGE. The terms of any insurance policy issued by any risk retention group shall not provide, or be construed to provide, coverage prohibited generally by statute of this state or declared unlawful by the highest court of this state whose law applies to that policy.
(10) DELINQUENCY PROCEEDINGS. 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 a state insurance commissioner if there has been a finding of financial impairment after an examination under subdivision (5).
(11) PENALTIES. A risk retention group that violates this chapter will be subject to fines and penalties including revocation of its right to do business in this state, applicable to licensed insurers generally.
(12) OPERATION PRIOR TO ENACTMENT OF THIS CHAPTER. In addition to complying with this section, any risk retention group operating in this state prior to enactment of this chapter shall, within 30 days after May 17, 1993, comply with paragraph a. of subdivision (1) of this section.