Risk retention groups chartered, incorporated, or licensed in states other than this state and seeking to do business as a risk retention group in this state shall file a notice of operation with the commissioner of its intention to do business in this state. The notice shall be filed with the commissioner within 60 days of the filing by the group of any notice filed with its chartering state of its intention to do business in this state, but in no event may a notice of intended operation be filed with the commissioner less than 60 days prior to the group commencing business in this state. In doing business in this state the risk retention group shall observe and abide by the laws of this state including the following:
(a)A risk retention group
shall submit to the commissioner all o
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Risk retention groups chartered, incorporated, or licensed in states other than this state and seeking to do business as a risk retention group in this state shall file a notice of operation with the commissioner of its intention to do business in this state. The notice shall be filed with the commissioner within 60 days of the filing by the group of any notice filed with its chartering state of its intention to do business in this state, but in no event may a notice of intended operation be filed with the commissioner less than 60 days prior to the group commencing business in this state. In doing business in this state the risk retention group shall observe and abide by the laws of this state including the following:
(a)
A risk retention group
shall submit to the commissioner all 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, 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 under subdivision (k) of Section 130.
(2)
A copy of its plan of operations or a feasibility study and revisions of the plan or study submitted to the state in which the risk retention group is chartered and licensed. However, the provision relating to the submission of a plan of operation or a feasibility study does not apply with respect to any line or classification of liability insurance that (A) was defined in the Product Liability Risk Retention Act of 1981 before
October 27, 1986, and (B) was offered before that date by any risk retention group that had been chartered and operating for not less than three years before that date.
(3)
A statement of registration that designates the commissioner as its agent for the purpose of receiving service of legal documents or process.
(4)
A registration filing fee of one thousand one hundred ninety-six dollars ($1,196) shall accompany the statement of registration, which shall be deposited in the Risk Retention Administration Account, which is hereby created within the Insurance Fund. Notwithstanding Section 13340 of the Government Code, moneys in the account are continuously appropriated to the department for purposes of this chapter.
(b)
Any risk retention group within this state shall submit to the commissioner all of the
following:
(1)
Upon commencement of business within this state and annually thereafter, a copy of the group’s annual 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.
(2)
Upon request by the commissioner, a copy of each examination of the risk retention group as certified by the commissioner or public official conducting the examination and all documentation received as part of the examination.
(3)
Upon request by the commissioner, a copy of any outside audit performed with respect to the risk retention group.
(c)
(1)
As authorized under the federal Liability Risk Retention Act of 1986 (15 U.S.C. Sec. 3902
(a)(1)(B)), each risk retention group is liable for the payment of premium taxes and taxes on premiums for business done or located within this state, and shall report to the commissioner the gross premiums written, less returned premiums, on business done within this state. The risk retention group is subject to taxation, and any applicable fines and nonconformance fees related thereto, on the same basis as a foreign admitted insurer. Nonconformance fees shall be paid to the department and deposited in the Risk Retention Administration Account within the Insurance Fund.
(2)
To the extent licensed surplus line brokers are utilized pursuant to Chapter 6 (commencing with Section 1760) of Part 2, they shall report to the commissioner the
premiums for direct business for risks resident or located within this state that those licensees have placed with or on behalf of, a risk retention group not chartered in this state.
(d)
Any risk retention group and its agents and representatives shall comply with Article 6.5 (commencing with Section 790) of Chapter 1 of Part 2.
(e)
Any risk retention group shall comply with the laws of this state regarding deceptive, false, or fraudulent acts or practices. However, if the commissioner seeks an injunction regarding that conduct, the injunction shall be obtained from a court of competent jurisdiction.
(f)
Any risk retention group shall submit to an examination upon request 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.
(g)
Every application form for insurance from a risk retention group and every policy issued by a risk retention group shall contain in 10-point type on the front page and the declaration page, 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.”
(h)
The following acts by a risk retention group are hereby prohibited:
(1)
The solicitation or sale of insurance by a risk retention group to any person who is not eligible for membership in that group.
(2)
The solicitation or sale of insurance by, or operation of, a risk retention group that is in a hazardous financial condition.
(i)
A risk retention group may not offer insurance policy coverage prohibited by Section 533.5 or declared unlawful by the Supreme Court of California.
(j)
The risk retention group shall make its initial registration by filing the materials specified in subdivision (a). The initial registration is valid until December 31 of the year in which it was made, as long as the risk retention group is in compliance with this chapter. To maintain the registration in force, the risk retention group shall continue in compliance with this chapter and shall
file the following items with the commissioner on or before December 31 of each year:
(1)
An annual reporting statement on a form prescribed by the commissioner.
(2)
An annual renewal fee to be determined by the commissioner, limited to the actual cost of administering this section, not to exceed three hundred dollars ($300).
(3)
Any other information required by the commissioner to determine whether the risk retention group is in compliance with the requirements of this chapter.
(k)
The risk retention group shall notify the commissioner in writing of any changes in the information provided according to subdivision (a) within 30 days of the effective date of the change.