§ 26.1-46-01 — Definitions

As used in this chapter:
1. "Commissioner" means the North Dakota insurance commissioner or the
commissioner, director, or superintendent of insurance in any other state.
2. "Completed operations liability" means liability arising out of the installation,
maintenance, or repair of any product at a site which is not owned or controlled by any
person who performs that work or any person who hires an independent contractor to
perform that work, but includes liability for activities which are completed or
abandoned before the date of the occurrence giving rise to the liability.
3. "Domicile", for purposes of determining the state in which a purchasing group is
domiciled, means:
a. For a corporation or limited liability company, the state in which the purchasing
group is incorporated or organized.
b. For an entity which is not a corporation or limited liability company, the state of its
principal place of business.
4. "Hazardous financial condition" means that, based on its present or reasonably
anticipated financial condition, a risk retention group, although not yet financially
impaired or insolvent, is unlikely to be able to do either of the following:
a. To meet obligations to policyholders with respect to known claims and reasonably
anticipated claims.
b. To pay other obligations in the normal course of business.
5. "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 the laws of this state.
6. a. "Liability" 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, including contractual claims
and expenses, to such other persons resulting from or arising out of either of the
following:
(1) Any business whether profit or nonprofit, trade, product, services including
professional services, premises, or operations.
(2) Any activity of any state or local government, or any agency or political
subdivision thereof.
b. The term does not include personal risk liability and an employer's liability with
respect to its employees other than legal liability under the federal Employer's
Liability Act [45 U.S.C. 51 et seq.].
7. "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 subsection 6.
8. "Plan of operation or a feasibility study" means an analysis which presents the
expected activities and results of a risk retention group, including, at a minimum, all of
the following:
a. For each state in which it intends to operate, the coverages, deductibles,
coverage limits, rates, and rating classification systems for each line of insurance
the group intends to offer.
b. Historical and expected loss experience of the proposed members and national
experience of similar exposures to the extent that this experience is reasonably
available.
c. Pro forma financial statements and projections.
d. Appropriate opinions by a qualified independent casualty actuary, including a
determination of minimum premium or participation levels required to commence
operations and to prevent a hazardous financial condition.

e. Identification of management, underwriting and claims procedures, marketing
methods, managerial oversight methods, reinsurance agreements, and
investment policies.
f. Such other matters as may be prescribed by the commissioner for liability
insurance companies authorized by the insurance laws of the state in which the
risk retention group is chartered.
g. Information sufficient to verify that its 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.
h. Identification of each state in which the risk retention group has obtained, or
sought to obtain, a charter and license, and a description of its status in each
such state.
9. "Product liability" means liability for damages because of any personal injury, death,
emotional harm, consequential economic damage, or property damage, including
damages resulting from the loss of use of property, arising out of the manufacture,
design, importation, distribution, packaging, labeling, lease, or sale of a product, but
does not include the liability of any person for those damages if the product involved
was in the possession of such a person when the incident giving rise to the claim
occurred.
10. "Purchasing group" means any group which meets all of the following:
a. The group has as one of its purposes the purchase of liability insurance on a
group basis.
b. The group purchases insurance only for its group members and only to cover
their similar or related liability exposure, as described in subdivision c.
c. The group is composed of members whose business 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.
d. The group is domiciled in any state.
11. "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 subdivision a.
c. Which is chartered and licensed as a liability insurance company and authorized
to engage in the business of insurance under the laws of any state; or, 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 that 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 the Product Liability Risk Retention Act of
1981 before the date of the enactment of the Liability Risk Retention Act of 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 has as its owners only persons who comprise the membership of the risk
retention group and who are provided insurance by such group, or has as its sole
owner an organization which has as its members only persons who comprise the
membership of the risk retention group and 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 of 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:
(1) Liability insurance for assuming and spreading all or any portion of the
liability of its group members.
(2) Reinsurance with respect to the liability of any other risk retention group or
any members of such other group which is engaged in business or activities
so that the group or member meets the requirement described in
subdivision f from membership in the risk retention group which provides
such reinsurance.
h. The name of which includes the phrase "risk retention group".
12. "State" means any state of the United States or the District of Columbia.