§ 26.1-46-03 — Risk retention groups not chartered in this state - Requirements for operation

North Dakota § 26.1-46-03

• Jurisdiction: North Dakota
• Title 26.1: Insurance
• Ch. 26.1-46: Risk Retention Groups and Purchasing Groups

Text

operation.
Risk retention groups chartered in states other than this state and seeking to do business
as a risk retention group in this state shall observe and abide by the laws of this state as follows:
1. Notice of operations and designation of commissioner as agent. Before offering
insurance in this state, a risk retention group shall submit to the commissioner on a
form prescribed by the national association of insurance commissioners all of the
following:
a. 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 such 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 subsection 11 of section 26.1-46-01.

b. A copy of its plan of operation or a feasibility study and revisions of such plan or
study submitted to its state of domicile; provided, however, that 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 which was
defined in the Product Liability Risk Retention Act of 1981 before October 27,
1986, and was offered before such date by any risk retention group which had
been chartered and operating for not less than three years before such date.
c. The risk retention group shall submit a copy of any revision to its plan of
operation or feasibility study required by section 26.1-46-02 at the same time that
the revision is submitted to the commissioner of its chartering state.
d. A statement of registration, for which a filing fee must be determined by the
commissioner, which designated the commissioner as its agent for the purpose of
receiving service of legal documents or process.
2. Financial condition. Any risk retention group doing business in this state shall submit to
the commissioner upon the commissioner's request all of the following:
a. A copy of the group's financial statement submitted to its state of domicile, which
must 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 according to
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 audit performed with respect to
the risk retention group.
d. Such information as may be required to verify its continuing qualifications as a
risk retention group under subsection 11 of section 26.1-46-01.
3. Taxation.
a. All premiums paid for coverages within this state to risk retention groups are
subject to taxation at the same rate and subject to the same interest, fines, and
penalties for nonpayment that are applicable to foreign-admitted insurers.
b. To the extent insurance producers are utilized, the insurance producers shall
report and pay the taxes for the premiums for risks which the insurance
producers have placed with or on behalf of a risk retention group not chartered in
this state.
c. To the extent the insurance producers are not utilized or fail to pay the tax, each
risk retention group shall pay the tax for risks insured within the state. Further,
each risk retention group shall report all premiums paid to it for risks insured
within the state.
d. This subsection does not apply to risk retention groups doing business in this
state which have fewer than twenty-six resident members or insureds.
e. To the extent that insurance producers are utilized pursuant to section
26.1-46-11, each insurance producer shall keep a complete and separate record
of all policies procured from each risk retention group, which record must be open
to examination by the commissioner, as provided in sections 26.1-03-19.1
through 26.1-03-22. These records must, for each policy and each kind of
insurance provided thereunder, include the limit of liability, the time period
covered, the effective date, the name of the risk retention group which issued the
policy, the gross premium charged, and the amount of return premiums, if any.
4. Compliance with prohibited practices chapter. Any risk retention group, its insurance
producers and representatives, shall comply with chapter 26.1-04.
5. Examination regarding financial condition. Any risk retention group must submit to an
examination by the commissioner to determine its financial condition if the
commissioner of the jurisdiction in which the group is chartered has not initiated an
examination or does not initiate an examination, within sixty days after a request by
the commissioner of this state. Any such examination must be coordinated to avoid

unjustified repetition and conducted in an expeditious manner and in accordance with
the national association of insurance commissioners examiner handbook.
6. Notice to purchasers. Any policy issued by a risk retention group must contain in
ten-point type of 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.
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 such group.
b. The solicitation or sale of insurance by, or operation of, a risk retention group that
is in a hazardous financial condition or is financially impaired.
8. Prohibition on ownership by an insurance company. No risk retention group may be
allowed to do business in this state if an insurance company is directly or indirectly a
member or owner of such risk retention group, other than in the case of a risk retention
group all of whose members are insurance companies.
9. 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 subsection 4.
10. Any risk retention group, its insurance producers, and representatives shall comply
with chapter 26.1-04. The terms of any insurance policy issued by any risk retention
group may 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 such policy.
11. A risk retention group that violates any provisions of 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. In addition to complying with the requirements of this
section, any risk retention group operating in this state prior to enactment of this
chapter, within thirty days after the effective date of this chapter, shall comply with the
provision of subdivision a of subsection 1.
12. A risk retention group that is not chartered in this state but is in compliance with this
section is deemed an authorized insurer for the satisfaction of any requirement, under
the laws of this state, that insurance coverage be placed with an authorized insurer.