§ 26.1-46-08 — Restrictions on insurance purchased by purchasing groups

1. 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
insurance producer acting pursuant to the surplus lines laws and regulations of such
state.
2. A purchasing group which obtains liability insurance from an insurer not admitted in
this state or a risk retention group shall inform each of the members of the group which
have a risk resident or located in this state that the risk is not protected by an
insurance insolvency guaranty fund in this state, and that the risk retention group or
insurer may not be subject to all insurance laws and rules of this state.
3. A purchasing group may not purchase insurance providing for a deductible or
self-insured retention applicable to the group as a whole unless the purchasing group
uses a policyholder's disclosure statement approved by the commissioner which
clearly explains in simplified language the policy is subject to a group deductible or
self-insured retention and provides a detailed explanation of the process of the
satisfaction of the deductible or self-insured retention among members.
4. A purchasing group may not purchase insurance providing for a shared aggregate limit
applicable to the group as a whole unless the purchasing group uses a policyholder's
disclosure statement approved by the commissioner which clearly explains in
simplified language the policy is subject to a group aggregate limit and coverage for
each individual member could be exhausted by claims from other members. The
insurance must allow for an individual member to purchase additional limits in the
event of exhaustion and this option must be described in the disclosure statement.