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The Vermont Statutes Online



Title

08

:
Banking and Insurance






Chapter

142

:
RISK RETENTION GROUPS AND PURCHASING GROUPS











 

§

6053. Risk retention groups not chartered in this State

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 Secretary of State as agent. Before offering

insurance in this State, a risk retention group shall submit to the

Commissioner:

(A) 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 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 subdivision 6051(11) of this title;

(B) a copy of

its plan of operations and feasibility study and revisions of such plan or

study submitted to the state in which the risk retention group is chartered and

licensed; provided, however, 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:

(i) was defined

in the Product Liability Risk Retention Act of 1981 before October 27, 1986;

and

(ii) 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; and

(iii) the risk

retention group shall submit a copy of any revision to its plan of operation or

feasibility study required by subsection 6052(b) of this title at the time that

such revision has become effective in its chartering state; and

(C) a statement

of registration, for which a filing fee shall be determined by the

Commissioner, which designates the Secretary of State 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:

(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; and

(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.

(3) Taxation.

Each risk retention group subject to the provisions of this section shall be

liable for the payment of premium taxes and taxes on premiums of direct

business for risks resident or located within this State as provided in 32

V.S.A. § 8551, and shall report to the Commissioner the net premiums written

for risks resident or located within this State. Such 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.

(4) Compliance

with Unfair Claims Settlement Practices Law. Any risk retention group, its

agents and representatives shall comply with the Unfair Claims Settlement

Practices Act of this State, subdivision 4724(9) of this title.

(5) Deceptive,

false, or fraudulent practices. Any risk retention group shall comply with

subdivisions 4724(1) - (5) of this title regarding deceptive, false, or

fraudulent acts or practices.

(6) Examination

regarding financial condition. Any risk retention group may be required to

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.

Any such 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.

(7) Notice to

purchasers. Risk retention groups shall be required to notify purchasers as

required by 15 U.S.C. § 3902(a)(1)(I).

(8) Prohibited

acts regarding solicitation or sale. The following acts by a risk retention

group are hereby 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; and

(B) The

solicitation or sale of insurance by, or operation of, a risk retention group

that is in hazardous financial condition or financially impaired.

(9) 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 affiliated

risk retention group, captive or other policyholder-owned insurance company, or

a risk retention group all of whose members are insurance companies, is

directly or indirectly a member or owner of such risk retention group.

(10) 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 such policy. This subsection shall not be construed to

require the preapproval of forms by the Commissioner.

(11) Delinquency

proceedings. After an examination under subdivision 6053(6) of this title, 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 within the

meaning of chapter 145 of this title.

(12) Penalties.

A risk retention group subject to this section that violates any provision of

this chapter will be subject to the fines and the penalties including

revocation of its right to do business in this State, applicable to licensed

insurers generally under this title.

(13) Operation

prior to enactment of this chapter. In addition to complying with the

requirements of this section, any risk retention group operating in this State

prior to enactment of this chapter shall, within 30 days after December 31,

1992, comply with the provision of subdivision (1)(A) of this section. (Added

1991, No. 249 (Adj. Sess.), § 23, eff. Dec. 31, 1992; amended 1993, No. 40, §

10, eff. June 3, 1993.)