§27-46-2  Definitions. –

Link to law: http://webserver.rilin.state.ri.us/Statutes/TITLE27/27-46/27-46-2.HTM
Published: 2015

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TITLE 27

Insurance

CHAPTER 27-46

Risk Retention Act

SECTION 27-46-2



   § 27-46-2  Definitions. –

As used in this chapter:



   (1) "Commissioner" means the director of the department of

business regulation 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:



   (i) Any person who performs that work; or



   (ii) Any person who hires an independent contractor to

perform that work; but shall include liability for activities which are

completed or abandoned before the date of the occurrence giving rise to the

liability;



   (3) "Domicile", for the purposes of determining the state in

which a purchasing group is domiciled, means:



   (i) For a corporation, the state in which the purchasing

group is incorporated; and



   (ii) For an unincorporated entity, 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:



   (i) To meet obligations to policyholders with respect to

known claims and reasonably anticipated claims; or



   (ii) 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) "Liability":



   (i) 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 to other

persons resulting from or arising out of:



   (A) Any business whether profit or nonprofit, trade, product,

services including professional services, premises, or operations; or



   (B) Any activity of any state or local government, or any

agency or political subdivision of any state or local government; and



   (ii) Does not include personal risk liability and an

employer's liability with respect to its employees other than legal liability

under 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

subdivision (6) of this section;



   (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:



   (i) Information sufficient to verify that its members are

engaged in businesses or activities similar or related with respect to the

liability to which the members are exposed by virtue of any related, similar,

or common business, trade, product, services, premises or operations;



   (ii) 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;



   (iii) Historical and expected loss experience of the proposed

members and national experience of similar exposures to the extent that this

experience is reasonably available;



   (iv) Pro forma financial statements and projections;



   (v) 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;



   (vi) Identification of management, underwriting, and claims

procedures, marketing methods, managerial oversight methods, investment

policies, and reinsurance agreements;



   (vii) 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 state; and



   (viii) Any other matters that may be prescribed by the

commissioner of the state in which the risk retention group is chartered for

liability insurance companies authorized by the insurance laws of that 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 manufacturer, 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 the person when the incident giving rise to the claim occurred;



   (10) "Purchasing group" means any group which:



   (i) Has as one of its purposes the purchase of liability

insurance on a group basis;



   (ii) Purchases the insurance only for its group members and

only to cover their similar or related liability exposure, as described in

subdivision (10)(iii);



   (iii) 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; and



   (iv) Is domiciled in any state;



   (11) "Risk retention group" means any corporation or other

limited liability association:



   (i) Whose primary activity consists of assuming and spreading

all, or any portion, of the liability exposure of its group members;



   (ii) Which is organized for the primary purpose of conducting

the activity described under paragraph (i) of this subdivision;



   (iii) Which:



   (A) 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



   (B) 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 that date, had certified to the insurance

commissioner of at least one state that it satisfied the capitalization

requirements of that state, except that the 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 the 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, 15 U.S.C. § 3901 et

seq.;



   (iv) That does not exclude any person from membership in the

group solely to provide for members of the group a competitive advantage over

the person;



   (v) Which:



   (A) Has as its owners only persons who comprise the

membership of the risk retention group and who are provided insurance by the

group; or



   (B) Has as its sole owner an organization which has as:



   (I) Its members only persons who comprise the membership of

the risk retention group; and



   (II) Its owners only persons who comprise the membership of

the risk retention group and who are provided insurance by the group;



   (vi) Whose members are engaged in businesses or activities

similar or related with respect to the liability of which the members are

exposed by virtue of any related, similar, or common business trade, product,

services, premises or operations;



   (vii) Whose activities do not include the provision of

insurance other than:



   (A) Liability insurance for assuming and spreading all or any

portion of the liability of its group members; and



   (B) Reinsurance with respect to the liability of any other

risk retention group or any members of the other group which is engaged in

business or activities so that the group or member meets the requirement

described in subdivision (vi) from membership in the risk retention group which

provides the reinsurance; and



   (viii) The name of which includes the phrase "risk retention

group"; and



   (12) "State" means any state of the United States or the

District of Columbia.



History of Section.

(P.L. 1991, ch. 348, § 1.)