MT Code § 33-11-102 (2021)
2021 Montana Code Annotated|Title 33. Insurance and Insurance Companies|Chapter 11. Liability Risk Retention and Purchasing Groups|Part 1. General Provisions|33-11-102. Definitions

  33-11-102. Definitions. As used in this part, the following definitions apply:   (1) "Completed operations liability" means:   (a) liability arising out of the installation, maintenance, or repair of any product at a site that is not owned or controlled by:   (i) a person who performs that work; or   (ii) a person who hires an independent contractor to perform that work; and   (b) liability for activities that are completed or abandoned before the date of the occurrence giving rise to the liability.   (2) "Domicile", for purposes of determining the state where a purchasing group is domiciled, means:   (a) for a corporation, the state where the purchasing group is incorporated; and   (b) for an unincorporated entity, the state of its principal place of business.   (3) "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:   (a) meet obligations to policyholders with respect to known claims and reasonably anticipated claims; or   (b) pay other obligations in the normal course of business.   (4) "Insurance" means primary insurance, excess insurance, reinsurance, surplus line insurance, and any other arrangement for shifting and distributing risk that is determined to be insurance under the laws of this state.   (5) (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 to other persons resulting from or arising out of:   (i) a business, whether profit or nonprofit, trade, product, service (including professional service), premises, or operation; or   (ii) an activity of any state or local government or an agency or political subdivision of state or local government.   (b) The term does not include personal risk liability or an employer's liability with respect to its employees other than legal liability under the federal Employers' Liability Act, 45 U.S.C. 51 through 60. As used in this subsection, "personal risk liability" means liability for damages because of injury to any person, damage to property, or other loss or damage resulting from personal, familial, or household responsibilities or activities rather than from responsibilities or activities referred to in subsection (5)(a).   (6) "Plan of operation or a feasibility study" means an analysis that presents the expected activities and results of a risk retention group, including at a minimum:   (a) 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 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 procedures, managerial oversight methods, and investment policies; and   (f) other matters as may be prescribed by the commissioner for liability insurance companies authorized by the insurance laws of the state where the risk retention group is chartered.   (7) "Purchasing group" means a group that:   (a) has as one of its purposes the purchase of liability insurance on a group basis;   (b) purchases liability insurance only for its group members and only to cover their similar or related liability exposure, as described in subsection (7)(c);   (c) is composed of members whose businesses 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, service, premises, or operation; and   (d) is domiciled in any state.   (8) "Risk retention group" means a corporation or other limited liability association formed under the laws of any state, Bermuda, or the Cayman Islands:   (a) whose primary activity consists of assuming and spreading all or any portion of the liability exposure of its group members;   (b) that is organized for the primary purpose of conducting the activity described under subsection (8)(a);   (c) (i) that 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   (ii) that, 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 regulatory official of at least one state that it satisfied the capitalization requirements of that state. However, the group is considered to be a risk retention group only if it has been engaged in business continuously since January 1, 1985, and only for the purpose of continuing to provide insurance to cover product liability or completed operations liability. For purposes of this subsection (8), "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 that person when the incident giving rise to the claim occurred.   (d) that does not exclude any person from membership in the group solely to provide to members of the group a competitive advantage over the person;   (e) (i) that has as its members only persons who have an ownership interest in the group and that has as its owners only persons who are members and who are provided insurance by the risk retention group; or   (ii) that has as its sole member and sole owner an organization that is owned by persons who are provided insurance by the risk retention group;   (f) whose members are engaged in businesses or activities that are 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, service, premises, or operation;   (g) whose activities do not include the provision of insurance other than:   (i) liability insurance for assuming and spreading all or any portion of the liability of its group members; and   (ii) reinsurance with respect to the liability of any other risk retention group or member of the other group that is engaged in businesses or activities so that the group or member meets the requirement described in subsection (8)(f) for membership in the risk retention group that provides the reinsurance; and   (h) whose name includes the phrase "risk retention group".   (9) "State" means any state of the United States or the District of Columbia.   History: En. Sec. 2, Ch. 249, L. 1987; amd. Sec. 41, Ch. 379, L. 1995.