NY Ins L § 5902 (2021)
2021 New York Laws ISC - Insurance Article 59 - Risk Retention Groups and Purchasing Groups 5902 - Definitions.

§  5902.  Definitions.  The  terms used in this article shall have the meanings set forth in this  chapter,  except  to  the  extent  added  or modified by the following:  (a) "Commissioner"  means the commissioner, director or superintendent of financial services in any other state.  (b) "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:  (1) any person who performs that work; or  (2) 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.  (c) "Domicile",  for  purposes  of  determining  the  state in which a purchasing group is domiciled, means:  (1) for a corporation, the state in  which  the  purchasing  group  is incorporated; and  (2)  for an unincorporated entity, the state of its principal place of business.  (d) "Financially impaired" means a risk retention group:  (1) whose admitted assets are less  than  the  sum  of  its  aggregate liabilities  and  the  amount of surplus to policyholders required to be maintained by a domestic risk retention group authorized to do the  same kind or kinds of insurance; or  (2)  whose  admitted  assets  are  less  than the sum of its aggregate liabilities and outstanding capital stock; or  (3) which is insolvent.  (e) "Hazardous financial condition" means that, based on  its  present or  reasonably  anticipated financial condition, a risk retention group, although not yet financially impaired, is unlikely to be able:  (1) to meet obligations to policyholders with respect to known  claims and reasonably anticipated claims; or  (2) to pay other obligations in the normal course of business.  (f) "Insolvent" means a risk retention group whose admitted assets are less than the aggregate amount of its liabilities.  (g) "Insurance"    means    primary   insurance,   excess   insurance, reinsurance, excess  line  insurance,  and  any  other  arrangement  for shifting and distributing risk which is determined to be insurance under the laws of this state.  (h) "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 such other persons resulting from or arising out of:  (1) (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 thereof; and  (2) does  not  include  personal  risk  liability  and  an  employer's liability with respect to its employees other than legal liability under the Federal Employers' Liability Act (45 U.S.C. § 51 et seq.).  (i) "Located"  or "location", for purposes of determining the state in which a purchasing group is located, shall  be  defined  in  regulations promulgated  by  the superintendent which shall not be inconsistent with the Federal Liability Risk Retention Act of 1986 and amendments thereto.  (j) "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 subsection (h) of this section.  (k) "Plan  of  operation or feasibility study" means an analysis which presents the expected activities and results of a risk  retention  group making  application  to  become  chartered  and  licensed  as a domestic property/casualty  insurer  in  this  state,  including  at  least   the following:  (1)  information  sufficient to verify that its members are engaged in businesses  or  activities  similar  or  related  with  respect  to  the liability  to  which  such members are exposed by virtue of any related, similar, or common  business,  trade,  product,  services,  premises  or operations;  (2)  for  each  state  in  which it intends to operate, the coverages, deductibles, coverage limits, rates, and rating  classification  systems for each kind of insurance the group intends to offer;  (3)  historical  and  expected loss experience of the proposed members and national experience of similar exposures to  the  extent  that  this experience is reasonably available;  (4) pro forma financial statements and projections;  (5) appropriate opinions by a qualified, independent casualty actuary, including  a  determination  of  minimum premium or participation levels required to commence operations and to  prevent  the  development  of  a hazardous financial condition;  (6)  identification of management, underwriting and claims procedures, marketing methods, managerial oversight methods, investment policies and reinsurance agreements;  (7) 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  (8) such other matters as 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 the state.  (l) "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 such a person when the incident giving rise to the claim occurred.  (m) "Purchasing group" means any group formed pursuant to the  federal liability risk retention act of 1986 which:  (1)  has as one of its purposes the purchase of liability insurance on a group basis;  (2) purchases such insurance only for its group members  and  only  to cover  their  similar  or  related  liability  exposure, as described in paragraph three of this subsection;  (3) 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, services, premises, or operations; and  (4) is domiciled in any state.  (n) "Risk retention group" means  any  corporation  or  other  limited liability  association  formed  pursuant  to  the federal liability risk retention act of 1986:  (1) whose primary activity consists of assuming and spreading all,  or any portion, of the liability exposure of its group members;  (2)  which  is  organized  for  the  primary purpose of conducting the activity described under paragraph one of this subsection;  (3) 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 first, nineteen hundred eighty-five, was chartered or licensed and authorized to engage in the business of insurance  under the  laws  of  Bermuda  or the Cayman Islands and, before such date, had certified to the insurance commissioner of at least one  state  that  it satisfied the capitalization requirements of such state, except that any such  group  shall be considered to be a risk retention group only if it has been engaged in business continuously since such date and  only  for the  purpose  of  continuing  to  provide  insurance  to  cover  product liability or completed operations liability;  (4) which does not exclude any person from  membership  in  the  group solely  to  provide  for members of such a group a competitive advantage over such a person;  (5) which:  (A) has as its owners only persons who comprise the membership of  the risk retention group and who are provided insurance by such group; or  (B)  has  as  its  sole owner an organization which has as its members only persons who comprise the membership of the risk retention group and which organization has as its  owners  only  persons  who  comprise  the membership of the risk retention group and who are provided insurance by the risk retention group;  (6)  whose  members are engaged in businesses or activities similar or related with respect to the liability of which such members are  exposed by  virtue  of  any related, similar, or common business trade, product, services, premises or operations;  (7) 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 member of such other risk retention group) which is  engaged  in  businesses  or  activities  which  meet the requirement described in paragraph six of this subsection for membership in the risk retention group which provides such reinsurance; and  (8) the name of which includes the phrase "risk retention group".  (o) "State" means any state of the United States or  the  District  of Columbia.  (p) "Superintendent" means the superintendent of financial services of this state.