2023 New York Laws › ISC - Insurance › Article 59 - Risk Retention Groups and Purchasing Groups › 5904 - Risk Retention Groups Not Chartered in This State.

§  5904.  Risk  retention  groups  not chartered in this state. A risk
retention group  not  chartered  and  licensed  as  a  property/casualty
insurer  in  this  state,  seeking to do business or doing business as a
risk retention group in this state, shall comply with the laws  of  this
state, as follows:
(a)  Notice  of operations and designation of superintendent as agent.
Before offering insurance in this state, such risk retention group shall
submit to the superintendent:
(1) a statement identifying the state or  states  in  which  the  risk
retention  group  is  chartered  and licensed as an insurance company to
write liability insurance, the dates of chartering  and  licensing,  and
its principal place of business;
(2)  a  copy  of  its  plan  of operation or feasibility study and all
revisions of  such  plan  or  study  submitted  to  its  chartering  and
licensing  state;  provided, however, that the provision relating to the
submission of a plan of operation or feasibility study shall  not  apply
with  respect to any kind or classification of liability insurance which
was:
(A) defined in the federal Product Liability  Risk  Retention  Act  of
1981 before October twenty-seventh, nineteen hundred eighty-six; and
(B)  offered  before  such  date by any risk retention group which had
been chartered and was operating for not less than  three  years  before
such date; and
(3)  a  statement  of  registration,  for  which a filing fee shall be
imposed in accordance  with  a  regulation  to  be  promulgated  by  the
superintendent, which statement of registration shall include a power of
attorney  designating the superintendent as its agent for the purpose of
receiving service of process in any proceeding against it on a  contract
delivered  or  issued  for delivery, or on a cause of action arising, in
this state.
(A) The power of attorney shall be accompanied by written  designation
of  the  name and address of the officer, agent, or other person to whom
such process shall be forwarded by the superintendent or his  deputy  on
behalf  of  such  risk retention group. In the event such designation is
changed, a new certificate  of  designation  shall  be  filed  with  the
superintendent within ten days of such change.
(B)  Service  of  process upon a risk retention group pursuant to this
paragraph shall be  made  by  serving  the  superintendent,  any  deputy
superintendent  or  any  salaried  employee  of  the department whom the
superintendent designates for such purpose with two copies  thereof  and
the payment of a fee of twenty dollars. The superintendent shall forward
a  copy  of  such  process  by  registered or certified mail to the risk
retention group at the address  given  in  its  written  certificate  of
designation,  and  shall  keep  a  record  of  all  such process served.
Service of process so made shall be deemed made within  the  territorial
jurisdiction of any court in this state.
(b)  Financial condition. Any such risk retention group doing business
in this state, shall submit to the superintendent:
(1) a copy of the annual 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):
(2)  a  copy  of  each  examination  of  the  risk  retention group as
certified  by  the  commissioner  or  public  official  conducting   the
examination;
(3)  upon request by the superintendent, a copy of any audit performed
with respect to the risk retention group; and
(4)  such  information  as  may  be  required to verify its continuing
qualification as a risk retention group.
(c) Taxation. (1) Any such risk retention group shall  be  liable  for
the payment of franchise taxes and taxes on premiums and shall report to
the  superintendent  the  gross  direct  premiums, less returns thereon,
written on risks resident or located within this state.  Any  such  risk
retention group shall be deemed to be a licensed foreign insurer for the
purposes  of  taxation,  and  any applicable fines and penalties related
thereto.
(2) Whenever licensed insurance  agents  or  insurance  brokers  place
business  with a risk retention group, such licensee shall report to the
superintendent the premiums of direct business  for  risks  resident  or
located  within  this  state  which  they  have  placed  with  such risk
retention group, and such licensee shall keep a  complete  and  separate
record  of  all  policies  procured from each such risk retention group,
which record shall be open to  examination  by  the  superintendent,  as
provided  in  section  three  hundred ten of this chapter. These records
shall, for each policy and each kind of insurance  provided  thereunder,
include the following:
(A) the limit of liability;
(B) the time period covered;
(C) the effective date;
(D) the name of the risk retention group which issued the policy;
(E) the gross premium charged; and
(F) the amount of return premiums, if any.
(d)  Compliance  with unfair claims settlement practices law. Any such
risk retention group and its agents  and  representatives  shall  comply
with  the  unfair claims settlement practices provisions as set forth in
section  two  thousand  six  hundred  one  of  this  chapter,  and   any
regulations promulgated thereunder.
(e)  Deceptive,  false, or fraudulent acts or practices. Any such risk
retention group shall comply with the deceptive, false or fraudulent act
or practices  provisions  set  forth  in  article  twenty-four  of  this
chapter, and any regulations promulgated thereunder.
(f) Examination regarding financial condition. Any such risk retention
group  shall submit to an examination by the superintendent 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 sixty days after a request by
the superintendent. Any such examination shall be coordinated with other
jurisdictions to the extent  feasible  in  order  to  avoid  unjustified
repetition, and shall be conducted in an expeditious manner.
(g)  Injunctions.  Any  such risk retention group shall comply with an
injunction issued by a court of competent jurisdiction upon  a  petition
by  the  superintendent  that  the  risk retention group is in hazardous
financial condition or financially impaired.
(h) Dissolution or article seventy-four  proceedings.  Any  such  risk
retention group shall comply with any lawful order issued in a voluntary
dissolution   proceeding   or  in  an  article  seventy-four  proceeding
commenced by the superintendent if there has been a  finding,  after  an
examination  conducted  pursuant to subsection (f) of this section, that
such risk retention group is financially impaired.
(i) Operation prior to enactment  of  this  article.  In  addition  to
complying with the requirements of this section, any such risk retention
group  operating  in  this  state prior to the enactment of this article

shall, within thirty days after the  effective  date  of  this  article,
comply with the provisions of subsection (a) of this section.
(j)  Penalties.  Any  such  risk  retention  group  which violates any
provision of this article shall be  deemed  to  be  a  licensed  foreign
insurer  for  the  purposes  of  assessing  fines  and penalties and the
superintendent shall also have the  authority  to  revoke  such  group's
right to do business in this state.