2023 New Jersey Revised Statutes › Title 17 - Corporations and Institutions for Finance and Insurance › Section 17:47A-8 - Prohibitions for purchasing group; taxation of premiums

17:47A-8. Prohibitions for purchasing group; taxation of premiums
8. a. No purchasing group doing business in this State shall purchase or maintain insurance covering its members located in this State from a risk retention group that is not chartered in this State, or from an insurer that is not authorized or admitted pursuant to Title 17 of the Revised Statutes to write insurance in this State, unless the purchase is from a risk retention group registered pursuant to section 4 of this act or a surplus lines insurer deemed eligible and placed pursuant to "the surplus lines law," P.L.1960, c.32 (C.17:22-6.40 et seq.).
b. No purchasing group doing business in this State shall purchase or maintain any insurance covering its members located in this State which provides for a deductible or a self-insured retention applicable to the group as a whole, unless the deductible or self-insured retention is the sole responsibility of the individual members of the purchasing group.
c. No purchasing group doing business in this State shall purchase or maintain a policy of insurance covering its members located in this State which is retrospectively rated unless either:
(1) The retrospective premium is charged to each member based solely on that member's claims; or
(2) The retrospective premium payable by the group is subject to a provision which provides for a maximum premium payable by the group. The maximum premium shall be established so that there is at least a 10% actuarial probability that the premium otherwise payable will exceed the maximum premium.
d. No purchasing group doing business in this State may purchase or maintain a policy of insurance covering its members located in this State unless the policy form or contract complies with P.L.1982, c.114 (C.17:29AA-1 et al.) if the insurer is an authorized or admitted insurer, or section 9 of P.L.1960 c.32 (C.17:22-6.43) if the insurer is an eligible surplus lines insurer.
e. No purchasing group doing business in this State shall purchase insurance coverage with rates in this State which are less than the lowest rate approved by the commissioner for use by any authorized or admitted insurer for similar risks, except that this provision does not apply to special risks as defined in section 3 of P.L.1982, c.114 (C.17:29AA-3). The purchasing group may purchase insurance coverage with any premium modification plan on file and in actual use by an authorized or admitted insurer for similar risks. The commissioner may authorize the purchasing group to purchase insurance coverage with a lower rate or different premium modification plan if the group demonstrates to the commissioner's satisfaction that the exposure and experience of the group's members in this State justify a lower rate or different premium modification plan.
f. Each purchasing group doing business in this State shall report all premiums paid to it which are attributable to risks within the State, on a form and in a manner provided by the commissioner. Premium taxes and taxes on premiums paid for coverage of risks resident or located in this State by a purchasing group or any members of the purchasing group are imposed upon the group's insurer at the same rate and subject to the same interest, fines and penalties as that applicable to premium taxes and taxes on premiums paid for similar coverage from a similar insurance source by other insureds.
g. A purchasing group which obtains liability insurance from a risk retention group shall inform each of the members of the group which have a risk resident or located in this State that the risk is not protected by an insurance insolvency guaranty fund in this State, and that the risk retention group may not be subject to all insurance laws and regulations of this State.
L.1993,c.240,s.8.