For the purposes of this chapter, the term:
(1) "Commissioner" means the Commissioner of the Department of Insurance, Securities, and Banking, or the commissioner, director, or superintendent of insurance in any other state.
(A) Any person who performs that work; or
(B) 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.
(1A) "Completed operations liability" means liability arising out of installation, maintenance, or repair of any product at a site which is not owned or controlled by:
(2) "District" means the District of Columbia.
(3) "Domicile", for purposes of determining the state in which a purchasing group is domiciled, means:
(A) For a corporation, the state in which the purchasing group is incorporated; and
(B) For an unincorporated entity, the state of its principal place of business.
(4) "Hazardous financial condition" means that, based on its present 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;
(B) Pay other obligations in the normal course of business; or
(C) Meet the minimum capital and surplus requirements of licensed property and casualty insurance companies.
(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 the District.
(6) "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 any business (whether profit or nonprofit), trade, product, services (including professional services), premises, or operations, or any activity of any state or local government, or any agency or political subdivision thereof. The term "liability" 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.).
(7) "NAIC" means National Association of Insurance Commissioners.
(8) "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 paragraph (10) of this section.
(9) "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:
(A) 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;
(B) 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;
(C) Historical and expected loss experience of the proposed members and national experience of similar exposures to the extent that this experience is reasonably available;
(D) Pro forma financial statements and projections;
(E) 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;
(F) Identification of management, underwriting, and claims procedures marketing methods, managerial oversight methods, investment policies, and reinsurance agreements;
(G) 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
(H) Other matters as may be prescribed by the insurance commissioner of the jurisdiction in which the risk retention group is chartered for liability insurance companies authorized by the insurance laws of that jurisdiction.
(10) "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 the person when the incident giving rise to the claim occurred.
(11) "Purchasing group" means any group which:
(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 subparagraph (C) of this paragraph;
(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, services, premises, or operations; and
(D) Is domiciled in any state.
(12) "Risk retention group" means any corporation or other limited liability association:
(A) Whose primary activity consists of assuming and spreading all, or any portion, of the liability exposure of its group members;
(B) Which is organized for the primary purpose of conducting the activity described under subparagraph (A) of this paragraph;
(C) Which 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 which, 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 1 state that it satisfied the capitalization requirements of that state, except that any group shall be considered 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 these terms were defined in the federal Product Liability Risk Retention Act of 1981, approved September 25, 1981 (95 Stat. 949; 15 U.S.C. § 3901 et seq.), before the date of the enactment of the Liability Risk Retention Act of 1986, approved October 27, 1986 (100 Stat. 3170; 15 U.S.C. § 3901 et seq.);
(D) Repealed.
(E) Which does not exclude any person from membership in the group solely to provide members of the group a competitive advantage over that person;
(F) Which has as its owners only persons who comprise the membership of the risk retention group and who are provided insurance by the group, or has as its sole owner an organization which has as its members only persons who comprise the membership of the risk retention group, and as its owners only persons who comprise the membership of the risk retention group and who are provided insurance by the group;
(G) 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;
(H) 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 any members of the other group, which is engaged in business or activities so that the group or a member meets the requirement described in paragraph (9)(G) of this section from membership in the risk retention group which provides the reinsurance; and
(I) The name of which includes the phrase "Risk Retention Group".
(13) "State" means any state of the United States or the District of Columbia.
(14) Repealed.
(Oct. 21, 1993, D.C. Law 10-46, § 2, 40 DCR 6082; Apr. 26, 1994, D.C. Law 10-103, § 4(a), 41 DCR 1005; Feb. 27, 1996, D.C. Law 11-90, §§ 3(a)- (c), 42 DCR 7155; May 21, 1997, D.C. Law 11-268, § 10(aa)(1), 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81, § 38(a), 45 DCR 745; June 11, 2004, D.C. Law 15-166, § 4(z), 51 DCR 2817.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 35-2901.
Effect of Amendments
D.C. Law 15-166, in par. (1), substituted "Commissioner of the Department of Insurance, Securities, and Banking" for "Commissioner of Insurance and Securities".
Temporary Amendments of Section
For temporary (225 day) amendment of section, see § 4(a) of Insurance Omnibus Temporary Amendment Act of 1993 (D.C. Law 10-76, March 17, 1994, law notification 41 DCR 1626).
For temporary (225 day) amendment of section, see § 3(a)-(c) of Insurance Omnibus Temporary Amendment Act of 1995 (D.C. Law 11-36, September 8, 1995, law notification 42 DCR 5305).
Emergency Act Amendments
For temporary amendment of section, see § 3(a) through (c) of the Insurance Omnibus Emergency Amendment Act of 1995 (D.C. Act 11-48, May 15, 1995, 42 DCR 2544) and § 3(a) through (c) of the Insurance Omnibus Congressional Recess Emergency Amendment Act of 1995 (D.C. Act 11-97, July 19, 1995, 42 DCR 3844).
For temporary (90 day) amendment of section, see § 4(z) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653).
Legislative History of Laws
Law 10-46, the "Risk Retention Act of 1993," was introduced in Council and assigned Bill No. 10-124, which was referred to the Committee on Consumer and Regulatory Affairs. The Bill was adopted on first and second readings on June 29, 1993, and July 13, 1993, respectively. Signed by the Mayor on August 4, 1993, it was assigned Act No. 10-91 and transmitted to both Houses of Congress for its review. D.C. Law 10-46 became effective on October 21, 1993.
Law 10-103, the "Insurance Omnibus Amendment Act of 1994," was introduced in Council and assigned Bill No. 10-394, which was referred to the Committee on Consumer and Regulatory Affairs. The Bill was adopted on first and second readings on January 4, 1994, and February 1, 1994, respectively. Signed by the Mayor on February 17, 1994, it was assigned Act No. 10-191 and transmitted to both Houses of Congress for its review. D.C. Law 10-103 became effective on April 26, 1994.
Law 11-90, the "Insurance Omnibus Amendment Act of 1995," was introduced in Council and assigned Bill No. 11-182, which was referred to the Committee on Consumer and Regulatory Affairs. The Bill was adopted on first and second readings on November 7, 1995, and December 5, 1995, respectively. Signed by the Mayor on December 18, 1995, it was assigned Act No. 11-173 and transmitted to both Houses of Congress for its review. D.C. Law 11-90 became effective on February 27, 1996.
Law 11-268, the "Department of Insurance and Securities Regulation Establishment Act of 1996," was introduced in Council and assigned Bill No. 11- 415, which was referred to the Committee on Consumer and Regulatory Affairs. The Bill was adopted on first and second readings on November 7, 1996, and December 3, 1996, respectively. Signed by the Mayor on December 30, 1996, it was assigned Act No. 11-524 and transmitted to both Houses of Congress for its review. D.C. Law 11-268 became effective on May 21, 1997.
Law 12-81, the "Technical Amendments Act of 1998," was introduced in Council and assigned Bill No. 12-408, which was referred to the Committee of the Whole. The Bill was adopted on first and second readings on November 4, 1997, and December 4, 1997, respectively. Signed by the Mayor on December 22, 1997, it was assigned Act No. 12-246 and transmitted to both Houses of Congress for its review. D.C. Law 12-81 became effective on March 24, 1998.
For Law 15-166, see notes following § 31-1004.
Delegation of Authority
Delegation of authority pursuant to D.C. Law 10-46, the Risk Retention Act of 1993, see Mayor's Order 94-54, March 7, 1994 (41 DCR 1433).
Miscellaneous Notes
Mayor authorized to issue rules: Section 14 of D.C. Law 10-46 provided that the Mayor shall, pursuant to subchapter I of Chapter 15 of Title 1 [subchapter I of Chapter 5 of Title 2, 2001 Ed.], issue rules to implement the provisions of this chapter.
(a)(1) A risk retention group shall be chartered as an association captive insurer licensed pursuant to § 31-3931.01, and licensed to write only liability insurance pursuant to this chapter, and shall comply with all of the laws, rules, and regulations, and requirements applicable to captive insurance companies chartered and licensed in the District and with § 31-4103, to the extent the requirements are not a limitation on laws, rules, regulations, or requirements of the District.
(2) All risk retention groups chartered in the District shall file with the Mayor and the NAIC an annual statement in a form prescribed by the NAIC and in any other form required by the Mayor.
(3) Any license issued pursuant to this section shall be issued as a Financial Services endorsement to a basic business license under the basic business license system as set forth in subchapter I-A of Chapter 28 of Title 47.
(b) Before it may offer insurance in any state, each risk retention group shall also submit to the Mayor a plan of operation or feasibility study. The risk retention group shall submit an appropriate revision in the event of any subsequent material change in any item of the plan of operation or feasibility study, within 10 days of any change. The group shall not offer any additional kinds of liability insurance, in the District or in any other state, until a revision of the plan or study is approved by the Commissioner.
(c)(1) At the time of filing its application for a charter, the risk retention group shall provide to the Commissioner, in summary form, the following information:
(A) The identity of the initial members of the group;
(B) The identity of those individuals who organized the group or who will provide administrative services or otherwise influence or control the activities of the group;
(C) The amount and nature of initial capitalization;
(D) The coverages to be afforded; and
(E) The states in which the group intends to operate.
(2) Upon receipt of this information, the Mayor shall forward the information to the NAIC. Providing notification to the NAIC is in addition to and shall not be sufficient to satisfy the requirements of § 31-4103 or any other sections of this chapter.
(Oct. 21, 1993, D.C. Law 10-46, § 3, 40 DCR 6082; Apr. 26, 1994, D.C. Law 10-103, § 4(b), 41 DCR 1005; May 21, 1997, D.C. Law 11-268, § 10(aa)(2), 44 DCR 1730; Apr. 20, 1999, D.C. Law 12-261, § 2003(ll), 46 DCR 3142; Oct. 28, 2003, D.C. Law 15-38, § 3(z), 50 DCR 6913; Mar. 16, 2005, D.C. Law 15-262, § 26, 52 DCR 1205.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 35-2902.
Effect of Amendments
D.C. Law 15-38, in subsec. (a)(3), substituted "Financial Services endorsement to a basic business license under the basic" for "Class A Financial Services endorsement to a master business license under the master".
D.C. Law 15-262 rewrote subsec. (a)(1) which had read:
"(a)(1) A risk retention group shall be chartered and licensed to write only liability insurance pursuant to this chapter, and, except as provided elsewhere in this chapter, must comply with all of the laws, rules, regulations, and requirements applicable to an insurer chartered and licensed in the District and with § 31-4103 to the extent the requirements are not a limitation on laws, rules, regulations, or requirements of the District."
Temporary Amendments of Section
For temporary (225 day) amendment of section, see § 4(b) of Insurance Omnibus Temporary Amendment Act of 1993 (D.C. Law 10-76, March 17, 1994, law notification 41 DCR 1626).
Emergency Act Amendments
For temporary (90 day) amendment of section, see § 3(z) of Streamlining Regulation Emergency Act of 2003 (D.C. Act 15-145, August 11, 2003, 50 DCR 6896).
For temporary (90 day) amendment of section, see § 26 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
Legislative History of Laws
For legislative history of D.C. Law 10-46, see Historical and Statutory Notes following § 31-4101.
For legislative history of D.C. Law 10-103, see Historical and Statutory Notes following § 31-4101.
For legislative history of D.C. Law 11-268, see Historical and Statutory Notes following § 31-4101.
Law 12-261, the "Second Omnibus Regulatory Reform Amendment Act of 1998," was introduced in Council and assigned Bill No. 12-845, which was referred to the Committee of the Whole. The Bill was adopted on first and second reading on December 1, 1998, and December 15, 1998, respectively. Signed by the Mayor on December 31, 1998, it was assigned Act No. 12-615, and transmitted to both Houses of Congress for review. D.C. Law 12-261 became effective on April 20, 1999.
For Law 15-38, see notes following § 31-1103.
For Law 15-262, see notes following § 31-3901.
Risk retention groups chartered and licensed in states other than the District seeking to do business as a risk retention group in the District shall comply with the laws of the District as follows:
(1)(A) Before offering insurance in the District, a risk retention group shall submit to the Mayor on a form prescribed by the NAIC:
(i) A statement identifying the state or states in which the retention group is chartered and licensed as a liability insurance company, charter date, its principal place of business, and any other information, including information on its membership, as the Mayor may require to verify that the risk retention group is qualified under § 31-4101(12); and
(ii) A copy of its plan of operations or feasibility study and revisions of the plan or study submitted to the state in which the risk retention group is chartered and licensed; provided, however, that the provision relating to the submission of a plan of operation or feasibility study shall not apply with respect to any line or classification of liability insurance which was defined in the federal Product Liability Risk Retention Act of 1981 (15 U.S.C. § 3901 et seq.), before October 27, 1986, and which was offered before the date by any risk retention group which had been chartered and operating for not less than 3 years before the date.
(B) The risk retention group shall submit a copy of any revision to its plan of operation or feasibility study required by § 31-4102(b) at the same time that the revision is submitted to the commissioner of its chartering state.
(C) The risk retention group shall submit a statement of registration, for which a filing fee shall be determined by the Mayor, proof of compliance with the service of process provisions of § 31-202.
(2) Any risk retention group doing business in the District shall submit to the Mayor:
(A) A copy of the group's 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 NAIC;
(B) A copy of each examination of the risk retention group as certified by the Commissioner or public official conducting the examination;
(C) Upon request by the Commissioner, a copy of any information or document pertaining to any outside audit performed with respect to the risk retention group; and
(D) Any information required to verify its continuing qualification as a risk retention group under § 31-4101(12).
(3)(A) Each risk retention group shall be liable for the payment of premium taxes and taxes on premiums of direct business for risks resident or located within the District, and shall report to the Commissioner the net premiums written for risks resident or located within the District. Such a risk retention group shall be subject to taxation, and any related applicable fines and penalties, on the same basis as a foreign admitted insurer.
(B) To the extent licensed agents or brokers are utilized pursuant to § 31- 4111, they shall report to the Commissioner the premiums for direct business for risks resident or located within the District which these licensees have placed with or on behalf of a risk retention group not chartered in the District of Columbia.
(C) To the extent that insurance agents or brokers are utilized pursuant to § 31-4111, the agent or broker shall keep a complete and separate record of all policies procured from each risk retention group, which record shall be open to examination by the Commissioner, as provided by the insurance laws of the District of Columbia. These records shall contain each policy and each kind of insurance provided thereunder, and shall include the following:
(i) The limit of liability;
(ii) The time period covered;
(iii) The effective date;
(iv) The name of the risk retention group which issued the policy;
(v) The gross premium charged; and
(vi) The amount of return premiums, if any.
(4) Any risk retention group, its agents, and representatives shall comply with District law governing fraud or deceptive practices. If the Mayor seeks an injunction regarding this conduct, the injunction shall be obtained from a court of competent jurisdiction.
(5) Any risk retention group shall comply with the laws governing the proper transaction of insurance business as provided by the District.
(6) Any risk retention group must submit to an examination by the Commissioner to determine its financial condition if the superintendent or Commissioner of the jurisdiction in which the group is chartered and licensed has not initiated an examination within 60 days after a request by the Commissioner of the District. Any examination shall be coordinated to avoid unjustified repetition and conducted in an expeditious manner and in accordance with the NAIC's Examiner Handbook. Cost of the examination shall be borne by the risk retention group.
(7) Every application form for insurance from a risk retention group, and every policy, on its front and declaration page issued by a risk retention group, shall contain in 10-point type the following notice:
"NOTICE
"This policy is issued by your risk retention group. Your risk retention group may not be subject to all of the insurance laws and regulations of your state. State insurance insolvency guaranty funds are not available for your risk retention group.".
(8) The following acts by a risk retention group are prohibited:
(A) The solicitation or sale of insurance by a risk retention group to any person who is not eligible for membership in the group; and
(B) The solicitation or sale of insurance by, or operation of, a risk retention group that is in hazardous financial condition or financially impaired.
(9) After April 26, 1994, risk retention groups shall not be allowed to do business in the District if an insurance company is directly or indirectly a member or owner of the risk retention group, other than in the case of a risk retention group all of whose members are insurance companies.
(10) The terms of any insurance policy issued by risk retention groups shall not provide, or be construed to provide, coverage prohibited generally by a statute of the District or declared unlawful by the highest court of the District whose law applies to such a policy.
(11) A risk retention group not chartered in the District and doing business in the District shall comply with a lawful order issued in a voluntary dissolution proceeding or in a delinquency proceeding commenced by a state insurance commissioner if there has been a finding of financial impairment after an examination under paragraph (6) of this section.
(12) A risk retention group that violates any provision of this chapter will be subject to fines and penalties, including revocation of its right to do business in the District, applicable to licensed insurers generally.
(13) In addition to complying with the requirements of this section, any risk retention group operating in the District prior to enactment of this chapter shall, within 30 days after October 21, 1993, comply with paragraph (1) of this section.
(Oct. 21, 1993, D.C. Law 10-46, § 4, 40 DCR 6082; Apr. 26, 1994, D.C. Law 10-103, § 4(c), 41 DCR 1005; Mar. 21, 1995, D.C. Law 10-233, § 8, 42 DCR 24; May 16, 1995, D.C. Law 10-255, § 47, 41 DCR 5193; Feb. 27, 1996, D.C. Law 11-90, §§ 3(d)-(f), 42 DCR 7155; May 21, 1997, D.C. Law 11- 268, § 10(aa)(2), 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81, § 38(b), 45 DCR 745.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 35-2903.
Temporary Amendments of Section
For temporary (225 day) amendment of section, see § 4(c) of Insurance Omnibus Temporary Amendment Act of 1993 (D.C. Law 10-76, March 17, 1994, law notification 41 DCR 1626).
For temporary (225 day) amendment of section, see § 3(d)-(f) of Insurance Omnibus Temporary Amendment Act of 1995 (D.C. Law 11-36, September 8, 1995, law notification 42 DCR 5305).
Emergency Act Amendments
For temporary amendment of section, see § 3(d) through (f) of the Insurance Omnibus Emergency Amendment Act of 1995 (D.C. Act 11-48, May 15, 1995, 42 DCR 2544) and § 3(d) through (f) of the Insurance Omnibus Congressional Recess Emergency Amendment Act of 1995 (D.C. Act 11-97, July 19, 1995, 42 DCR 3844).
Legislative History of Laws
For legislative history of D.C. Law 10-46, see Historical and Statutory Notes following § 31-4101.
For legislative history of D.C. Law 10-103, see Historical and Statutory Notes following § 31-4101.
Law 10-233, the "Insurers Service of Process Act of 1994," was introduced in Council and assigned Bill No. 10-666, which was referred to the Committee on Consumer and Regulatory Affairs. The Bill was adopted on first and second readings on November 1, 1994, and December 6, 1994, respectively. Signed by the Mayor on December 27, 1994, it was assigned Act No. 10-376 and transmitted to both Houses of Congress for its review. D.C. Law 10-233 became effective on March 21, 1995.
Law 10-255, the "Technical Amendments Act of 1994," was introduced in Council and assigned Bill No. 10-673, which was referred to the Committee of the Whole. The Bill was adopted on first and second readings on June 21, 1994, and July 5, 1994, respectively. Signed by the Mayor on July 25, 1994, it was assigned Act No. 10-302 and transmitted to both Houses of Congress for its review. D.C. Law 10-255 became effective May 16, 1995.
For legislative history of D.C. Law 11-90, see Historical and Statutory Notes following § 31-4101.
For legislative history of D.C. Law 11-268, see Historical and Statutory Notes following § 31-4101.
For legislative history of D.C. Law 12-81, see Historical and Statutory Notes following § 31-4101.
(a) No risk retention group shall be required or permitted to join or contribute financially to any insurance insolvency guaranty fund, or similar mechanism, in the District, nor shall any risk retention group or its insureds or claimants against its insureds, receive any benefit from such a fund for claims arising under the insurance policies issued by the risk retention group.
(b) When a purchasing group obtains insurance covering its members from an insurer not authorized in this state, or a risk retention group, no risks, resident or located, shall be covered by any insurance guaranty fund or similar mechanism in the District.
(c) When a purchasing group obtains insurance covering its members' risks from an authorized insurer, only risks resident or located in the District shall be covered by the District property and liability guaranty fund.
(Oct. 21, 1993, D.C. Law 10-46, § 5, 40 DCR 6082.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 35-2904.
Legislative History of Laws
For legislative history of D.C. Law 10-46, see Historical and Statutory Notes following § 31-4101.
A policy of insurance issued to a risk retention group, or any member of that group, shall not be required to be countersigned as otherwise provided in the District of Columbia insurance law.
(Oct. 21, 1993, D.C. Law 10-46, § 6, 40 DCR 6082.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 35-2905.
Legislative History of Laws
For legislative history of D.C. Law 10-46, see Historical and Statutory Notes following § 31-4101.
A purchasing group and its insurer or insurers shall be subject to all applicable laws of the District, except that a purchasing group and its insurer or insurers shall be exempt, in regard to liability insurance for the purchasing group, from any law that would:
(1) Prohibit the establishment of a purchasing group;
(2) Make it unlawful for an insurer to provide, or offer to provide, insurance on a basis providing to a purchasing group or its members advantages based on their loss and expense experience not afforded to other persons with respect to rates, policy forms, coverages, or other matters;
(3) Prohibit a purchasing group or its members from purchasing insurance on a group basis described in paragraph (2) of this section;
(4) Prohibit a purchasing group from obtaining insurance on a group because the group has not been in existence for a minimum period of time or because any member has not belonged to the group for a minimum period of time;
(5) Require that a purchasing group must have a minimum number of common ownership or affiliation, or certain legal form;
(6) Require that a certain percentage of a purchasing group must obtain insurance on a group basis;
(7) Otherwise discriminate against a purchasing group or any of its members; or
(8) Require that any insurance policy issued to a purchasing group or any of its members be countersigned by an insurance agent or broker residing in the District.
(Oct. 21, 1993, D.C. Law 10-46, § 7, 40 DCR 6082.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 35-2906.
Legislative History of Laws
For legislative history of D.C. Law 10-46, see Historical and Statutory Notes following § 31-4101.
(a) A purchasing group which intends to do business in the District shall, prior to doing business, furnish notice to the Commissioner which shall:
(1) Identify the state in which the group is domiciled;
(2) Identify all other states in which the group intends to do business;
(3) Specify the lines and classifications of liability insurance which the purchasing group intends to purchase;
(4) Identify the insurance company or companies from which the group intends to purchase its insurance and the domicile of each company;
(5) Specify the method by which, and the person or persons, if any, through whom, the insurance will be offered to its members whose risks are resident or located in the District;
(6) Identify the principal place of business of the group; and
(7) Provide any other information required by the Commissioner to verify that the purchasing group is qualified under § 31-4101(11).
(b) A purchasing group shall, within 10 days, notify the Commissioner of any changes in any of the items set forth in subsection (a) of this section.
(c) The purchasing group shall register with the District and provide proof of compliance with the service of process provisions of § 31-202, for which a filing fee shall be determined by the Commissioner, except that these requirements shall not apply in the case of a purchasing group which only purchases insurance that was authorized under the federal Product Liability Risk Retention Act of 1981 (15 U.S.C. § 3901 et seq.), and:
(1) Which was domiciled in any state of the United States before April 1, 1986, and after October 27, 1986;
(2) Which purchased insurance from an insurance carrier licensed in any state before October 27, 1986, and since October 27, 1986; or
(3) Which was a purchasing group under the requirements of the federal Product Liability Risk Retention Act of 1981 (15 U.S.C. § 3901 et seq.), before October 27, 1986.
(d) Each purchasing group that is required to give notice pursuant to subsection (a) of this section shall also furnish information required by the Commissioner to:
(1) Verify that the entity qualifies as a purchasing group;
(2) Determine where the purchasing group is located; and
(3) Determine appropriate tax treatment.
(e) Any purchasing group which was doing business in the District prior to the enactment of this chapter shall, within 30 days after October 21, 1993, furnish notice to the Mayor pursuant to the provisions of subsection (a) of this section and furnish the information required pursuant to subsections (b) and (c) of this section.
(Oct. 21, 1993, D.C. Law 10-46, § 8, 40 DCR 6082; Mar. 21, 1995, D.C. Law 10-233, § 9, 42 DCR 24; May 21, 1997, D.C. Law 11-268, § 10(aa)(2), 44 DCR 1730.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 35-2907.
Legislative History of Laws
For legislative history of D.C. Law 10-46, see Historical and Statutory Notes following § 31-4101.
For legislative history of D.C. Law 10-233, see Historical and Statutory Notes following § 31-4103.
For legislative history of D.C. Law 11-268, see Historical and Statutory Notes following § 31-4101.
(a) A purchasing group may not purchase insurance from a risk retention group that is not chartered in a state or from an insurer not admitted in the state in which the purchasing group is located, unless the purchase is effected through a licensed agent or broker acting pursuant to the surplus lines laws and regulations of such a state.
(b) A purchasing group which obtains liability insurance from an insurer not admitted in the District or a risk retention group shall inform each of the members of the group that has a risk resident or located in the District that such a risk is not protected by an insurance insolvency guaranty fund in the District, and that the risk retention group or the insurer may not be subject to all the insurance laws and regulations of the District.
(c) No purchasing group may purchase insurance providing for a deductible or self-insured retention applicable to the group as a whole; however, coverage may provide for a deductible or self-insured retention applicable to individual members.
(d) Purchases of insurance by purchasing groups are subject to the same standards regarding aggregate limits which are applicable to all purchases of group insurance.
(Oct. 21, 1993, D.C. Law 10-46, § 9, 40 DCR 6082.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 35-2908.
Legislative History of Laws
For legislative history of D.C. Law 10-46, see Historical and Statutory Notes following § 31-4101.
Premium taxes and taxes on premiums paid for coverage of risks resident or located in the District by a purchasing group or any members of the purchasing groups shall be:
(1) Imposed 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; and
(2) Paid first by the insurance source, and if not by the source by the agent or broker for the purchasing group, and if not by the agent or broker then by the purchasing group, and if not by the purchasing group then by each of its members.
(Oct. 21, 1993, D.C. Law 10-46, § 10, 40 DCR 6082.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 35-2909.
Legislative History of Laws
For legislative history of D.C. Law 10-46, see Historical and Statutory Notes following § 31-4101.
The Commissioner is authorized to make use of any of the powers established under the Insurance Code of the District of Columbia to enforce the laws of the District of Columbia not specifically preempted by the federal Liability Risk Retention Act of 1986 (15 U.S.C. § 3901 et seq.), including the Commissioner's administrative authority to investigate, issue subpoenas, conduct depositions and hearings, issue orders, impose penalties, and seek injunctive relief. With regard to any investigation, administrative proceedings, or litigation, the Commissioner can rely on the procedural laws of the District. The injunctive authority of the Commissioner, in regard to risk retention groups, is restricted by the requirement that any injunction be issued by a court of competent jurisdiction.
(Oct. 21, 1993, D.C. Law 10-46, § 11, 40 DCR 6082; Apr. 9, 1997, D.C. Law 11-255, § 41, 44 DCR 1271; May 21, 1997, D.C. Law 11-268, § 10(aa)(2), 44 DCR 1730.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 35-2910.
Legislative History of Laws
For legislative history of D.C. Law 10-46, see Historical and Statutory Notes following § 31-4101.
Law 11-255, the "Second Technical Amendments Act of 1996," was introduced in Council and assigned Bill No. 11-, which was referred to the Committee of the Whole. The Bill was adopted on first and second readings on November 7, 1996, and December 3, 1996, respectively. Signed by the Mayor on December 24, 1996, it was assigned Act No. 11-519 and transmitted to both Houses of Congress for its review. D.C. Law 11-255 became effective on April 9, 1997.
For legislative history of D.C. Law 11-268, see Historical and Statutory Notes following § 31-4101.
(a) No person, firm, association, or corporation shall act or aid in any manner in soliciting, negotiating, or procuring liability insurance in the District from a risk retention group unless the person, firm, association, or corporation is licensed as an insurance agent or broker in accordance with the District of Columbia insurance licensing laws.
(b)(1) No person, firm, association, or corporation shall act or aid in any manner in soliciting, negotiating, or procuring liability insurance in the District for a purchasing group from an authorized insurer or a risk retention group chartered in a state unless the person, firm, association, or corporation is licensed as an insurance agent or broker in accordance with the District of Columbia insurance licensing laws.
(2) No person, firm, association, or corporation shall act or aid in any manner in soliciting, negotiating, or procuring liability insurance coverage in the District for any member of a purchasing group under a purchasing group's policy unless the person, firm, association, or corporation is licensed as an insurance agent or broker in accordance with the District of Columbia insurance licensing laws.
(3) No person, firm, association, or corporation shall act or aid in any manner in soliciting, negotiating, or procuring liability insurance from an insurer not authorized to do business in the District on behalf of a purchasing group located in this state unless the person, firm, association, or corporation is licensed as a surplus lines agent or excess line broker in accordance with the District of Columbia insurance licensing laws.
(c) For purposes of acting as an agent or broker for a risk retention or purchasing group pursuant to subsections (a) and (b) of this section, the requirement of residence in the District shall not apply.
(d) Every person, firm, association, or corporation licensed pursuant to the provisions of Chapter 28 of Title 47, on business placed with risk retention groups or written through a purchasing group, shall inform each prospective insured of the provisions of the notice required by § 31-4108(b) in the case of a risk retention group and § 31-4107(c) in the case of a purchasing group.
(Oct. 21, 1993, D.C. Law 10-46, § 12, 40 DCR 6082; Feb. 27, 1996, D.C. Law 11-90, § 3(g), 42 DCR 7155.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 35-2911.
Temporary Amendments of Section
For temporary (225 day) amendment of section, see § 3(g) of Insurance Omnibus Temporary Amendment Act of 1995 (D.C. Law 11-36, September 8, 1995, law notification 42 DCR 5305).
Emergency Act Amendments
For temporary amendment of section, see § 3(g) of the Insurance Omnibus Emergency Amendment Act of 1995 (D.C. Act 11-48, May 15, 1995, 42 DCR 2544) and § 3(g) of the Insurance Omnibus Congressional Recess Emergency Amendment Act of 1995 (D.C. Act 11-97, July 19, 1995, 42 DCR 3844).
Legislative History of Laws
For legislative history of D.C. Law 10-46, see Historical and Statutory Notes following § 31-4101.
For legislative history of D.C. Law 11-90, see Historical and Statutory Notes following § 31-4101.
An order issued by any district court of the United States enjoining a risk retention group from soliciting or selling insurance, or operating in any state, or in all states or in any territory or possession of the United States, upon finding that such a group is in hazardous financial or financially impaired condition shall be enforceable in the courts of the state.
(Oct. 21, 1993, D.C. Law 10-46, § 13, 40 DCR 6082.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 35-2912.
Legislative History of Laws
For legislative history of D.C. Law 10-46, see Historical and Statutory Notes following § 31-4101.
