§ 6053. Risk retention groups not chartered in this State
Risk retention groups chartered and licensed in states other than this State and seeking
to do business as a risk retention group in this State shall comply with the laws
of this State as follows:
(1) Notice of operations and designation of Commissioner as agent. Before offering insurance in this State, a risk retention group shall submit to the
Commissioner:
(A) a statement identifying the state or states in which the risk retention group is chartered
and licensed as a liability insurance company, charter date, its principal place of
business, and such other information, including information on its membership, as
the Commissioner of this State may require to verify that the risk retention group
is qualified under subdivision 6051(11) of this title;
(B) a copy of its plan of operations and feasibility study and revisions of such 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 that:
(i) was defined in the Product Liability Risk Retention Act of 1981 before October 27,
1986; and
(ii) was offered before such date by any risk retention group that had been chartered and
operating for not less than three years before such date; and
(iii) the risk retention group shall submit a copy of any revision to its plan of operation
or feasibility study required by subsection 6052(b) of this title at the time that such revision has become effective in its chartering state; and
(C) a statement of registration, for which a filing fee shall be determined by the Commissioner,
that designates the Commissioner as its agent for the purpose of receiving service
of legal documents or process.
(2) Financial condition. Any risk retention group doing business in this State shall submit to the Commissioner:
(A) a copy of the group’s financial statement submitted to the state in which the risk
retention group is chartered and licensed that 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;
(B) a copy of each examination of the risk retention group as certified by the Commissioner
or public official conducting the examination; and
(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.
(3) Taxation. Each risk retention group subject to the provisions of this section shall be liable
for the payment of premium taxes and taxes on premiums of direct business for risks
resident or located within this State as provided in 32 V.S.A. § 8551, and shall report to the Commissioner the net premiums written for risks resident
or located within this State. Such risk retention group shall be subject to taxation,
and any applicable fines and penalties related thereto, on the same basis as a foreign
admitted insurer.
(4) Compliance with Unfair Claims Settlement Practices Law. Any risk retention group, its agents and representatives shall comply with the Unfair
Claims Settlement Practices Act of this State, subdivision 4724(9) of this title.
(5) Deceptive, false, or fraudulent practices. Any risk retention group shall comply with subdivisions 4724(1)-(5) of this title
regarding deceptive, false, or fraudulent acts or practices.
(6) Examination regarding financial condition. Any risk retention group may be required to submit to an examination by the Commissioner
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 60 days after a request by the Commissioner of this State. Any
such examination shall be coordinated to avoid unjustified repetition and conducted
in an expeditious manner and in accordance with the Examiner Handbook of the National
Association of Insurance Commissioners.
(7) Notice to purchasers. Risk retention groups shall be required to notify purchasers as required by 15 U.S.C. § 3902(a)(1)(I).
(8) Prohibited acts regarding solicitation or sale. The following acts by a risk retention group are hereby prohibited:
(A) the solicitation or sale of insurance by a risk retention group to any person who
is not eligible for membership in such 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) Prohibition on ownership by an insurance company. No risk retention group shall be allowed to do business in this State if an insurance
company, other than an affiliated risk retention group, captive or other policyholder-owned
insurance company, or a risk retention group all of whose members are insurance companies,
is directly or indirectly a member or owner of such risk retention group.
(10) Prohibited coverage. The terms of any insurance policy issued by any risk retention group shall not provide,
or be construed to provide, coverage prohibited generally by statute of this State
or declared unlawful by the highest court of this State whose law applies to such
policy. This subsection shall not be construed to require the preapproval of forms
by the Commissioner.
(11) Delinquency proceedings. After an examination under subdivision 6053(6) of this title, a risk retention group not chartered in this State and doing business in this State
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 within the meaning of chapter 145 of this title.
(12) Penalties. A risk retention group subject to this section that violates any provision of this
chapter will be subject to the fines and the penalties including revocation of its
right to do business in this State, applicable to licensed insurers generally under
this title.
(13) Operation prior to enactment of this chapter. In addition to complying with the requirements of this section, any risk retention
group operating in this State prior to enactment of this chapter shall, within 30
days after December 31, 1992, comply with the provision of subdivision (1)(A) of this
section. (Added 1991, No. 249 (Adj. Sess.), § 23, eff. Dec. 31, 1992; amended 1993, No. 40, § 10, eff. June 3, 1993; 2021, No. 25, § 29, eff. May 12, 2021.)