§ 58-22-10. Definitions.
§ 58‑22‑10. Definitions.
As used in this Article:
(1) "Completedoperations liability" means liability arising out of the installation,maintenance, or repair of any product at a site that is not owned or controlledby:
a. Any person whoperforms that work; or
b. Any person who hiresan independent contractor to perform that work;
butincludes liability for activities that are completed or abandoned before thedate of the occurrence giving rise to the liability.
(2) "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 anunincorporated entity, the state of its principal place of business.
(3) "Hazardousfinancial condition" means that, based on its present or reasonablyanticipated financial condition, a risk retention group is insolvent or,although not yet financially impaired or insolvent, is unlikely to be able:
a. To meet obligationsto policyholders with respect to known claims and reasonably anticipatedclaims; or
b. To pay otherobligations in the normal course of business.
(4) "Insurance"means primary insurance, excess insurance, reinsurance, surplus linesinsurance, and any other arrangement for shifting and distributing risk that isdetermined to be insurance under the laws of this State.
(5) "Liability"means legal liability for damages, including costs of defense, legal costs andfees, and other claims expenses, because of injuries to other persons, damageto their property, or other damage or loss to such other persons resulting fromor arising out of any profit or nonprofit business, trade, product,professional or other services, premises, or operations; or any activity of anystate or local government, or any agency or political subdivision thereof.Liability does not include personal risk liability or an employer's liabilitywith respect to its employees other than legal liability under the FederalEmployers' Liability Act (45 U.S.C. § 51 et seq.).
(6) "Personal riskliability" means liability for damage because of injury to any person,damage to property, or other loss or damage resulting from any personal,familial, or household responsibilities or activities. Personal risk liabilitydoes not include liability as defined in subdivision (5) of this section.
(7) "Plan ofoperation" or "feasibility study" means an analysis thatpresents the expected activities and results of a risk retention groupincluding, at a minimum:
a. For each state inwhich the group intends to do business, the coverages, deductibles, coveragelimits, rates, and rating classification systems for each kind of insurance thegroup intends to offer;
b. Historical andexpected loss experience of the proposed members and national experience of similarexposures;
c. Prospectivefinancial statements and projections;
d. Appropriate opinionsby a qualified, independent casualty actuary, including a determination ofminimum premium or participation levels required to commence operations and toprevent a hazardous financial condition;
e. Identification ofmanagement, underwriting and claim procedures, marketing methods, managerialoversight methods, reinsurance agreements, and investment policies;
f. Identification ofeach state in which the group has obtained, or sought to obtain, a charter andlicense, and a description of its status in each such state;
g. Informationsufficient to verify that the group's members are engaged in businesses oractivities similar or related with respect to the liability to which thosemembers are exposed by virtue of any related, similar, or common business,trade, product, services, premises, or operations; and
h. Such other mattersthat are prescribed by the Commissioner for liability insurance companiesauthorized by this Chapter.
(8) "Productliability" 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 ofthe manufacture, design, importation, distribution, packaging, labeling, lease,or sale of a product; but does not include the liability of any person forthose damages if the product involved was in the possession of such person whenthe incident giving rise to the claim occurred.
(9) "Purchasinggroup" means any group that:
a. Has as one of itspurposes the purchase of liability insurance on a group basis;
b. Purchases suchinsurance only for its group members and only to cover their similar or relatedliability exposure, as described in sub‑subdivision c. of thissubdivision;
c. Is composed ofmembers whose businesses or activities are similar or related with respect tothe liability to which the members are exposed by virtue of any related,similar, or common business, trade, product, services, premises, or operations;and
d. Is domiciled in anystate.
(10) "Risk retentiongroup" means any corporation or other limited liability association:
a. Whose primaryactivity consists of assuming and spreading all or any portion of the liabilityexposure of its group members;
b. That is organizedfor the primary purpose of conducting the activity described under sub‑subdivisiona. of this subdivision;
c. That
(i) Is chartered andlicensed as a liability insurance company and authorized to engage in thebusiness of insurance under the laws of any state; or
(ii) Before January 1,1985, was chartered or licensed and authorized to engage in the business ofinsurance under the laws of Bermuda or the Cayman Islands and, before thatdate, had certified to the insurance regulator of at least one state that itsatisfied the capitalization requirements of such state; except that any suchgroup shall be considered to be a risk retention group only if it has beenengaged in business continuously since that date and only for the purpose ofcontinuing to provide insurance to cover product liability or completedoperations liability, as such terms were defined in the Product Liability RiskRetention Act of 1981 before the effective date of the Risk Retention Act of1986;
d. That does notexclude any person from membership in the group solely to provide for membersof such a group a competitive advantage over such person;
e. That
(i) Has as its membersonly persons who have an ownership interest in the group and that has as itsowners only persons who are members who are provided insurance by the riskretention group; or
(ii) Has as its solemember and sole owner an organization that is owned by persons who are providedinsurance by the risk retention group;
f. Whose members areengaged in businesses or activities similar or related with respect to theliability of which such members are exposed by virtue of any related, similar,or common business trade, product, services, premises, or operations;
g. Whose activities donot include the provision of insurance other than:
(i) Liability insurancefor assuming and spreading all or any portion of the liability of its groupmembers; and
(ii) Reinsurance withrespect to the liability of any other risk retention group, or any members ofsuch other group, that is engaged in businesses or activities so that suchgroup or member meets the requirement described in sub‑subdivision f. ofthis subdivision from membership in the risk retention group that provides suchreinsurance; and
h. The name of whichincludes the phrase "Risk Retention Group". (1985 (Reg. Sess., 1986), c.1013, s. 8; 1987, c. 310, s. 1; 1993, c. 452, s. 35; 2001‑223, s. 18.)