60E.04 RISK RETENTION GROUPS NOT CHARTERED IN THIS STATE.
Subdivision 1. Regulation.
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 must observe and abide
by the laws of this state as set forth in subdivisions 2 to 12.
Subd. 2. Notice of operations and designation of commissioner as agent.
offering insurance in this state, a risk retention group shall submit to the commissioner on a
form prescribed by the NAIC:
(1) a statement identifying the state or states in which the risk retention group is chartered
and licensed as a liability insurance company, date of chartering, its principal place of business,
and other information including information on its membership, the commissioner may require to
verify that the risk retention group is qualified under section
60E.02, subdivision 12
(2) a copy of its plan of operations or a 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 a feasibility study
shall not apply with respect to a line or classification of liability insurance that was defined in
the Product Liability Risk Retention Act of 1981 before October 27, 1986, and was offered
before that date by a risk retention group that had been chartered and operating for not less than
three years before that date.
(b) The risk retention group shall submit a copy of any revision to its plan of operation or
feasibility study required by section
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 commissioner, that designates the commissioner as its agent for the
purpose of receiving service of legal documents or process.
Subd. 3. Financial condition.
A risk retention group doing business in this state shall submit
to the commissioner:
(1) 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 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 commissioner, a copy of any information or document pertaining to
any outside audit performed with respect to the risk retention group; and
(4) the information required to verify its continuing qualification as a risk retention group
60E.02, subdivision 12
Subd. 4. Taxation.
(a) Each risk retention group must file with the commissioner of revenue
all returns and pay to the commissioner of revenue all amounts required under chapter 297I.
(b) To the extent licensed agents or brokers are utilized in accordance with section
they shall report to the commissioner of revenue the premiums for direct business for risks
resident or located within this state which the licensees have placed with or on behalf of a risk
retention group not chartered in this state.
(c) To the extent that insurance agents or brokers are utilized in accordance with section
, each agent or broker shall keep a complete and separate record of all policies procured
from each risk retention group, which must be open to examination by the commissioner, as
provided in section
and by the commissioner of revenue. These records must, for each
policy and each kind of insurance provided, include the following:
(1) the limit of liability;
(2) the time period covered;
(3) the effective date;
(4) the name of the risk retention group which issued the policy;
(5) the gross premium charged; and
(6) the amount of return premiums, if any.
Subd. 5. Compliance with unfair claims settlement practices law.
A risk retention group,
its agents and representatives, shall comply with sections
72A.20, subdivision 12
Subd. 6. Deceptive, false, or fraudulent practices.
A risk retention group shall comply with
regarding deceptive, false, or fraudulent acts or practices. However, if
the commissioner seeks an injunction regarding this conduct, the injunction must be obtained
from a court of competent jurisdiction.
Subd. 7. Examination regarding financial condition.
A risk retention group must 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 commerce.
The examination must be coordinated to avoid unjustified repetition and conducted in an
expeditious manner and in accordance with the National Association of Insurance Commissioner's
Subd. 8. Notice to purchasers.
An application form for insurance from a risk retention
group and the front and declaration pages of a policy issued by a risk retention group must contain
in 10-point type, the following 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 rules of your state. State insurance insolvency
guaranty funds are not available for your risk retention group.
Subd. 9. Prohibited acts regarding solicitation or sale.
The following acts by a risk
retention group are prohibited:
(1) the solicitation or sale of insurance by a risk retention group to a person who is not
eligible for membership in the group; and
(2) the solicitation or sale of insurance by, or operation of, a risk retention group that is in a
hazardous financial condition or is financially impaired.
Subd. 10. Prohibition on ownership by an insurance company.
No risk retention group
shall be allowed to do business in this state 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.
Subd. 11. Prohibited coverage.
The terms of an insurance policy issued by a risk retention
group shall not provide, or be construed to provide, coverage prohibited by state statute or
declared unlawful by the highest court of the state whose law applies to the policy.
Subd. 12. Delinquency proceedings.
A risk retention group not chartered in this state and
doing business in this state must 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 section
Subd. 13. Penalties.
A risk retention group that violates any provision of this chapter
is subject to fines and penalties including revocation of its right to do business in this state,
applicable to licensed insurers generally.
History: 1987 c 192 s 4; 1988 c 719 art 2 s 2; 1991 c 325 art 21 s 4; 1993 c 299 s 15-22;
1997 c 31 art 2 s 2; 2000 c 394 art 2 s 10