The following definitions govern this chapter: (a) âCommissionerâ means the Insurance Commissioner of this state or the commissioner, director, or superintendent of insurance of any other state. (b) âDomicile,â for purposes of determining the state in which a purchasing group is domiciled, means the following: (1) For a corporation, the state in which the purchasing group is incorporated and registered to do business pursuant to the federal Liability Risk Retention Act (15 U.S.C. Sec. 3901 and following). (2) For an unincorporated entity, the state of its principal place of business and in which it is registered to do business under the federal Liability Risk Retention Act (15 U.S.C. 3901 and following). (c) âHazardous financial conditionâ means that, based on its present or reasonably anticipated financial condition, a risk retention group is unlikely to be able to do either of the following: (1) Meet obligations to policyholders with respect to known claims and reasonably anticipated claims. (2) Pay other obligations in the normal course of business. (d) âInsuranceâ means primary insurance, excess insurance, reinsurance, surplus lines insurance, and any other arrangement for shifting and distributing risk that is determined to be insurance under the laws of this state. (e) (1) âLiabilityâ 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 the other persons resulting from or arising out of any of the following: (A) Any business, whether profit or nonprofit, trade, product, services, including professional services, premises, or operations. (B) Any activity of any state or local government, or any agency or political subdivision thereof. (2) âLiabilityâ includes financial responsibility required by the state for any activity for which an individual is required to obtain a license or certificate to provide a service. For purposes of this subdivision, a state agency has discretion to accept or deny proof of financial responsibility. (3) âLiabilityâ does not include personal risk liability or an employerâs liability with respect to its employees other than legal liability under the Federal Employersâ Liability Act (45 U.S.C. Sec. 51 et seq.). (f) âPersonal risk liabilityâ 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 subdivision (f). (g) âPlan of operation or a feasibility studyâ with respect to risk retention groups chartered in California includes analysis which presents the expected activities and results of a risk retention group including, at a minimum, all of the following: (1) Information to demonstrate that its members are engaged in businesses or activities similar or related with respect to the liability to which those members are exposed by virtue of any related, similar, or common business, trade, product, services, premises, or operations. (2) 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. (3) Historical and expected loss experience of the proposed members and national experience of similar exposures, to the extent that this experience is reasonably available. (4) Pro forma financial statements and projections. (5) 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. (6) Identification of management, underwriting and claims procedures, marketing methods, managerial oversight methods, investment policies and reinsurance agreements.
‹ Prev All California sections Next ›
Lexace provides legal information, not legal advice, and no attorney–client relationship is created. Statute text is provided for general information and may not reflect the most recent amendments; verify against the official state code.