N.Y. Insurance Law § 5902: Definitions

§ 5902. Definitions. The terms used in this article shall have the

meanings set forth in this chapter, except to the extent added or

modified by the following:

(a) "Commissioner" means the commissioner, director or superintendent

of financial services in any other state.

(b) "Completed operations liability" means liability arising out of

the installation, maintenance, or repair of any product at a site which

is not owned or controlled by:

(1) any person who performs that work; or

(2) 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.

(c) "Domicile", for purposes of determining the state in which a

purchasing group is domiciled, means:

(1) for a corporation, the state in which the purchasing group is

incorporated; and

(2) for an unincorporated entity, the state of its principal place of

business.

(d) "Financially impaired" means a risk retention group:

(1) whose admitted assets are less than the sum of its aggregate

liabilities and the amount of surplus to policyholders required to be

maintained by a domestic risk retention group authorized to do the same

kind or kinds of insurance; or

(2) whose admitted assets are less than the sum of its aggregate

liabilities and outstanding capital stock; or

(3) which is insolvent.

(e) "Hazardous financial condition" means that, based on its present

or reasonably anticipated financial condition, a risk retention group,

although not yet financially impaired, is unlikely to be able:

(1) to meet obligations to policyholders with respect to known claims

and reasonably anticipated claims; or

(2) to pay other obligations in the normal course of business.

(f) "Insolvent" means a risk retention group whose admitted assets are

less than the aggregate amount of its liabilities.

(g) "Insurance" means primary insurance, excess insurance,

reinsurance, excess line insurance, and any other arrangement for

shifting and distributing risk which is determined to be insurance under

the laws of this state.

(h) "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 such other persons resulting from or arising out of:

(1) (A) any business (whether profit or nonprofit), trade, product,

services (including professional services), premises, or operations; or

(B) any activity of any state or local government, or any agency or

political subdivision thereof; and

(2) 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.).

(i) "Located" or "location", for purposes of determining the state in

which a purchasing group is located, shall be defined in regulations

promulgated by the superintendent which shall not be inconsistent with

the Federal Liability Risk Retention Act of 1986 and amendments thereto.

(j) "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 subsection (h) of this section.

(k) "Plan of operation or feasibility study" means an analysis which

presents the expected activities and results of a risk retention group

making application to become chartered and licensed as a domestic

property/casualty insurer in this state, including at least the

following:

(1) information sufficient to verify that its members are engaged in

businesses or activities similar or related with respect to the

liability to which such 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 kind 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 the development of a

hazardous financial condition;

(6) identification of management, underwriting and claims procedures,

marketing methods, managerial oversight methods, investment policies and

reinsurance agreements;

(7) 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

(8) such other matters as may be prescribed by the commissioner of the

state in which the risk retention group is chartered for liability

insurance companies authorized by the insurance laws of the state.

(l) "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 such a person when the incident giving

rise to the claim occurred.

(m) "Purchasing group" means any group formed pursuant to the federal

liability risk retention act of 1986 which:

(1) has as one of its purposes the purchase of liability insurance on

a group basis;

(2) purchases such insurance only for its group members and only to

cover their similar or related liability exposure, as described in

paragraph three of this subsection;

(3) 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

(4) is domiciled in any state.

(n) "Risk retention group" means any corporation or other limited

liability association formed pursuant to the federal liability risk

retention act of 1986:

(1) whose primary activity consists of assuming and spreading all, or

any portion, of the liability exposure of its group members;

(2) which is organized for the primary purpose of conducting the

activity described under paragraph one of this subsection;

(3) which:

(A) 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

(B) before January first, nineteen hundred eighty-five, was chartered

or licensed and authorized to engage in the business of insurance under

the laws of Bermuda or the Cayman Islands and, before such date, had

certified to the insurance commissioner of at least one state that it

satisfied the capitalization requirements of such state, except that any

such group shall be considered to be a risk retention group only if it

has been engaged in business continuously since such date and only for

the purpose of continuing to provide insurance to cover product

liability or completed operations liability;

(4) which does not exclude any person from membership in the group

solely to provide for members of such a group a competitive advantage

over such a person;

(5) which:

(A) has as its owners only persons who comprise the membership of the

risk retention group and who are provided insurance by such group; or

(B) has as its sole owner an organization which has as its members

only persons who comprise the membership of the risk retention group and

which organization has as its owners only persons who comprise the

membership of the risk retention group and who are provided insurance by

the risk retention group;

(6) whose members are engaged in businesses or activities similar or

related with respect to the liability of which such members are exposed

by virtue of any related, similar, or common business trade, product,

services, premises or operations;

(7) whose activities do not include the provision of insurance other

than:

(A) liability insurance for assuming and spreading all or any portion

of the liability of its group members; and

(B) reinsurance with respect to the liability of any other risk

retention group (or any member of such other risk retention group) which

is engaged in businesses or activities which meet the requirement

described in paragraph six of this subsection for membership in the risk

retention group which provides such reinsurance; and

(8) the name of which includes the phrase "risk retention group".

(o) "State" means any state of the United States or the District of

Columbia.

(p) "Superintendent" means the superintendent of financial services of

this state.