N.Y. Insurance Law § 5905: Risk retention groups; notice, prohibited solicitation, coverage and ownership

§ 5905. Risk retention groups; notice, prohibited solicitation,

coverage and ownership. (a) Notice to purchasers. (1) Every insurance

policy issued by a risk retention group shall contain in ten point type

on the front page and on the declaration page, the following notice:

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 regulations of your state.

State insurance insolvency guaranty funds are not

available for your risk retention group.

(2) Every application for insurance from a risk retention group shall

prominently contain a similar notice.

(b) Prohibited acts regarding solicitation or sale. The following acts

by a risk retention group are prohibited:

(1) The solicitation or sale of insurance to any person who is not

eligible for membership in such 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.

(c) Prohibited coverage. The terms of any insurance policy issued or

issued for delivery in this state by any such 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.

(d) Prohibition on ownership by an insurer. No risk retention group

shall do business in this state if an insurer is directly or indirectly

a member or owner of such risk retention group, other than in the case

of a risk retention group all of whose members are insurers.