Section 26.1-46-03 - Risk retention groups not chartered in this state - Requirements for operationRisk retention groups chartered in states other than this state and seeking to do business as a risk retention group in this state shall observe and abide by the laws of this state as follows:
1. Notice of operations and designation of commissioner as agent. Before offering insurance in this state, a risk retention group shall submit to the commissioner on a form prescribed by the national association of insurance commissioners all of the following: a. 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 such other information, including information on its membership, as the commissioner of this state may require to verify that the risk retention group is qualified under subsection 11 of section 26.1-46-01.b. A copy of its plan of operation or a feasibility study and revisions of such plan or study submitted to its state of domicile; provided, however, that the provision relating to the submission of a plan of operation or a feasibility study does not apply with respect to any line or classification of liability insurance which was defined in the Product Liability Risk Retention Act of 1981 before October 27, 1986, and was offered before such date by any risk retention group which had been chartered and operating for not less than three years before such date.c. The risk retention group shall submit a copy of any revision to its plan of operation or feasibility study required by section 26.1-46-02 at the same time that the revision is submitted to the commissioner of its chartering state.d. A statement of registration, for which a filing fee must be determined by the commissioner, which designated the commissioner as its agent for the purpose of receiving service of legal documents or process.2. Financial condition. Any risk retention group doing business in this state shall submit to the commissioner upon the commissioner's request all of the following:a. A copy of the group's financial statement submitted to its state of domicile, which must 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 according to criteria established by the national association of insurance commissioners.b. A copy of each examination of the risk retention group as certified by the commissioner or public official conducting the examination.c. Upon request by the commissioner, a copy of any audit performed with respect to the risk retention group.d. Such information as may be required to verify its continuing qualifications as a risk retention group under subsection 11 of section 26.1-46-01.3. Taxation. a. All premiums paid for coverages within this state to risk retention groups are subject to taxation at the same rate and subject to the same interest, fines, and penalties for nonpayment that are applicable to foreign-admitted insurers.b. To the extent insurance producers are utilized, the insurance producers shall report and pay the taxes for the premiums for risks which the insurance producers have placed with or on behalf of a risk retention group not chartered in this state.c. To the extent the insurance producers are not utilized or fail to pay the tax, each risk retention group shall pay the tax for risks insured within the state. Further, each risk retention group shall report all premiums paid to it for risks insured within the state.d. This subsection does not apply to risk retention groups doing business in this state which have fewer than twenty-six resident members or insureds.e. To the extent that insurance producers are utilized pursuant to section 26.1-46-11, each insurance producer shall keep a complete and separate record of all policies procured from each risk retention group, which record must be open to examination by the commissioner, as provided in sections 26.1-03-19.1 through 26.1-03-22. These records must, for each policy and each kind of insurance provided thereunder, include the limit of liability, the time period covered, the effective date, the name of the risk retention group which issued the policy, the gross premium charged, and the amount of return premiums, if any.4. Compliance with prohibited practices chapter. Any risk retention group, its insurance producers and representatives, shall comply with chapter 26.1-04.5. Examination regarding financial condition. Any 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 has not initiated an examination or does not initiate an examination, within sixty days after a request by the commissioner of this state. Any such examination must be coordinated to avoid unjustified repetition and conducted in an expeditious manner and in accordance with the national association of insurance commissioners examiner handbook.6. Notice to purchasers. Any policy issued by a risk retention group must contain in ten-point type of the front page and 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.
7. Prohibited acts regarding solicitation or sale. The following acts by a risk retention group are prohibited: a. The solicitation or sale of insurance by a risk retention group to any person who is not eligible for membership in such group.b. 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.8. Prohibition on ownership by an insurance company. No risk retention group may be allowed to do business in this state if an insurance company 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 insurance companies.9. Delinquency proceedings. A risk retention group not chartered in this state and doing business in this state shall 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 subsection 4.10. Any risk retention group, its insurance producers, and representatives shall comply with chapter 26.1-04. The terms of any insurance policy issued by any risk retention group may 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.11. A risk retention group that violates any provisions of this chapter will be subject to fines and penalties, including revocation of its right to do business in this state, applicable to licensed insurers generally. In addition to complying with the requirements of this section, any risk retention group operating in this state prior to enactment of this chapter, within thirty days after the effective date of this chapter, shall comply with the provision of subdivision a of subsection 1.