RS 22:482

§482. Definitions As used in this Subpart, the following terms shall have the meanings ascribed to them in this Section: (1) "Commissioner" means the commissioner of insurance of Louisiana or the commissioner, director, or superintendent of insurance in any other state. (2) "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: (a) Any person who performs that work. (b) 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. (3) "Domicile", for purposes of determining the state in which a purchasing group is domiciled, means: (a) For a corporation, the state in which the purchasing group is incorporated. (b) For an unincorporated entity, the state of its principal place of business. (4) "Hazardous financial condition" means that, based on its present or reasonably anticipated financial condition, a risk retention group, although not yet financially impaired or insolvent, is unlikely to be able to: (a) Meet obligations to policyholders with respect to known claims and reasonably anticipated claims. (b) Pay other obligations in the normal course of business. (5) "Insurance" means primary insurance, excess insurance, reinsurance, surplus lines insurance, and any other arrangement for shifting and distributing risk which is determined to be insurance under the laws of this state. (6)(a) "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: (i) Any business, whether profit or nonprofit, trade, product, services including professional services, premises, or operations. (ii) Any activity of any state or local government, or any agency or political subdivision thereof. (b) "Liability" 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.). (7) "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 Paragraph (6) of this Section. (8) "Plan of operation or a feasibility study" means an analysis which presents the expected activities and results of a risk retention group including, at a minimum: (a) The coverages, deductibles, coverage limits, rates, and rating classification systems for each line of insurance the group intends to offer. (b) Historical and expected loss experience of the proposed members and national experience of similar exposures. (c) Pro forma financial statements and projections. (d) 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. (e) Identification of management, underwriting and claims procedures, managerial oversight methods, investment policies, and reinsurance agreements. (f) Such other matters as may be prescribed by the department for liability insurance companies authorized by the insurance laws of the state. (9) "Product liability" means the liability for personal injury and property damages arising from the manufacture, design, importation, distribution, packaging, labeling, lease, or sale of a product as defined and construed by the laws of this state. (10) "Purchasing group" means any group domiciled in any state which: (a) Has as one of its purposes the purchase of liability insurance on a group basis. (b) Purchases such insurance only for its group members and only to cover their similar or related liability exposure, as described in Subparagraph (c) of this Paragraph. (c) 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. (11) "Risk Retention Amendments of 1986" means Public Law 99-563. (12) "Risk retention group" means any corporation or other limited liability association formed under the laws of any state, Bermuda, or the Cayman Islands: (a) Whose primary activity consists of assuming and spreading all, or any portion, of the liability exposure of its group members. (b) Which is organized for the primary purpose of conducting the activity described under Subparagraph (a) of this Paragraph. (c) Which: (i) Is chartered and licensed as a liability insurance company and authorized to engage in the business of insurance under the laws of any state. (ii) Before January 1, 1985 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 as such terms were defined in the federal Product Liability Risk Retention Act of 1981 before the date of the enactment of the federal Risk Retention Amendments of 1986. (d) 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. (e) Which: (i) 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; or (ii) Has as its sole owner an organization which has as its members only persons who comprise the membership of the risk retention group, and has as its owners only persons who comprise the membership of the risk retention group and who are provided insurance by such group. (f) Whose members are engaged in businesses or activities similar or related with respect to the liability of which such members or secondary owners are exposed by virtue of any related, similar, or common business trade, product, services, premises, or operations. (g) Whose activities do not include the provision of insurance other than: (i) Liability insurance for assuming and spreading all or any portion of the liability of its group members. (ii) Reinsurance with respect to the liability of any other risk retention group or any members or secondary owners of such other group which is engaged in businesses or activities so that such group or member or secondary owner meets the requirement described in Subparagraph (e) of this Paragraph from membership in the risk retention group which provides such reinsurance. (h) The name of which includes the phrase "Risk Retention Group". (13) "State" means any state of the United States and the District of Columbia. Acts 1987, No. 462, §1, eff. Sept. 1, 1987; Acts 1995, No. 1203, §1, eff. June 29, 1995; Redesignated from R.S. 22:2072 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2009, No. 503, §1.