31A-15-202 - Definitions.

31A-15-202. Definitions.
As used in this part:
(1) "Completed operations liability" means liability, including liability for activitieswhich are completed or abandoned before the date of the occurrence giving rise to the liability,arising out of the installation, maintenance, or repair of any product at a site which is not ownedor controlled by:
(a) any person who performs that work; or
(b) any person who hires an independent contractor to perform that work.
(2) "Domicile," for purposes of determining the state in which a purchasing group isdomiciled, means:
(a) for a corporation, the state in which the purchasing group is incorporated; and
(b) for an unincorporated entity, the state of its principal place of business.
(3) "Hazardous financial condition" means that a risk retention group, based on itspresent or reasonably anticipated financial condition, although not yet financially impaired orinsolvent, is unlikely to be able:
(a) to meet obligations to policyholders with respect to known claims and reasonablyanticipated claims; or
(b) to pay other obligations in the normal course of business.
(4) "Insurance" means primary insurance, excess insurance, reinsurance, surplus linesinsurance, and any other arrangement for shifting and distributing risk which is determined to beinsurance under the laws of this state.
(5) (a) "Liability" means legal liability for damages, including costs of defense, legalcosts and fees, and other claims expenses because of injuries to other persons, damage to theirproperty, or other damage or loss to other persons, resulting from or arising out of:
(i) any profit or nonprofit business, trade, product, professional or other services,premises, or operations; or
(ii) any activity of any state or local government or any agency or political subdivision ofany state or local government.
(b) "Liability" does not include personal risk liability and an employer's liability withrespect to its employees other than legal liability under the federal Employers' Liability Act.
(6) "NAIC" means the National Association of Insurance Commissioners.
(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 householdresponsibilities or activities rather than from responsibilities or activities referred to inSubsection (5).
(8) "Plan of operation or a feasibility study" means an analysis which presents theexpected activities and results of a risk retention group, including:
(a) information sufficient to verify that its members are engaged in businesses oractivities similar or related with respect to the liability to which members are exposed by virtueof any related, similar or common business, trade, product, services, premises or operations;
(b) for each state in which it intends to operate, the coverages, deductibles, coveragelimits, rates, and rating classification systems for each line of insurance the group intends tooffer;
(c) historical and expected loss experience of the proposed members and nationalexperience of similar exposures to the extent that this experience is reasonably available;


(d) pro forma financial statements and projections;
(e) appropriate opinions by a qualified, independent casualty actuary, including adetermination of minimum premium or participation levels required to commence operations andto prevent a hazardous financial condition;
(f) identification of management, underwriting and claims procedures, marketingmethods, managerial oversight methods, investment policies, and reinsurance agreements;
(g) identification of each state in which the risk retention group has obtained, or soughtto obtain, a charter and license, and a description of its status in each such state; and
(h) any other matters required by the commissioner of the state in which the riskretention group is chartered for liability insurance companies authorized by the insurance laws ofthat state.
(9) (a) "Product liability" means liability for damages because of any personal injury,death, emotional harm, consequential economic damage, or property damage, including damagesresulting from the loss of use of property, if the liability arises out of the manufacture, design,importation, distribution, packaging, labeling, lease, or sale of a product.
(b) "Product liability" does not include the liability of any person for those damagesdescribed in Subsection (9)(a) if the product involved was in the possession of the person whenthe incident giving rise to the claim occurred.
(10) "Purchasing group" means any group which:
(a) has as one of its purposes the purchase of liability insurance on a group basis;
(b) purchases liability insurance only for its group members and only to cover theirsimilar or related liability exposure, as described in Subsection (10)(c);
(c) is composed of members whose businesses or activities are similar or related withrespect to the liability to which members are exposed by virtue of any related, similar, orcommon business, trade, products, services, premises, or operations; and
(d) is domiciled in any state.
(11) "Risk retention group" means any corporation or other limited liability association:
(a) whose primary activity consists of assuming and spreading all, or any portion of, theliability exposure of its group members;
(b) which is organized for the primary purpose of conducting the activity described underSubsection (11)(a);
(c) which:
(i) is chartered and licensed as a liability insurance company and authorized to engage inthe business of insurance under the laws of any state; or
(ii) (A) before January 1, 1985, was chartered or licensed and authorized to engage in thebusiness of insurance under the laws of Bermuda or the Cayman Islands and, before January 1,1985, had certified to the insurance commissioner of at least one state that it satisfied thecapitalization requirements of that state;
(B) however, any such group as described in Subsection (11)(c)(ii)(A) shall beconsidered to be a risk retention group only if it has been engaged in business continuously sinceJanuary 1, 1985, and only for the purpose of continuing to provide insurance to cover productliability or completed operations liability, as these terms were defined in the Product LiabilityRisk Retention Act of 1981 before the date of the enactment of the Liability Risk Retention Actof 1986;
(d) which does not exclude any person from membership in the group solely to provide

for members of the group a competitive advantage over the excluded person;
(e) which:
(i) has as its owners only persons who comprise the membership of the risk retentiongroup and who are provided insurance by the group; or
(ii) has as its sole owner an organization which:
(A) has as its members only persons who comprise the membership of the risk retentiongroup; and
(B) has as its owners only persons who comprise the membership of the risk retentiongroup and who are provided insurance by the group;
(f) whose members are engaged in businesses or activities similar or related with respectto the liability to which the members are exposed by virtue of any related, similar, or commonbusiness trade, products, services, premises or operations;
(g) whose activities do not include providing insurance other than:
(i) liability insurance for assuming and spreading all or any portion of the liability of itsgroup members; and
(ii) reinsurance with respect to the liability of any other risk retention group, or anymembers of the other group, which is engaged in businesses or activities so that the group ormember meets the requirement described in Subsection (11)(f) for membership in the riskretention group which provides the reinsurance; and
(h) the name of which includes the phrase "risk retention group."

Amended by Chapter 324, 2010 General Session