§ 3901. — Definitions.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 15USC3901]
TITLE 15--COMMERCE AND TRADE
CHAPTER 65--LIABILITY RISK RETENTION
Sec. 3901. Definitions
(a) As used in this chapter--
(1) ``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 applicable State or Federal law;
(2) ``liability''--
(A) 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, or
(ii) any activity of any State or local government, or
any agency or political subdivision thereof; and
(B) 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.);
(3) ``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 paragraphs (2)(A) and (2)(B);
(4) ``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 the liability exposure of its
group members;
(B) which is organized for the primary purpose of conducting
the activity described under subparagraph (A);
(C) which--
(i) is chartered or licensed as a liability insurance
company under the laws of a State and authorized to engage
in the business of insurance under the laws of such State;
or
(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 this section before October
27, 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 such group; or
(ii) has as its sole owner an organization which has
as--
(I) its members only persons who comprise the
membership of the risk retention group; and
(II) 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 to which such
members 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 similar or related liability exposure
of its group members; and
(ii) reinsurance with respect to the similar or related
liability exposure of any other risk retention group (or any
member of such other group) which is engaged in businesses
or activities so that such group (or member) meets the
requirement described in subparagraph (F) for membership in
the risk retention group which provides such reinsurance;
and
(H) the name of which includes the phrase ``Risk Retention
Group''.\1\
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\1\ So in original. The period probably should be a semicolon.
(5) ``purchasing group'' means any group 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);
(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; and
(D) is domiciled in any State;
(6) ``State'' means any State of the United States or the
District of Columbia; and
(7) ``hazardous financial condition'' means that, based on its
present or reasonably anticipated financial condition, a risk
retention group is unlikely to be able--
(A) to meet obligations to policyholders with respect to
known claims and reasonably anticipated claims; or
(B) to pay other obligations in the normal course of
business.
(b) Nothing in this chapter shall be construed to affect either the
tort law or the law governing the interpretation of insurance contracts
of any State, and the definitions of liability, personal risk liability,
and insurance under any State law shall not be applied for the purposes
of this chapter, including recognition or qualification of risk
retention groups or purchasing groups.
(Pub. L. 97-45, Sec. 2, Sept. 25, 1981, 95 Stat. 949; Pub. L. 98-193,
Dec. 1, 1983, 97 Stat. 1344; Pub. L. 99-563, Secs. 3, 4, 12(b), Oct. 27,
1986, 100 Stat. 3170, 3171, 3177.)
References in Text
The Federal Employers' Liability Act (45 U.S.C. 51 et seq.),
referred to in subsec. (a)(2)(B), is act Apr. 22, 1908, ch. 149, 35
Stat. 65, as amended, which is classified generally to chapter 2
(Sec. 51 et seq.) of Title 45, Railroads. For complete classification of
this Act to the Code, see Short Title note set out under section 51 of
Title 45 and Tables.
Codification
October 27, 1986, referred to in subsec. (a)(4)(C)(ii), was in the
original ``the date of the enactment of the Risk Retention Act of
1986'', which was translated as meaning the date of enactment of the
Risk Retention Amendments of 1986 to reflect the probable intent of
Congress.
Amendments
1986--Subsec. (a)(1) to (3). Pub. L. 99-563, Sec. 3(a), redesignated
par. (2) as (1), added pars. (2) and (3), and struck out former par. (1)
defining completed operations liability, and former par. (3) defining
product liability.
Subsec. (a)(4). Pub. L. 99-563, Sec. 4(a)(1), struck out ``taxable
as a corporation, or as an insurance company, formed under the laws of
any State, Bermuda, or the Cayman Islands'' after ``association'' in
introductory provisions.
Subsec. (a)(4)(A). Pub. L. 99-563, Sec. 4(a)(2), substituted
``liability exposure'' for ``product liability or completed operations
liability risk exposure''.
Subsec. (a)(4)(C). Pub. L. 99-563, Sec. 4(a)(3), amended subpar. (C)
generally. Prior to amendment, subpar. (C) read as follows: ``which is
chartered or licensed as an insurance company and authorized to engage
in the business of insurance under the laws of any State, or which is so
chartered or licensed and authorized before January 1, 1985, under the
laws of Bermuda or the Cayman Islands, except that any group so
chartered or licensed and authorized under the laws of Bermuda or the
Cayman Islands shall be considered to be a risk retention group only
after it has certified to the insurance commissioner of at least one
State that it satisfies the capitalization requirements of such
State;''.
Subsec. (a)(4)(E) to (H). Pub. L. 99-563, Sec. 4(a)(4), added
subpars. (E) to (H), and struck out former subpar. (E) which read as
follows: ``which is composed of member each of whose principal activity
consists of the manufacture, design, importation, distribution,
packaging, labeling, lease, or sale of a product or products;''.
Subsec. (a)(5). Pub. L. 99-563, Sec. 4(b), amended par. (5)
generally. Prior to amendment, par. (5) read as follows: `` `purchasing
group' means any group of persons which has as one of its purposes the
purchase of product liability or completed operations liability
insurance on a group basis;''.
Subsec. (a)(7). Pub. L. 99-563, Sec. 3(b), added par. (7).
Subsec. (b). Pub. L. 99-563, Sec. 12(b), substituted ``liability,
personal risk liability, and insurance'' for ``product liability and
product liability insurance''.
1983--Subsec. (b). Pub. L. 98-193 substituted provision that nothing
in this chapter would be construed to affect either the tort law or the
law governing the interpretation of insurance contracts of any State,
and that the definitions of product liability and product liability
insurance under any State law would not be applied for the purposes of
this chapter, including recognition or qualification of risk retention
groups or purchasing groups for provision that the definition of product
liability in this section would not be construed to affect either the
tort law or the law governing the interpretation of insurance contracts
of any State.
Effective Date of 1986 Amendment; Applicability
Section 11(a), (b), and (c)(2) of Pub. L. 99-563 provided that:
``(a) General Rule.--Subject to subsection (b), this Act [see Short
Title of 1986 Amendment note below] shall take effect on the date of its
enactment [Oct. 27, 1986].
``(b) Special Rule Regarding Feasibility Study.--The provisions of
section 3(d) of the Liability Risk Retention Act of 1986 (as added by
section 5(b) of this Act) [15 U.S.C. 3902(d)], relating to the
submission of a feasibility study, shall not apply with respect to any
line or classification of liability insurance which--
``(1) was defined in the Product Liability Risk Retention Act of
1981 [Pub. L. 97-45, which enacted this chapter] before the date of
the enactment of this Act [Oct. 27, 1986]; and
``(2) was offered before such date of enactment by any risk
retention group which has been chartered and operating for not less
than 3 years before such date of enactment.
``(c) Rule Regarding Pollution Liability.--
``(2) Nothing in this Act shall be construed, interpreted or
applied to diminish the obligations of any person to establish or
maintain evidence of financial responsibility or otherwise comply
with any of the requirements of Federal environmental laws,
including but not limited to the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 [42 U.S.C. 9601 et
seq.] and the Solid Waste Disposal Act [42 U.S.C. 6901 et seq.].''
Short Title of 1986 Amendment
Section 1 of Pub. L. 99-563 provided that: ``This Act [enacting
sections 3905 and 3906 of this title, amending this section, sections
3902 and 3903 of this title, and sections 9671 to 9675 of Title 42, The
Public Health and Welfare, enacting provisions set out as notes under
this section and section 9671 of Title 42, and amending provisions set
out as a note under this section] may be cited as the `Risk Retention
Amendments of 1986'.''
Short Title
Section 1 of Pub. L. 97-45, as amended by Pub. L. 99-563,
Sec. 12(a), Oct. 27, 1986, 100 Stat. 3177, provided that: ``This Act
[enacting this chapter] may be cited as the `Liability Risk Retention
Act of 1986'.''
Oversight of Implementation; Report to Congress
Section 10 of Pub. L. 99-563 provided that:
``(a) In General.--(1) Not later than September 1, 1987, and not
later than September 1, 1989, the Secretary of Commerce shall submit
reports to the Congress concerning implementation of this Act [see Short
Title of 1986 Amendment note above].
``(2) Such report shall be based on--
``(A) the Secretary's consultation with State insurance
commissioners, risk retention groups, purchasing groups, and other
interested parties; and
``(B) the Secretary's analysis of other information available to
the Secretary.
``(b) Contents of the Report.--The report shall describe the
Secretary's views concerning--
``(1) the contribution of this Act [see Short Title of 1986
Amendment note above] toward resolution of problems relating to the
unavailability and unaffordability of liability insurance;
``(2) the extent to which the structure of regulation and
preemption established by this Act is satisfactory;
``(3) the extent to which, in the implementation of this Act,
the public is protected from unsound financial practices and other
commercial abuses involving risk retention groups and purchasing
groups;
``(4) the causes of any financial difficulties of risk retention
groups and purchasing groups;
``(5) the extent to which risk retention groups and purchasing
groups have been discriminated against under State laws, practices,
and procedures contrary to the provisions and underlying policy of
this Act and the Product Liability Risk Retention Act (as amended by
this Act) [Pub. L. 97-45, which enacted this chapter]; and
``(6) such other comments and conclusions as the Secretary deems
relevant to assessment of the implementation of this Act.''
