§ 3903. — Purchasing groups.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 15USC3903]
TITLE 15--COMMERCE AND TRADE
CHAPTER 65--LIABILITY RISK RETENTION
Sec. 3903. Purchasing groups
(a) Exemptions from State laws, rules, regulations, or orders
Except as provided in this section and section 3905 of this title, a
purchasing group is exempt from any State law, rule, regulation, or
order to the extent that such law, rule, regulation, or order would--
(1) prohibit the establishment of a purchasing group;
(2) make it unlawful for an insurer to provide or offer to
provide insurance on a basis providing, to a purchasing group or its
members, advantages, based on their loss and expense experience, not
afforded to other persons with respect to rates, policy forms,
coverages, or other matters;
(3) prohibit a purchasing group or its members from purchasing
insurance on the group basis described in paragraph (2) of this
subsection;
(4) prohibit a purchasing group from obtaining insurance on a
group basis because the group has not been in existence for a
minimum period of time or because any member has not belonged to the
group for a minimum period of time;
(5) require that a purchasing group must have a minimum number
of members, common ownership or affiliation, or a certain legal
form;
(6) require that a certain percentage of a purchasing group must
obtain insurance on a group basis;
(7) require that any insurance policy issued to a purchasing
group or any members of the group be countersigned by an insurance
agent or broker residing in that State; or
(8) otherwise discriminate against a purchasing group or any of
its members.
(b) Scope of exemptions
The exemptions specified in subsection (a) of this section apply
to--
(1) liability insurance provided to--
(A) a purchasing group; or
(B) any person who is a member of a purchasing group; and
(2) the provision of--
(A) liability coverage;
(B) insurance related services; or
(C) management services;
to a purchasing group or member of the group.
(c) Licensing of agents or brokers for purchasing groups
A State may require that a person acting, or offering to act, as an
agent or broker for a purchasing group obtain a license from that State,
except that a State may not impose any qualification or requirement
which discriminates against a nonresident agent or broker.
(d) Notice to State insurance commissioners of intent to do business
(1) A purchasing group which intends to do business in any State
shall furnish notice of such intention to the insurance commissioner of
such State. Such notice--
(A) shall identify the State in which such group is domiciled;
(B) shall specify the lines and classifications of liability
insurance which the purchasing group intends to purchase;
(C) shall identify the insurance company from which the group
intends to purchase insurance and the domicile of such company; and
(D) shall identify the principal place of business of the group.
(2) Such purchasing group shall notify the commissioner of any such
State as to any subsequent changes in any of the items provided in such
notice.
(e) Designation of agent for service of documents and process
A purchasing group shall register with and designate the State
insurance commissioner of each State in which it does business as its
agent solely for the purpose of receiving service of legal documents or
process, except that such requirement shall not apply in the case of a
purchasing group--
(1) which--
(A) was domiciled before April 1, 1986; and
(B) is domiciled on and after October 27, 1986; \1\
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\1\ See Codification note below.
in any State of the United States;
(2) which--
(A) before September 25, 1981, purchased insurance from an
insurance carrier licensed in any State; and
(B) since September 25, 1981, purchases its insurance from
an insurance carrier licensed in any State;
(3) which was a purchasing group under the requirements of this
chapter before October 27, 1986; and
(4) as long as such group does not purchase insurance that was
not authorized for purposes of an exemption under this chapter as in
effect before October 27, 1986.
(f) Purchases of insurance through licensed agents or brokers acting
pursuant to surplus lines laws
A purchasing group may not purchase insurance from a risk retention
group that is not chartered in a State or from an insurer not admitted
in the State in which the purchasing group is located, unless the
purchase is effected through a licensed agent or broker acting pursuant
to the surplus lines laws and regulations of such State.
(g) State powers to enforce State laws
Nothing in this chapter shall be construed to affect the authority
of any State to make use of any of its powers to enforce the laws of
such State with respect to which a purchasing group is not exempt under
this chapter.
(h) States' authority to sue
Nothing in this chapter shall affect the authority of any State to
bring an action in any Federal or State court.
(Pub. L. 97-45, Sec. 4, Sept. 25, 1981, 95 Stat. 951; Pub. L. 99-563,
Secs. 6, 8(b), 12(d), Oct. 27, 1986, 100 Stat. 3174, 3175, 3178.)
Codification
October 27, 1986, referred to in subsec. (e)(1)(B), was in the
original ``the date of the enactment of this Act'' which was translated
as meaning the date of the enactment of Pub. L. 99-563, which enacted
subsec. (e), to reflect the probable intent of Congress.
Amendments
1986--Subsec. (a). Pub. L. 99-563, Sec. 8(b)(1), inserted reference
to section 3905 of this title.
Subsec. (b)(1). Pub. L. 99-563, Sec. 12(d)(1), substituted
``liability insurance'' for ``product liability or completed operations
liability insurance, and comprehensive general liability insurance which
includes either of these coverages,''.
Subsec. (b)(2)(A). Pub. L. 99-563, Sec. 12(d)(2), struck out
``product liability or completed operations insurance, and comprehensive
general'' before ``liability coverage''.
Subsecs. (d) to (h). Pub. L. 99-563, Secs. 6, 8(b)(2), added
subsecs. (d) to (h).
