Public Act 099-0512
 
SB2589 EnrolledLRB099 18821 MLM 43206 b

    AN ACT concerning regulation.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Illinois Insurance Code is amended by
changing Sections 123B-2, 123B-3, 123B-4, and 123B-7 as
follows:
 
    (215 ILCS 5/123B-2)  (from Ch. 73, par. 735B-2)
    (Section scheduled to be repealed on January 1, 2017)
    Sec. 123B-2. Definitions. As used in this Article:
    (1) "Director" means the Director of the Department of
Insurance.
    (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; or
        (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; and
        (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:
        (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.
    (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 Illinois.
    (6) "Liability" means:
        (a) 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 for profit or not for
        profit), 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; but
        (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.).
    (7) "Personal risk liability" means liability for damage
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 (a) of
subsection (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) information sufficient to verify that its 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;
        (b) for each state in which it intends to operate, the
    coverages, deductibles, coverage limits, rates, and rating
    classification systems for each line of insurance the group
    intends to offer;
        (c) historical and expected loss experience of the
    proposed members and national experience of similar
    exposures to the extent this experience is reasonably
    available;
        (d) pro forma financial statements and projections;
        (e) 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;
        (f) identification of management, underwriting and
    claims procedures, marketing methods, managerial oversight
    methods, investment policies and reinsurance agreements;
    and
        (f-5) identification of each state in which the risk
    retention group has obtained, or sought to obtain, a
    charter and license and a description of its status in each
    such state; and
        (g) such other matters as may be prescribed by the
    commissioner of the state in which the group is chartered
    for liability insurance companies authorized by the
    insurance laws of such state.
    (9) "Product liability" means liability for damages
because of any personal injury, death, emotional harm,
consequential economic damage, or property damage (including
damages resulting from the loss of use of property) arising out
of the manufacture, design, importation, distribution,
packaging, labeling, lease, or sale of a product, but does not
include the liability of any person for those damages if the
product involved was in the possession of such a person when
the 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 such insurance only for its group members
    and only to cover their similar or related liability
    exposure, as described in paragraph (c) of this subsection
    (10);
        (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.
    (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 the liability exposure of
    its group members;
        (b) which is organized for the primary purpose of
    conducting the activity described under paragraph (a) of
    this subsection (11);
        (c) which:
            (i) is organized and licensed as a liability
        insurance company and authorized to engage in the
        business of insurance under the laws of any state; or
            (ii) before January 1, 1985 was organized 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 purposes of continuing to provide
        insurance to cover product liability or completed
        operations liability (as such terms were defined in the
        Product Liability Risk Retention Act of 1981 before the
        date of the enactment of the Risk Retention Act 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 (directly or indirectly) 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 (directly or indirectly)
        an organization which:
                (I) has as its members only persons who
            comprise the membership of the risk retention
            group; and
                (II) 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 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; and
            (ii) reinsurance with respect to the liability of
        any other risk retention group (or any members of such
        other group) which is engaged in businesses or
        activities so that such group or member meets the
        requirement described in paragraph (f) of this
        subsection (11) for membership in the risk retention
        group which provides such reinsurance; and
        (h) the name of which includes the phrase "Risk
    Retention Group".
    (12) "State" means any state of the United States or the
District of Columbia.
    (13) "NAIC" means the National Association of Insurance
Commissioners.
(Source: P.A. 85-131.)
 
    (215 ILCS 5/123B-3)  (from Ch. 73, par. 735B-3)
    (Section scheduled to be repealed on January 1, 2017)
    Sec. 123B-3. Risk retention groups organized in this State.
    A. A risk retention group shall either:
        (1) pursuant to the provisions of Articles II or III,
    be organized to write only liability insurance and, except
    as provided elsewhere in this Article, must comply with all
    of the laws, rules, regulations and requirements
    applicable to such insurers organized in this State and
    with Section 123B-4 of this Article to the extent such
    requirements are not a limitation on laws, rules,
    regulations or requirements of this State; or
        (2) pursuant to the provisions of Article VIIC, be
    organized to write only liability insurance as a captive
    insurance company and, except as provided elsewhere in this
    Article, must comply with all of the laws, rules,
    regulations and requirements applicable to such insurers
    organized in this State and with Section 123B-4 of this
    Article to the extent such requirements are not a
    limitation on laws, rules, regulations or requirements of
    this State.
    Except that, as of the effective date of this amendatory
Act of 1995, a new risk retention group must qualify under
paragraph (1) of this subsection, and any risk retention group
presently organized in accordance with paragraph (2) of this
subsection shall amend its articles of incorporation and comply
with paragraph (1) of this subsection within 6 months of the
effective date of this amendatory Act of 1995 or cease
operating under this Article.
    B. Before it may offer insurance in any state, each risk
retention group shall also submit for approval to the Director
a plan of operation or a feasibility study and revisions of
such plan or study if the group intends to offer any additional
lines of liability insurance. In the event of any subsequent
material change in any item of its plan or study, such risk
retention group shall submit an appropriate revision to the
Director within 10 days of any such change for approval by the
Director. The group shall not offer any additional kinds of
liability insurance, in this State or in any other state, until
a revision of such plan or study is approved by the Director.
    C. At the time of filing its application for organization,
the risk retention group shall provide to the Director in
summary form the following information: the identity of the
initial members of the group, the identity of those individuals
who organized the group or who will provide administrative
services or otherwise influence or control the activities of
the group, the amount and nature of initial capitalization, the
coverages to be afforded, and the states in which the group
intends to operate. Upon receipt of this information, the
Director shall forward the information to the NAIC. Providing
notification to the NAIC is in addition to and shall not be
sufficient to satisfy the requirements of Section 123B-4 of
this Code or any other provisions of this Article.
    D. The name under which a risk retention group may be
organized and licensed shall include the phrase "Risk Retention
Group".
    E. Notwithstanding any other provision to the contrary, all
risk retention groups chartered in this State shall file an
annual statement with the Department and NAIC the National
Association of Insurance Commissioners (NAIC). The annual
statement shall be in a form prescribed by the Director. The
statement may be required to be in diskette form. The statement
shall be completed in accordance with the annual statement
instructions and the NAIC Accounting Practices and Procedures
Manual.
    F. As used in this subsection F:
    "Board of directors" means the governing body of the risk
retention group elected by shareholders or members to establish
policy, elect or appoint officers and committees, and make
other governing decisions.
    "Director" means a natural person designated in the
articles of the risk retention group, or designated, elected,
or appointed by any other manner, name, or title, to act as a
director.
    "Material relationship" means a relationship of a person
with the risk retention group that includes, but is not limited
to:
        (a) The receipt in any one 12-month period of
    compensation or payment of any other item of value by the
    person, a member of the person's immediate family, or any
    business with which the person is affiliated from the risk
    retention group or a consultant or services provider to the
    risk retention group is greater than or equal to 5% of the
    risk retention group's gross written premium for the
    12-month period or 2% of its surplus, whichever is greater,
    as measured at the end of any fiscal quarter falling in a
    12-month period. The person or immediate family member of
    that person is not independent until one year after his or
    her compensation from the risk retention group falls below
    the threshold.
        (b) A relationship with the auditor as follows: a
    director or an immediate family member of a director who is
    affiliated with or employed in a professional capacity by a
    present or former internal or external auditor of the risk
    retention group is not independent until one year after the
    end of the affiliation, employment, or auditing
    relationship.
        (c) A relationship with a related entity as follows: a
    director or an immediate family member of a director who is
    employed as an executive officer of another company where
    any of the risk retention group's present executives serve
    on that other company's board of directors is not
    independent until one year after the end of the service or
    the employment relationship.
    Within one year after the effective date of this amendatory
Act of the 99th General Assembly, existing risk retention
groups shall be in compliance with the following governance
standards and new risk retention groups shall be in compliance
with the standards at the time of licensure:
        (1) The board of directors of the risk retention group
    shall have a majority of independent directors. If the risk
    retention group is a reciprocal, then the attorney-in-fact
    shall adhere to the same standards regarding independence
    of operations and governance as imposed on the risk
    retention group's board of directors or subscribers
    advisory committee under these standards and, to the extent
    permissible under State law, service providers of a
    reciprocal risk retention group shall contract with the
    risk retention group and not the attorney-in-fact.
        No director qualifies as independent unless the board
    of directors affirmatively determines that the director
    has no material relationship with the risk retention group.
    Each risk retention group shall disclose these
    determinations to the Department at least annually and the
    Director may approve or refute the board's determination.
    For this purpose, any person that is a direct or indirect
    owner of or subscriber in the risk retention group (or is
    an officer, director, or employee of an owner and insured,
    unless some other position of the officer, director, or
    employee constitutes a material relationship), as
    contemplated by 15 U.S.C. 3901(a)(4)(E)(ii), shall be
    deemed independent.
        A material relationship shall not be deemed to exist by
    reason that a majority of the membership of the related
    entity's board of directors is the same as the membership
    of the board of directors of the risk retention group
    unless the director decides otherwise.
        (2) The term of any material service provider contract
    with the risk retention group shall not exceed 5 years. Any
    contract, or its renewal, shall require the approval of the
    majority of the risk retention group's independent
    directors. The risk retention group's board of directors
    shall have the right to terminate any service provider,
    audit, or actuarial contracts at any time for cause after
    providing adequate notice as defined in the contract. The
    service provider contract is deemed material if the amount
    to be paid for the contract is greater than or equal to 5%
    of the risk retention group's annual gross written premium
    or 2% of its surplus, whichever is greater.
        No service provider in a material relationship with the
    risk retention group shall enter into a contract with the
    risk retention group unless the risk retention group has
    notified the Director of Insurance in writing of its
    intention to enter into a transaction at least 30 days
    prior thereto and the Director of Insurance has not
    disapproved it within that period.
        For the purposes of this paragraph (2), "service
    providers" includes captive managers, auditors,
    accountants, actuaries, investment advisors, lawyers,
    managing general underwriters, and other parties
    responsible for underwriting, determination of rates,
    collection of premium, adjusting and settling claims or
    preparation of financial statements.
        "Lawyers" does not include defense counsel retained by
    the risk retention group to defend claims, unless the
    amount of fees paid to the lawyers meet the definition of a
    material relationship.
        (3) The risk retention group's board of directors shall
    adopt a written policy in the plan of operation as approved
    by the board that requires the board to:
            (a) ensure that all owner-insureds of the risk
        retention group receive evidence of ownership
        interest;
            (b) develop a set of governance standards
        applicable to the risk retention group;
            (c) oversee the evaluation of the risk retention
        group's management, including, but not limited to, the
        performance of the captive manager, managing general
        underwriter, or other party or parties responsible for
        underwriting, determination of rates, collection of
        premium, adjusting or settling claims or the
        preparation of financial statements;
            (d) review and approve the amount to be paid for
        all material service providers; and
            (e) review and approve at least annually:
                (i) the risk retention group's goals and
            objectives relevant to the compensation of
            officers and service providers;
                (ii) the officers' and service providers'
            performance in light of those goals and
            objectives; and
                (iii) the continued engagement of the officers
            and material service providers.
        (4) The risk retention group shall have an audit
    committee composed of at least 3 independent board members
    as defined in this subsection F. A non-independent board
    member may participate in the activities of the audit
    committee, if invited by the members, but cannot be a
    member of the committee.
        The audit committee shall have a written charter that
    defines the committee's purpose, which at a minimum must be
    to:
            (a) assist board oversight of: (I) the integrity of
        the financial statements, (II) the compliance with
        legal and regulatory requirements, and (III) the
        qualifications, independence, and performance of the
        independent auditor and actuary;
            (b) discuss the annual audited financial
        statements and quarterly financial statements with
        management;
            (c) discuss the annual audited financial
        statements with its independent auditor and, if
        advisable, discuss its quarterly financial statements
        with its independent auditor;
            (d) discuss policies with respect to risk
        assessment and risk management;
            (e) meet separately and periodically, either
        directly or through a designated representative of the
        committee, with management and independent auditors;
            (f) review with the independent auditor any audit
        problems or difficulties and management's response;
            (g) set clear hiring policies of the risk retention
        group as to the hiring of employees or former employees
        of the independent auditor;
            (h) require the external auditor to rotate the lead
        or coordinating audit partner having primary
        responsibility for the risk retention group's audit as
        well as the audit partner responsible for reviewing
        that audit so that neither individual performs audit
        services for more than 5 consecutive fiscal years; and
            (i) report regularly to the board of directors.
        The Department may waive the requirement to establish
    an audit committee composed of independent board members if
    the risk retention group is able to demonstrate to the
    Department that it is impracticable to do so and the risk
    retention group's board of directors itself is otherwise
    able to accomplish the purposes of an audit committee as
    described in this paragraph (4).
        (5) The board of directors shall adopt and disclose
    governance standards, either through electronic or other
    means, and provide information to members and insureds upon
    request, including, but not limited to:
            (a) a process by which the directors are elected by
        the owner or insureds;
            (b) director qualification standards;
            (c) director responsibilities;
            (d) director access to management and, as
        necessary and appropriate, independent advisors;
            (e) director compensation;
            (f) director orientation and continuing education;
            (g) the policies and procedures that are followed
        for management succession; and
            (h) the policies and procedures that are followed
        for annual performance evaluation of the board.
        (6) The board of directors shall adopt and disclose a
    code of business conduct and ethics for directors,
    officers, and employees and promptly disclose to the board
    of directors any waivers of the code for directors or
    executive officers. The code of business conduct and ethics
    shall include, but is not limited to, the following topics:
            (a) conflicts of interest;
            (b) matters covered under the corporate
        opportunities doctrine under the state of domicile;
            (c) confidentiality;
            (d) fair dealing;
            (e) protection and proper use of risk retention
        group assets;
            (f) compliance with all applicable laws, rules,
        and regulations; and
            (g) the required reporting of any illegal or
        unethical behavior that affects the operation of the
        risk retention group.
        (7) The captive manager, president, or chief executive
    officer of the risk retention group shall promptly notify
    the Department in writing if he or she becomes aware of any
    material non-compliance with any of these governance
    standards.
(Source: P.A. 89-97, eff. 7-7-95.)
 
    (215 ILCS 5/123B-4)  (from Ch. 73, par. 735B-4)
    (Section scheduled to be repealed on January 1, 2017)
    Sec. 123B-4. Risk retention groups not organized in this
State. Any risk retention group organized and licensed in a
state other than this State and seeking to do business as a
risk retention group in this State shall comply with the laws
of this State as follows:
    A. Notice of operations and designation of the Director as
agent.
    Before offering insurance in this State, a risk retention
group shall submit to the Director on a form prescribed by the
NAIC approved by the Director:
        (1) a statement identifying the state or states in
    which the risk retention group is organized and licensed as
    a liability insurance company, its date of organization,
    its principal place of business, and such other
    information, including information on its membership, as
    the Director may require to verify that the risk retention
    group is qualified under subsection (11) of Section 123B-2
    of this Article;
        (2) a copy of its plan of operations 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 shall not apply with respect to any line
    or classification of liability insurance which (a) was
    defined in the Product Liability Risk Retention Act of 1981
    before October 27, 1986, and (b) was offered before such
    date by any risk retention group which had been organized
    and operating for not less than 3 years before such date;
    and
        (3) a statement of registration which designates the
    Director as its agent for the purpose of receiving service
    of legal documents or process, together with a filing fee
    of $200 payable to the Director.
    A risk retention group shall submit a copy of any material
revision to its plan of operation or feasibility study required
by subsection B of Section 123B-3 of this Code within 30 days
after the date of the approval of the revision by the Director
or, if no such approval is required, within 30 days after
filing.
    B. Financial condition. Any risk retention group doing
business in this State shall submit to the Director:
        (1) a copy of the group's financial statement submitted
    to the state in which the risk retention group is organized
    and licensed, which shall 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 (under criteria established by the NAIC
    National Association of Insurance Commissioners);
        (2) a copy of each examination of the risk retention
    group as certified by the public official conducting the
    examination;
        (3) upon request by the Director, a copy of any
    information or document pertaining to any outside audit
    performed with respect to the risk retention group; and
        (4) such information as may be required to verify its
    continuing qualification as a risk retention group under
    subsection (11) of Section 123B-2.
    C. Taxation.
        (1) Each risk retention group shall be liable for the
    payment of premium taxes and taxes on premiums of direct
    business for risks resident or located within this State,
    and shall report to the Director the net premiums written
    for risks resident or located within this State. Such risk
    retention group shall be subject to taxation, and any
    applicable fines and penalties related thereto, on the same
    basis as a foreign admitted insurer.
        (2) To the extent licensed insurance producers are
    utilized pursuant to Section 123B-11, they shall report to
    the Director the premiums for direct business for risks
    resident or located within this State which such licensees
    have placed with or on behalf of a risk retention group not
    organized in this State.
        (3) To the extent that licensed insurance producers are
    utilized pursuant to Section 123B-11, each such producer
    shall keep a complete and separate record of all policies
    procured from each such risk retention group, which record
    shall be open to examination by the Director, as provided
    in Section 506.1 of this Code. These records shall, for
    each policy and each kind of insurance provided thereunder,
    include the following:
            (a) the limit of the liability;
            (b) the time period covered;
            (c) the effective date;
            (d) the name of the risk retention group which
        issued the policy;
            (e) the gross premium charged; and
            (f) the amount of return premiums, if any.
    D. Compliance With unfair claims practices provisions. Any
risk retention group, its agents and representatives shall be
subject to the unfair claims practices provisions of Sections
154.5 through 154.8 of this Code.
    E. Deceptive, false, or fraudulent practices. Any risk
retention group shall comply with the laws of this State
regarding deceptive, false, or fraudulent acts or practices.
However, if the Director seeks an injunction regarding such
conduct, the injunction must be obtained from a court of
competent jurisdiction.
    F. Examination regarding financial condition. Any risk
retention group must submit to an examination by the Director
to determine its financial condition if the commissioner of
insurance of the jurisdiction in which the group is organized
and licensed has not initiated an examination or does not
initiate an examination within 60 days after a request by the
Director. Any such examination shall be coordinated to avoid
unjustified repetition and conducted in an expeditious manner
and in accordance with the NAIC's National Association of
Insurance Commissioners' Examiner Handbook.
    G. Notice to purchasers. Every application form for
insurance from a risk retention group and the front page and
declaration page of every policy issued by a risk retention
group shall contain in 10 point type the following notice:
"NOTICE
    This policy is issued by your risk retention group. Your
risk retention group is not subject to all of the insurance
laws and regulations of your state. State insurance insolvency
guaranty fund protection is not available for your risk
retention group".
    H. Prohibited acts regarding solicitation or sale. The
following acts by a risk retention group are hereby prohibited:
        (1) the solicitation or sale of insurance by a risk
    retention group to any person who is not eligible for
    membership in such group; and
        (2) 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.
    I. Prohibition on ownership by an insurance company. No
risk retention group shall 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.
    J. Prohibited coverage. No risk retention group may offer
insurance policy coverage prohibited by Articles IX or XI of
this Code or declared unlawful by the Illinois Supreme Court;
provided however, a risk retention group organized and licensed
in a state other than this State that selects the law of this
State to govern the validity, construction, or enforceability
of policies issued by it is permitted to provide coverage under
policies issued by it for penalties in the nature of
compensatory damages including, without limitation, punitive
damages and the multiplied portion of multiple damages, so long
as coverage of those penalties is not prohibited by the law of
the state under which the risk retention group is organized.
    K. Delinquency proceedings. A risk retention group not
organized in this State and doing business in this State shall
comply with a lawful order issued in a voluntary dissolution
proceeding or in a conservation, rehabilitation, liquidation,
or other delinquency proceeding commenced by the Director or by
another state insurance commissioner if there has been a
finding of financial impairment after an examination under
subsection F of Section 123B-4 of this Article.
    L. Compliance with injunctive relief. A risk retention
group shall comply with an injunctive order issued in another
state by a court of competent jurisdiction or by a United
States District Court based on a finding of financial
impairment or hazardous financial condition.
    M. Penalties. A risk retention group that violates any
provision of this Article will be subject to fines and
penalties applicable to licensed insurers generally, including
revocation of its license or the right to do business in this
State, or both.
    N. (Blank). Operations prior to August 3, 1987. In addition
to complying with the requirements of this Section, any risk
retention group operating in this State prior to August 3,
1987, shall within 30 days after such effective date comply
with the provisions of subsection A of this Section.
(Source: P.A. 93-32, eff. 7-1-03.)
 
    (215 ILCS 5/123B-7)  (from Ch. 73, par. 735B-7)
    (Section scheduled to be repealed on January 1, 2017)
    Sec. 123B-7. Purchasing Groups - Exemption from Certain
Laws Relating to the Group Purchase of Insurance. Any
purchasing group meeting the criteria established under the
provisions of the federal Liability Risk Retention Act of 1986
shall be exempt from any law of this State prohibiting relating
to the creation of risk purchasing of groups for the purchase
of insurance; , any countersignature requirements as provided
in this Code; , and any prohibition of group purchasing or any
law that would discriminate against a purchasing group or its
members, prohibit a purchasing group from obtaining insurance
on a group basis or 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, require
that a purchasing group must have a minimum number of members,
common ownership or affiliation, or certain legal form, or
require that a certain percentage of a purchasing group must
obtain insurance on a group basis. In addition, an insurer
shall be exempt from any law of this State which prohibits
providing, or offering to provide, 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. A purchasing group shall be
subject to all other applicable laws of this State.
(Source: P.A. 85-131.)