Sec. 11. (a) As used in this chapter, "risk retention group" means any corporation or other limited liability association:

(1) whose primary activity consists of assuming and spreading all or any portion of the liability exposure of its group members;

(2) that is organized for the primary purpose of conducting the activity described in subdivision (1);

(3) that:

(A) is chartered and licensed as a liability insurance company and authorized to engage in the business of insurance under the laws of any state; or

(B) 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 January 1, 1985, had certified to the insurance commissioner of at least one (1) state that it satisfied the capitalization requirements of that state;

(4) that does not exclude any person from membership in the group solely to provide the members of the group a competitive advantage over that person;

(5) that:

(A) has as its owners only persons who comprise the membership of the risk retention group and who are provided insurance by that group; or

(B) has as its sole owner an organization which:

(i) has as its members only persons who comprise the membership of the risk retention group; and

(ii) is owned entirely by persons who comprise the membership of the risk retention group and who are provided insurance by that group;

(6) whose members are engaged in businesses or activities similar or related with respect to the liability to which the members are exposed by virtue of any related, similar, or common business, trade, product, services, premises, or operations;

(7) whose activities do not include the provision of insurance other than:

(A) liability insurance for assuming and spreading all or any portion of the liability of its group members; and

(B) reinsurance with respect to the liability of:

(i) any other risk retention group; or

(ii) any member of any other risk retention group;

that is engaged in business or activities that would make the group or group member eligible for membership, under subdivision (6), in the risk retention group that provides the reinsurance;

(8) whose name includes the phrase "Risk Retention Group".

(b) The term "risk retention group" includes a corporation or limited liability association described in subsection (a)(3)(B):

(1) only if that corporation or association has been engaged in business continuously since January 1, 1985; and

(2) only for the purpose of continuing to provide insurance to cover product liability or completed operations liability.

As used in this subsection, the terms "product liability" and "completed operations liability" have the meanings set forth in 15 U.S.C. 3901 before October 27, 1986.

As added by P.L.162-1988, SEC.2.