2020 New York Laws
ISC - Insurance
Article 59 - Risk Retention Groups and Purchasing Groups
5905 - Risk Retention Groups; Notice, Prohibited Solicitation, Coverage and Ownership.
§ 5905. Risk retention groups; notice, prohibited solicitation,
coverage and ownership. (a) Notice to purchasers. (1) Every insurance
policy issued by a risk retention group shall contain in ten point type
on the front page and on the declaration page, the following notice:
NOTICE
This policy is issued by your risk retention group.
Your risk retention group may not be subject to all
of the insurance laws and regulations of your state.
State insurance insolvency guaranty funds are not
available for your risk retention group. (2) Every application for insurance from a risk retention group shall
prominently contain a similar notice.
(b) Prohibited acts regarding solicitation or sale. The following acts
by a risk retention group are prohibited:
(1) The solicitation or sale of insurance 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.
(c) Prohibited coverage. The terms of any insurance policy issued or
issued for delivery in this state by any such risk retention group shall
not provide, or be construed to provide, coverage prohibited generally
by statute of this state or declared unlawful by the highest court of
this state whose law applies to such policy.
(d) Prohibition on ownership by an insurer. No risk retention group
shall do business in this state if an insurer 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 insurers.
