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§ 25-106. Purchasing groups

West's Annotated Code of MarylandInsurance

West's Annotated Code of Maryland
Insurance (Refs & Annos)
Title 25. Alternative Market Mechanisms
Subtitle 1. Maryland Risk Retention Act (Refs & Annos)
MD Code, Insurance, § 25-106
§ 25-106. Purchasing groups
Currentness
Application of State laws to purchasing groups
(a)(1) Except as otherwise provided in paragraphs (2) and (3) of this subsection, a purchasing group is subject to all applicable laws of the State.
(2) A purchasing group that meets the criteria established under the federal Liability Risk Retention Amendments of 1986 is exempt from any law of the State that relates to the creation of groups for the purchase of insurance, prohibition of group purchasing, or any law that would discriminate against a purchasing group or its members.
(3) An insurer is exempt from any law of the State that prohibits providing or offering to provide to a purchasing group or its members advantages based on their loss and expense experience that are not afforded to other persons with respect to rates, policy forms, coverages, or other matters.
Notice furnished to Commissioner before doing business in State
(b)(1) Before doing business in the State, a purchasing group shall furnish notice to the Commissioner.
(2) The notice shall include:
(i) the state in which the purchasing group has its domicile;
(ii) the lines and classifications of liability insurance that the purchasing group intends to purchase;
(iii) the identity of all states in which the purchasing group intends to do business;
(iv) the insurance company from which the purchasing group intends to purchase liability insurance and the domicile of that company;
(v) the method by which and any person through whom liability insurance will be offered to purchasing group members whose risks are resident or located in the State;
(vi) the principal place of business of the purchasing group; and
(vii) any other information that the Commissioner requires to verify that the purchasing group qualifies as a purchasing group, as defined in § 25-101 of this subtitle.
(3) Within 10 days of a change in an item set forth in paragraph (2) of this subsection, the purchasing group shall notify the Commissioner of the change in writing.
Statement of registration provided to Commissioner
(c)(1) A purchasing group shall provide to the Commissioner a statement of registration that designates the Commissioner as its agent for service of legal process.
(2) The Commissioner shall determine the filing fee for the statement of registration required by paragraph (1) of this subsection.
(3) The requirements of paragraph (1) of this subsection do not apply to a purchasing group that:
(i) 1. had its domicile on or before March 31, 1986 in a state; and
2. has its domicile on or after October 27, 1986 in a state;
(ii) 1. on or before October 26, 1986, purchased insurance from an insurer licensed in a state; and
2. on or after October 27, 1986, purchased insurance from an insurer licensed in a state;
(iii) was a purchasing group under the requirements of the Product Liability Risk Retention Act of 19811 on or before October 26, 1986; and
(iv) only purchases insurance that was authorized under the Product Liability Risk Retention Act of 1981, as in effect on or before October 26, 1986.
Restrictions relating to insurance purchases
(d)(1) Unless the purchase is effected through a licensed insurance producer acting under the surplus lines insurance laws and regulations of a state, a purchasing group may not purchase insurance from a risk retention group that is not chartered in that state or from an insurer not authorized in the state in which the purchasing group is located.
(2) A purchasing group that obtains liability insurance from an unauthorized insurer or from a risk retention group shall inform each member of the purchasing group that has a risk resident or located in this State that:
(i) the risk is not protected by the Property and Casualty Insurance Guaranty Corporation; and
(ii) the risk retention group or unauthorized insurer may not be subject to all insurance laws and regulations of the State.
(3)(i) A purchasing group may not purchase insurance coverage that provides for a deductible or self-insured retention applicable to the purchasing group as a whole.
(ii) Notwithstanding subparagraph (i) of this paragraph, a purchasing group may purchase insurance coverage that provides for a deductible or self-insured retention applicable to individual members.
Taxes on premiums paid in State
(e)(1) Taxes on premiums paid for coverage of risks resident or located in the State by a purchasing group or member of the purchasing group shall be imposed in accordance with Title 6 of this article.
(2) If the taxes imposed by Title 6 of this article are not paid by the insurer, then the taxes shall be paid by the purchasing group.
(3) If the purchasing group fails to pay the specified taxes, the taxes shall be paid by each of the purchasing group's members whose risks are resident or located in the State.

Credits

Added by Acts 1996, c. 11, § 1, eff. Oct. 1, 1997. Amended by Acts 2001, c. 731, § 1, eff. July 2, 2001.
Formerly Art. 48A, §§ 622 to 625, 625A.

Footnotes

1
Pub.L. 97-45, Sept. 25, 1981, 95 Stat. 949, codified at 15 U.S.C.A. § 3901 et seq.
MD Code, Insurance, § 25-106, MD INSURANCE § 25-106
Current with legislation effective through October 1, 2024, from the 2024 Regular Session of the General Assembly. Some statute sections may be more current, see credits for details.
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