15 U.S.C. § 3901 — Definitions

(a) In this chapter: (1) “Insurance” includes primary, excess, reinsurance, surplus-lines insurance, and any other risk-shifting and risk-distributing arrangement treated as insurance under applicable State or Federal law. (2) “Liability” means legal liability for damages, including defense costs, legal fees, and other claim expenses, for injury to other people, damage to their property, or other loss resulting from a business, trade, product, service, premises, operation, or State or local government activity. It excludes personal risk liability and employer liability to employees, except liability under the Federal Employers’ Liability Act. (3) “Personal risk liability” means liability for injury, property damage, or other loss from personal, family, or household responsibilities or activities rather than the business or government activities covered by paragraph (2). (4) “Risk retention group” means a corporation or other limited-liability association whose primary activity is assuming and spreading all or part of its members’ liability exposure and whose primary purpose is that activity; is a State-chartered or licensed liability insurer, or is a qualifying Bermuda or Cayman Islands insurer existing before January 1, 1985; does not exclude people solely to give members a competitive advantage; has only insured members as owners, or is solely owned by an organization whose members and owners meet those conditions; has members with similar or related businesses or activities as to their liability; provides only the specified member liability insurance and qualifying reinsurance; and has “Risk Retention Group” in its name. The older foreign group may qualify only if it has operated continuously and only continues product-liability or completed-operations insurance. (5) “Purchasing group” means a group that seeks group liability insurance, buys it only for members and their similar or related exposure, consists of members with similar or related businesses or activities as to that exposure, and is domiciled in a State. (6) “State” means a United States State or the District of Columbia. (7) “Hazardous financial condition” means a risk retention group is unlikely, based on present or reasonably expected finances, to meet policyholder obligations for known or reasonably expected claims or to pay other ordinary business obligations. (b) Nothing in this chapter changes a State’s tort law or law interpreting insurance contracts. State definitions of liability, personal risk liability, and insurance do not apply for this chapter’s purposes, including recognition or qualification of risk retention or purchasing groups.