U.S. Code » Title 15 » Chapter CHAPTER 65— LIABILITY RISK RETENTION

15 U.S.C. § 3903

Purchasing groups

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(a) Exemptions from State laws, rules, regulations, or ordersExcept as provided in this section and section 3905 of this title, a purchasing group is exempt from any State law, rule, regulation, or order to the extent that such law, rule, regulation, or order would—(1) prohibit the establishment of a purchasing group;(2) make it unlawful for an insurer to provide or offer to provide insurance on a basis providing, 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;(3) prohibit a purchasing group or its members from purchasing insurance on the group basis described in paragraph (2) of this subsection;(4) prohibit a purchasing group from obtaining insurance on a group basis 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;(5) require that a purchasing group must have a minimum number of members, common ownership or affiliation, or a certain legal form;(6) require that a certain percentage of a purchasing group must obtain insurance on a group basis;(7) require that any insurance policy issued to a purchasing group or any members of the group be countersigned by an insurance agent or broker residing in that State; or(8) otherwise discriminate against a purchasing group or any of its members.(b) Scope of exemptionsThe exemptions specified in subsection (a) apply to—(1) liability insurance provided to—(A) a purchasing group; or(B) any person who is a member of a purchasing group; and(2) the provision of—(A) liability coverage;(B) insurance related services; or(C) management services;to a purchasing group or member of the group.(c) Licensing of agents or brokers for purchasing groups

A State may require that a person acting, or offering to act, as an agent or broker for a purchasing group obtain a license from that State, except that a State may not impose any qualification or requirement which discriminates against a nonresident agent or broker.

(d) Notice to State insurance commissioners of intent to do business(1) A purchasing group which intends to do business in any State shall furnish notice of such intention to the insurance commissioner of such State. Such notice—(A) shall identify the State in which such group is domiciled;(B) shall specify the lines and classifications of liability insurance which the purchasing group intends to purchase;(C) shall identify the insurance company from which the group intends to purchase insurance and the domicile of such company; and(D) shall identify the principal place of business of the group.(2) Such purchasing group shall notify the commissioner of any such State as to any subsequent changes in any of the items provided in such notice.(e) Designation of agent for service of documents and processA purchasing group shall register with and designate the State insurance commissioner of each State in which it does business as its agent solely for the purpose of receiving service of legal documents or process, except that such requirement shall not apply in the case of a purchasing group—(1) which—(A) was domiciled before April 1, 1986; and(B) is domiciled on and after October 27, 1986; 11 See Codification note below.in any State of the United States;(2) which—(A) before September 25, 1981, purchased insurance from an insurance carrier licensed in any State; and(B) since September 25, 1981, purchases its insurance from an insurance carrier licensed in any State;(3) which was a purchasing group under the requirements of this chapter before October 27, 1986; and(4) as long as such group does not purchase insurance that was not authorized for purposes of an exemption under this chapter as in effect before October 27, 1986.(f) Purchases of insurance through licensed agents or brokers acting pursuant to surplus lines laws

A purchasing group may not purchase insurance from a risk retention group that is not chartered in a State or from an insurer not admitted in the State in which the purchasing group is located, unless the purchase is effected through a licensed agent or broker acting pursuant to the surplus lines laws and regulations of such State.

(g) State powers to enforce State laws

Nothing in this chapter shall be construed to affect the authority of any State to make use of any of its powers to enforce the laws of such State with respect to which a purchasing group is not exempt under this chapter.

(h) States’ authority to sue

Nothing in this chapter shall affect the authority of any State to bring an action in any Federal or State court.

(Pub. L. 97–45, § 4, Sept. 25, 1981, 95 Stat. 951; Pub. L. 99–563, §§ 6, 8(b), 12(d), Oct. 27, 1986, 100 Stat. 3174, 3175, 3178.)Editorial NotesCodification

October 27, 1986, referred to in subsec. (e)(1)(B), was in the original “the date of the enactment of this Act” which was translated as meaning the date of the enactment of Pub. L. 99–563, which enacted subsec. (e), to reflect the probable intent of Congress.

Amendments

1986—Subsec. (a). Pub. L. 99–563, § 8(b)(1), inserted reference to section 3905 of this title.

Subsec. (b)(1). Pub. L. 99–563, § 12(d)(1), substituted “liability insurance” for “product liability or completed operations liability insurance, and comprehensive general liability insurance which includes either of these coverages,”.

Subsec. (b)(2)(A). Pub. L. 99–563, § 12(d)(2), struck out “product liability or completed operations insurance, and comprehensive general” before “liability coverage”.

Subsecs. (d) to (h). Pub. L. 99–563, §§ 6, 8(b)(2), added subsecs. (d) to (h).

Notes of Decisions
Cited in 13 cases, 1988–2019 · leading case: State of Florida, Dep't of Ins. v. Nat'l Amusement Purchasing Grp., Inc., Risk Retention Serv. Corp., Bel-Air Ins. Co., 905 F.2d 361 (11th Cir. 1990).
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State of Florida, Dep't of Ins. v. Nat'l Amusement Purchasing Grp., Inc., Risk Retention Serv. Corp., Bel-Air Ins. Co., 905 F.2d 361 (11th Cir. 1990). · cites it 5× “” 15 U.S.C. § 3903 (g). As noted in the House Report on the 1986 amendments to the Act: In enacting the 1981 Act, it was recognized that there were a number of identifiable kinds of State laws that prevented the establishment and functioning of purchasing groups.”
Classic Motel, Inc. v. Coral Grp., Ltd., 833 F. Supp. 593 (S.D. Miss. 1993). · cites it 15× “Thus, all communications between the parties here were either to, from or through Texas. COUNT III The plaintiff alleges that defendant JPPG violated the following federal and state statutes which regulate insurance purchasing groups.”
Swanco Ins. Co.--Arizona v. William D. Hager, Comm'r of Ins. of the State of Iowa, 879 F.2d 353 (8th Cir. 1989). · cites it 5× “” Other sections of the Act refer separately to “the purchasing group,” “members of the group,” and “its members,” see 15 U.S.C. § 3903 (a), (b), demonstrating a clearly drawn distinction between the purchasing group and its members.”
The Ins. Co. of the State of Pennsylvania v. James P. Corcoran, Superintendent of Ins. of the State of New York, 850 F.2d 88 (2d Cir. 1988). · cites it 2× “15 U.S.C. § 3903 (a)(2). State of Penn argues that Section 4(a)(2) should be read as preempting all state regulation that would impair the creation or operation of purchasing groups.”
Garage Servs. & Equip. Dealers Liab. Ass'n of Am. v. Homes, 867 F. Supp. 1301 (E.D. Ky. 1994). · cites it 6× “The plaintiffs argue that 815 KAR 30:010, § 1 is preempted by the federal Limited Liability Risk Retention Act which prohibits states from discriminating against purchasing groups pursuant to 15 U.S.C. § 3903 (a)(8). The defendants, on the other hand, maintain that Kentucky may…”
Koken v. Legion Ins., 831 A.2d 1196 (Pa. Commw. Ct. 2003). “15 U.S.C. § 3903 (a). 31 . Participation in the Program was and is limited to members of the APA.”
United States v. Robert E. Davis, 965 F.2d 804 (10th Cir. 1992). “15 U.S.C. § 3903 (1982). In order to write "surplus lines” insurance in a state in which the insurance company is not admitted, the insurance carrier must be licensed and admitted to some other state.”
City Cab Co. v. Edwards, 745 F. Supp. 757 (D. Me. 1990). · cites it 3× “Title 15 U.S.C. § 3903 (a)(2) exempts purchasing groups from state laws which would “make it unlawful for an insurer to provide or offer to provide insurance on a basis providing, to a purchasing group or its members, advantages, based on their loss and expense experience, not…”
State of Kan., Ex Rel. Todd v. United States, 791 F. Supp. 1491 (D. Kan. 1992). “15 U.S.C. § 3903 (g). A comparable provision is not to be found in the FCIA.”
Preferred Physicians Mut. Risk Retention Grp. v. Cuomo, 865 F. Supp. 1057 (S.D.N.Y. 1994). “15 U.S.C. §§ 3903 (a)(l)(E)-(I), (2), (4) (emphasis added).”
Cas. Assurance Risk Ins. Brokerage Co. v. Dillon, 976 F.2d 596 (9th Cir. 1992). “2d 663 (1991), on the grounds that there is no private right of action to enforce 15 U.S.C. § 3903 (f) in federal court. However, this decision came well after the letter had been sent.”
Nadkos, Inc. v. Preferred Contractors Ins. Co. Risk Retention Grp. (NY 2019). “By adopting the exclusion in 15 USC § 3903 (a)(1)(A), Congress decided that in the realm of unfair claims practices laws, the normal interplay of state law as enshrined in the McCarran-Ferguson Act ( 15 USC § 1011 , et seq.”
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