Terms Used In New York Laws > Insurance > Article 59 - Risk Retention Groups and Purchasing Groups

• Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
• Amortization: Paying off a loan by regular installments.
• Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
• Appropriation: The provision of funds, through an annual appropriations act or a permanent law, for federal agencies to make payments out of the Treasury for specified purposes. The formal federal spending process consists of two sequential steps: authorization
• Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
• Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. ^{Source: OCC}
• Commissioner: means the commissioner, director or superintendent of financial services in any other state. See N.Y. Insurance Law 5902
• Completed operations liability: means liability arising out of the installation, maintenance, or repair of any product at a site which is not owned or controlled by:
  
  (1) any person who performs that work; or
  
  (2) any person who hires an independent contractor to perform that work; but shall include liability for activities which are completed or abandoned before the date of the occurrence giving rise to the liability. See N.Y. Insurance Law 5902
• Contract: A legal written agreement that becomes binding when signed.
• Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
• Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
• Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. ^{Source: U.S. Courts}
• Financially impaired: means a risk retention group:
  
  (1) whose admitted assets are less than the sum of its aggregate liabilities and the amount of surplus to policyholders required to be maintained by a domestic risk retention group authorized to do the same kind or kinds of insurance; or
  
  (2) whose admitted assets are less than the sum of its aggregate liabilities and outstanding capital stock; or
  
  (3) which is insolvent. See N.Y. Insurance Law 5902
• Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
• Fixed Rate: Having a "fixed" rate means that the APR doesn't change based on fluctuations of some external rate (such as the "Prime Rate"). In other words, a fixed rate is a rate that is not a variable rate. A fixed APR can change over time, in several circumstances:
  • You are late making a payment or commit some other default, triggering an increase to a penalty rate
  • The bank changes the terms of your account and you do not reject the change.
  • The rate expires (if the rate was fixed for only a certain period of time).
• Hazardous financial condition: means that, based on its present or reasonably anticipated financial condition, a risk retention group, although not yet financially impaired, is unlikely to be able:
  
  (1) to meet obligations to policyholders with respect to known claims and reasonably anticipated claims; or
  
  (2) to pay other obligations in the normal course of business. See N.Y. Insurance Law 5902
• Injunction: An order of the court prohibiting (or compelling) the performance of a specific act to prevent irreparable damage or injury.
• Insolvent: means a risk retention group whose admitted assets are less than the aggregate amount of its liabilities. See N.Y. Insurance Law 5902
• Insurance: means primary insurance, excess insurance, reinsurance, excess line insurance, and any other arrangement for shifting and distributing risk which is determined to be insurance under the laws of this state. See N.Y. Insurance Law 5902
• Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
• Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). ^{Source: OCC}
• Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
• Liability: means legal liability for damages (including costs of defense, legal costs and fees, and other claims expenses) because of injuries to other persons, damage to their property, or other damage or loss to such other persons resulting from or arising out of:
  
  (1) (A) any business (whether profit or nonprofit), trade, product, services (including professional services), premises, or operations; or
  
  (B) any activity of any state or local government, or any agency or political subdivision thereof; and
  
  (2) does not include personal risk liability and an employer's liability with respect to its employees other than legal liability under the Federal Employers' Liability Act (45 U. See N.Y. Insurance Law 5902
• Litigation: A case, controversy, or lawsuit. Participants (plaintiffs and defendants) in lawsuits are called litigants.
• member: shall include each person who during the qualifying period was in the employment of a public employer which then participated for such employees in a public retirement system in this state, irrespective of whether the person was a participant in such system at that time, provided that the person has become a participant in such retirement system and has purchased service credit for a period of time that includes some or all of the qualifying period in accordance with provisions of law applicable to such purchase of service credit. See N.Y. Retirement and Social Security Law 2
• Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
• Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
• Oversight: Committee review of the activities of a Federal agency or program.
• Personal risk liability: means liability for damages because of injury to any person, damage to property, or other loss or damage resulting from any personal, familial, or household responsibilities or activities, rather than from responsibilities or activities referred to in subsection (h) of this section. See N.Y. Insurance Law 5902
• Plan of operation or feasibility study: means an analysis which presents the expected activities and results of a risk retention group making application to become chartered and licensed as a domestic property/casualty insurer in this state, including at least the following:
  
  (1) information sufficient to verify that its members are engaged in businesses or activities similar or related with respect to the liability to which such members are exposed by virtue of any related, similar, or common business, trade, product, services, premises or operations;
  
  (2) for each state in which it intends to operate, the coverages, deductibles, coverage limits, rates, and rating classification systems for each kind of insurance the group intends to offer;
  
  (3) historical and expected loss experience of the proposed members and national experience of similar exposures to the extent that this experience is reasonably available;
  
  (4) pro forma financial statements and projections;
  
  (5) appropriate opinions by a qualified, independent casualty actuary, including a determination of minimum premium or participation levels required to commence operations and to prevent the development of a hazardous financial condition;
  
  (6) identification of management, underwriting and claims procedures, marketing methods, managerial oversight methods, investment policies and reinsurance agreements;
  
  (7) identification of each state in which the risk retention group has obtained, or sought to obtain, a charter and license, and a description of its status in each state; and
  
  (8) such other matters as may be prescribed by the commissioner of the state in which the risk retention group is chartered for liability insurance companies authorized by the insurance laws of the state. See N.Y. Insurance Law 5902
• Power of attorney: A written instrument which authorizes one person to act as another's agent or attorney. The power of attorney may be for a definite, specific act, or it may be general in nature. The terms of the written power of attorney may specify when it will expire. If not, the power of attorney usually expires when the person granting it dies. ^{Source: OCC}
• Product liability: means liability for damages because of any personal injury, death, emotional harm, consequential economic damage, or property damage (including damages resulting from the loss of use of property) arising out of the manufacture, design, importation, distribution, packaging, labeling, lease, or sale of a product, but does not include the liability of any person for those damages if the product involved was in the possession of such a person when the incident giving rise to the claim occurred. See N.Y. Insurance Law 5902
• Purchasing group: means any group formed pursuant to the federal liability risk retention act of 1986 which:
  
  (1) has as one of its purposes the purchase of liability insurance on a group basis;
  
  (2) purchases such insurance only for its group members and only to cover their similar or related liability exposure, as described in paragraph three of this subsection;
  
  (3) is composed of members whose businesses or activities are similar or related with respect to the liability to which members are exposed by virtue of any related, similar, or common business, trade, product, services, premises, or operations; and
  
  (4) is domiciled in any state. See N.Y. Insurance Law 5902
• Risk retention group: means any corporation or other limited liability association formed pursuant to the federal liability risk retention act of 1986:
  
  (1) whose primary activity consists of assuming and spreading all, or any portion, of the liability exposure of its group members;
  
  (2) which is organized for the primary purpose of conducting the activity described under paragraph one of this subsection;
  
  (3) which:
  
  (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 first, nineteen hundred eighty-five, was chartered or licensed and authorized to engage in the business of insurance under the laws of Bermuda or the Cayman Islands and, before such date, had certified to the insurance commissioner of at least one state that it satisfied the capitalization requirements of such state, except that any such group shall be considered to be a risk retention group only if it has been engaged in business continuously since such date and only for the purpose of continuing to provide insurance to cover product liability or completed operations liability;
  
  (4) which does not exclude any person from membership in the group solely to provide for members of such a group a competitive advantage over such a person;
  
  (5) which:
  
  (A) has as its owners only persons who comprise the membership of the risk retention group and who are provided insurance by such group; or
  
  (B) has as its sole owner an organization which has as its members only persons who comprise the membership of the risk retention group and which organization has as its owners only persons who comprise the membership of the risk retention group and who are provided insurance by the risk retention group;
  
  (6) whose members are engaged in businesses or activities similar or related with respect to the liability of which such 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 any other risk retention group (or any member of such other risk retention group) which is engaged in businesses or activities which meet the requirement described in paragraph six of this subsection for membership in the risk retention group which provides such reinsurance; and
  
  (8) the name of which includes the phrase "risk retention group". See N.Y. Insurance Law 5902
• Service of process: The service of writs or summonses to the appropriate party.
• Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
• State: means any state of the United States or the District of Columbia. See N.Y. Insurance Law 5902
• Statute: A law passed by a legislature.
• Superintendent: means the superintendent of financial services of this state. See N.Y. Insurance Law 5902