§ 5907. Purchasing groups; exemption from certain laws. A purchasing group and its insurer shall be subject to all applicable laws of this state, except that a purchasing group and its insurer shall be exempt, in regard to liability insurance for the purchasing group and any of its members, from any law that would:

Terms Used In N.Y. Insurance Law 5907

  • 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
  • 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
  • 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
  • State: means any state of the United States or the District of Columbia. See N.Y. Insurance Law 5902

(a) prohibit the establishment of a purchasing group;

(b) make it unlawful for an insurer to provide or offer to provide liability 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;

(c) prohibit a purchasing group or its members from purchasing liability insurance on a group basis described in subsection (b) of this section;

(d) prohibit a purchasing group from obtaining liability 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;

(e) require that a purchasing group must have a minimum number of members, common ownership or affiliation, or a certain legal form;

(f) require that a certain percentage of a purchasing group must obtain liability insurance on a group basis; or

(g) otherwise discriminate against a purchasing group or any of its members.

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