(a) 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 this state, unless the purchase is effected through a licensed agent or broker acting pursuant to the surplus lines laws and regulations of this state.

Terms Used In Tennessee Code 56-45-109

  • Insurance: means primary insurance, excess insurance, reinsurance, surplus lines insurance and any other arrangement for shifting and distributing risk that is determined to be insurance under the laws of this state. See Tennessee Code 56-45-102
  • Purchasing group: means any group that:
    (A) Has as one (1) of its purposes the purchase of liability insurance on a group basis. See Tennessee Code 56-45-102
  • Risk retention group: means any corporation or other limited liability association:
    (A) Whose primary activity consists of assuming and spreading all, or any portion, of the liability exposure of its group members. See Tennessee Code 56-45-102
  • State: means any state of the United States or the District of Columbia. See Tennessee Code 56-45-102
(b) A purchasing group that obtains liability insurance from an approved surplus lines insurer in this state or a risk retention group shall inform each of the members of the group that have a risk resident or located in this state that the risk is not protected by an insurance insolvency guaranty fund in this state, and that the risk retention group or the insurer may not be subject to all insurance laws and regulations of this state.
(c) No purchasing group may purchase insurance providing for a deductible or self-insured retention applicable to the group as a whole. Coverage may provide for a deductible or self-insured retention applicable to individual members.
(d) Purchases of insurance by purchasing groups are subject to the same standards regarding aggregate limits that are applicable to all purchases of group insurance.
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