Page:United States Statutes at Large Volume 100 Part 4.djvu/243

 PUBLIC LAW 99-563—OCT. 27, 1986 >

100 STAT. 3171

"(7) 'hazardous financial condition' means that, based on its present or reasonably anticipated financial condition, a risk retention group is unlikely to be able— "(A) to meet obligations to policyholders with respect to known claims and reasonably anticipated claims; or < "(B) to pay other obligations in the normal course of business.".

SEC. 4. REQUIREMENTS RELATING TO RISK RETENTION GROUPS AND PURCHASING GROUPS. (a) CHARACTERISTICS OF RISK RETENTION GROUPS AND THEIR MEM-

BERS.—(1) Section 2(a)(4) (15 U.S.C. 3901(a)(4)) is amended by striking "taxable as a corporation, or as an insurance company, formed under the laws of any State, Bermuda, or the Cayman Islands". (2) Subparagraph (A) of such section is amended by striking "product liability or completed operations liability risk exposure" and inserting "liability exposure". (3) Subparagraph (C) of such section is amended to read as follows: "(C) which— ':,^ "(i) is chartered or licensed as a liability insurance .>: company under the laws of a State and authorized to engage in the business of insurance under the laws of such State; or "(ii) before January 1, 1985, 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
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any such group shall be considered to be a risk retention group only if it has been engaged in business I,,> continuously since such date and only for the purpose of continuing to provide insurance to cover product liability or completed operations liability (as such terms were defined in this section before the date of the enactment of the Risk Retention Act of 1986);". (4) Such section is further amended— (A) by striking "and" at the end of subparagraph (D); and (B) by striking subparagraph (E) and inserting the following new subparagraphs: "(E) which— "(i) has as its owners only persons who comprise the membership of the risk retention group and who are provided insurance by such group; or ''*r;t,^ "(ii) has as its sole owner an organization which has as—

"(I) its members only persons who comprise the membership of the risk retention group; and "(II) its owners only persons who comprise the membership of the risk retention group and who are provided insurance by such group; "(F) whose 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;

Corporations. Business and industry. Bermuda. Cayman Islands.

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