Petition for Writ of Certiorari — Swanco Insurance Co.-Arizona v. Hager

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89-ss7 i) | mon

NOV 20 1889

JOSEPH F. SPANIOL,

No. CLERK

nen, .. eee.

In The

Supreme Court of the United States

October Term, 1989

SWANCO INSURANCE COMPANY-ARIZONA,

Petitioner,

WILLIAM D. HAGER,

Commissioner of Insurance of the State of Iowa,

Respondent.

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

JOHN C. SCHACHTERLE

Counsel of Record

DREHER, WILSON, SIMPSON,

JENSEN, SELLERS, BUTTERS,

Apams & Kaiser, P.C.

1200 Hub Tower

699 Walnut Street

Des Moines, Iowa 50309

(515) 288-5000

Counsel for Petitioner

COCKLE LAW BRIEF PRINTING CO, (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTIONS PRESENTED

1. Whether a state law eliminating licensing

requirements for certain types of insurers which is passed

during the pendency of an appeal relating to such licens-

ing requirements must be taken into consideration by the

appellate court.

2. Whether a state law requiring an insurance com-

pany to be licensed in the state prior to selling insurance

in that state is preempted by a federal act that allows

certain insurers to sell insurance in certain states without

being licensed in those states.

PARTIES TO THE PROCEEDING

IN THE COURT OF APPEALS

The parties to the proceeding in the Court of Appeals

were as follows:

Appellants

(now petitioners):

Swanco Insurance Company-Arizona

Appellees

(now respondents):

William D. Hager, Commissioner of Insurance of the State

of lowa

ili

TABLE OF CONTENTS

Page

TITLE

eb) ye © By 1 ts» || 2 i

PARTIES TO THE PROCEEDING .................. ii

sR Vv

66 CoS SRO AS eases ccscceesceseenn 1

CCE GhSGKGERS KOA CD enAcccecececesencs 2

CONSTITUTIONAL PROVISIONS AND STATUTES... 2

or eB a! nn 3

REASONS FOR GRANTING THE WRIT ........... 8

A. THE EIGHTH CIRCUIT COURT OF APPEALS’

REFUSAL TO ADDRESS THE APPLI-

CABILITY OF A STATE LAW ELIMINATING

LICENSING REQUIREMENTS FOR CERTAIN

TYPES OF INSURERS WHICH WAS

ENACTED DURING THE PENDENCY OF AN

APPEAL RELATING TO SUCH LICENSING

REQUIREMENTS IS CONTRARY TO PRE-

VIOUS DECISIONS OF THIS COURT........ 8

TABLE OF CONTENTS - Continued

Page

B. THE HOLDING OF THE EIGHTH CIRCUIT

COURT OF APPEALS THAT A STATE LAW

REQUIRING AN INSURANCE COMPANY TO

BE LICENSED IN A STATE PRIOR TO SELL-

ING INSURANCE IN THAT STATE IS NOT

PREEMPTED BY A FEDERAL ACT THAT

ALLOWS CERTAIN INSURERS TO SELL

INSURANCE IN CERTAIN STATES WITHOUT

BEING LICENSED IS CONTRARY TO THE

DECISIONS OF THIS COURT AND

OBSTRUCTS THE CONGRESSIONAL GOAL

OF FACILITATING SALES IN A ONE-HALF

BILLION DOLLAR SEGMENT OF THE

INSURANCE INDUGERY .... cc ccccscsccccccs 12

CRePe NS 8605 60d KC eee ceteedeedeeccisnneeece’ 19

TABLE OF AUTHORITIES

Page

Cases:

Bernstein v. Centaur Ins. Co., 606 F. Supp. 98

GREROEY, TOBE onc iisecacccsacencecrnusaseseescns 16

Chicago & Northwestern Transp. Co. v. Kalo Brick &

Tile Co., 450 U.S. 311 (1981) ....... 6... e eee eee ees 16

Corey v. White, 457 U.S. 85 (1982), citing Worcester

County Trust Co. v. Riley, 302 U.S. 292 (1937)...... 11

Free v. Bland, 369 U.S. 663 (1962)...............5. 15, 16

Frontier Insurance Co. v. Hager, No. 87-645-E (S.D.

ROOD GUT, Bip WG 66s cecnknceccccccasdatuascnnes 4

Fusari v. Steinberg, 419 U.S. 379 (1975). ......... 0.005. 9

Hanover Ins. Co. v. C.1.R., 588 F.2d 1211 (ist Cir.

SPOR 2 0005s bc cnhe nda ecdeikeenaeeeeans 16

James v. Ball, 613 F.2d 180 (9th Cir. 1980)............. 9

Jones v. Rath Packing Co., 430 U.S. 519 (1977)........ 15

Perrin v. United States, 444 U.S. 37 (1979)............ 10

Rice v. Santa Fe Elevator Corp., 331 U.S. 218 (1947) .... 15

Swanco Ins. Co. v. Hager, 879 F.2d 353 (8th Cir.

INS 4:64600004545054465 000 ban eh Rahaneee 9, 11, 14, 17

United States v. Schooner Peggy, 5 U.S. (1 Cranch)

We OD nasa cdsudeadenckusteessuebeeaeueeeeees 8

CONSTITUTIONAL PROVISION:

Article VI of the Constitution of the United States

OF Kec car eo kaneOb ck coe eee coerce 15

hierniana

TABLE OF AUTHORITIES - Continued

Page

STATUTES:

BD SEIin © FeO e sci cvcccensaccesnnnceeccagaessbannian 5

CS Cees Ge Wenn 05.0000005000050000 cera be nee 4

CS WK, GB WR GD ccc cncieccencsscncccsctaces 5, 16

Product Liability Risk Retention Act of 1981, as

amended by the Liability Risk Retention Act of

1986, 15 U.S.C. §§ 3901-3906 (1982 and Supp. V.

COUP ew cncacnencdedetdec cette wus cuctneagnbelease 2, 3

CS ULB BS ven sidccnsncnncceadassdanpens 6, 7

SD UB. B TP oc vccnccccacccectccussnnceneaa 7

CD Wan SONU a cui Succes cnenseneucekens 6, 7,8

CD Wiles FP SPOT h aes cvatevenkabeunnceba bene 6

CD Sian eee 5 0.0 i vn 000 cnnenceeceebeueekaeeeae 6

CD Wis Ge a 005 00cscecnancecavakeeeheeneee 8

CD Cex 0 OS oa cccahenancyewacddcauene 14, 16, 17

SD Wells © GRRE sv oivcccucacacncccnsanuceaneeeeeee 2

SD Wags MD WON a 5'0 scans ccnccnnbakuckhcxheeeelene 2 3

ee te fh Bh OE ee ee 3

SOU SIE Oe ED onc accncukasadcesaceank 2, 8, 10, 11

SRUe GREE BH es i 6 vn cékkesks0cntnweoueeee 10

Leorstative History:

H.R. Rep. No. 190, 97th Cong., Ist Sess. 4 (1981),

reprinted in 1981 U.S. Code Cong. & Admin.

News 1432, 1432-33 ("H.R. Rep. No. 190”) ......... 5

vii

TABLE OF AUTHORITIES - Continued

Page

H.R. Rep. No. 190 at 5-6... 0... 6.66 c cece eee eee eee ees 6

H.R. Rep. No. 190 at 7.2.2.0... cece ence eee eee ee ees 6

H.R. Rep. No. 865, 99th Cong., 2nd Sess. 1, 8

reprinted in 1986 U.S. Code Cong. & Admin.

News, 5303, 5304 (“H.R. Rep. No. 865") ........... 6

H.R. Rep. No. 865 at 7 ... 0... 6... c cece cece eee eens 14

Oruer AUTHORITIES:

N.J. Agents Call for RRG, PG Regs, National Under-

writer, Nov. 6, 1989, at 60 .... 2.2... 6. cece eee eens 8

Cutts, Survey of 337 Purchasing Groups Reveals 76%

are Active and 1988 Estimated Premium Exceeds

One-Half Billion Dollars, Risk Retention Rep.,

July 15, 19D, at 6, 7... cc ccccccccccesccsssesesees 17

Risk Retention Pulse Points: Purchasing Groups, Risk

Retention Rep., Nov., 15, 1989, 7-18... ... 6.6.0.5. 17

Best's Insurance Reports — Property-Casualty 374

SE OKADA Ka wsaccccccnccinbsonecens eeabukesnees 18

—@

In The

Supreme Court of the United States

October Term, 1989

7°

SWANCO INSURANCE COMPANY-ARIZONA,

Petitioner,

WILLIAM D. HAGER,

Commissioner of Insurance of the State of lowa,

Respondent.

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

sé.

The petitioner, Swanco Insurance Company-Arizona,

respectfully prays that a writ of certiorari issue to review

the judgment and opinion of the United States Court of

Appeals entered in the above-entitled proceeding on

August 23, 1989.

ae ”™

OPINIONS BELOW

The opinion of the Court of Appeals is reported at

879 F.2d 353 (8th Cir. 1989) and is reprinted at App. la of

the appendix to this petition. The opinion of the District

ae le

Court is unreported but is reprinted at -App. 1b of the

appendix.

JURISDICTION

Swanco Insurance Company-Arizona petitions for a

writ of certiorari to review the judgment of the United

States Court of Appeals for the Eighth Circuit in this case.

The jurisdiction of the district court was invoked pur-

suant to 28 U.S.C. § 1331 since the case was a civil action

arising under the laws of the United States.

The opinion of the Court of Appeals was entered on

July 12, 1989. A petition for rehearing was timely filed

and was denied on August 23, 1989. The jurisdiction of

this Court is invoked under 28 U.S.C. § 1254(1).

CONSTITUTIONAL PROVISIONS AND STATUTES

The relevant constitutional provision involved in this

case is Article VI. The text of this article is reprinted at

App. Ic of the appendix.

The relevant statutes involved in this case are the

Product Liability Risk Retention Act of 1981, as amended

by the Liability Risk Retention Act of 1986, 15 U.S.C.

§ 3901-3906 (1982 and Supp. V. 1987) and Iowa Code

§ 515E.9. The text of the federal statute is reprinted at

App. 1d of the appendix. The text of the state statute is

reprinted at App. le of the appendix.

—

STATEMENT OF THE CASE

This lawsuit commenced when petitioners filed a

complaint for declaratory, injunctive, and other relief on

September 24, 1987. The jurisdiction of the district court

was invoked pursuant to 28 U.S.C. § 1331 since the case

was a Civil action arising under the laws of the United

States. Petitioner Swanco Insurance Company-Arizona

(Swanco) provides, or seeks to provide, group liability

insurance to several purchasing groups that have Iowa

members. Swanco is an Arizona corporation, chartered

and licensed as a property-casualty insurer, with its prin-

cipal place of business located in Tucson, Arizona.

Swanco has not been admitted or approved under lowa

law to issue insurance in Iowa.

By notice of hearing, dated July 22, 1987, respondent

William D. Hager (Hager or the Commissioner) notified

the petitioner that a hearing was set for September 8,

1987, to determine whether these insurers had acted in

violation of the insurance laws of lowa. Specifically, the

notice alleges that petitioner had engaged in the

unauthorized sale of insurance in the state of lowa in

violation of the Unauthorized Insurers’ Act, lowa Code

§ 507A (1987).

On September 4, 1987, petitioner filed a motion to

dismiss for lack of subject matter jurisdiction on the

ground that the Product Liability Risk Retention Act of

1981 as amended by the Liability Risk Retention Act of

1986, 15 U.S.C. §§ 3901-3906 (1982 and Supp. V. 1987) (the

Act or the Risk Retention Act) preempted Hager’s author-

ity as Commissioner to apply the lowa Unauthorized

Insurers’ Act to plaintiffs. The hearing set for September

8, 1987, was stayed indefinitely. Petitioner’s motion was

denied by a hearing examiner on September 11, 1987.

This lawsuit was commenced when petitioners filed a

complaint for declaratory, injunctive, and other relief on

September 24, 1987. This matter came before the district

court upon a motion for summary judgment filed by the

petitioner on March 17, 1988. Both parties consented to

have the matter decided by a United States magistrate.

Furthermore, both parties fully briefed the issues

involved and a decision was rendered by Magistrate

Ronald E. Longstaff on June 15, 1988.!

An appeal was filed by the petitioner, and the opin-

ion of the Eighth Circuit Court of Appeals was issued on

July 12, 1989. The petitioner filed a timely petition for

rehearing, which was denied by the Eighth Circuit on

August 23, 1989.

A. BACKGROUND

1. McCarran-Ferguson Act

In March of 1945 the United States Congress enacted

15 U.S.C. §§ 1011-1015, more commonly known as the

“McCarran-Ferguson Act.” The declaration of policy set

out in Section 1011 of the Act states:

The Congress hereby declares the continued

regulation and taxation by the several States of

the business of insurance is in the public inter-

est, and that silence on the part of the Congress

shall not be construed to impose any barrier to

1 Magistrate Longstaff did not issue a full opinion in this

case but instead incorporated by reference his order in Frontier

Insurance Co. v. Hager, No. 87-645-E (S.D. lowa April 27, 1988),

a case involving virtually identical facts and issues.

the regulation or taxation of such business by

the several States.

15 U.S.C. § 1011.

The McCarran-Ferguson Act further states:

(a) State regulation. The business of insurance,

and every person engaged therein, shall be sub-

ject to the laws of the several States which relate

to the regulation or taxation of such business.

(b) Federal regulation. No Act of Congress shall

be construed to invalidate, impair, or supersede

any law enacted by any State for the purpose of

regulating the business of insurance, or which

imposes a fee or tax upon such business, unless

such act specifically relates to the business of

insurance...

15 U.S.C. § 1012(a), (b).

The sections of the McCarran-Ferguson Act refer-

enced above are meant to grant states exclusive jurisdic-

tion over the “business of insurance” unless a federal

statute specifically regulating the area is enacted. There-

fore, if Congress enacts a statute relating to a specific area

of the “business of insurance,” a state law in conflict with

that specific federal statute would be invalid. If Congress

does not speak to a specific area of the “business of

insurance,” states retain their regulatory control, as they

have since 1945.

2. Product Liability Risk Retention Act of 1981

The 1981 Product Liability Risk Retention Act was

passed by Congress because of its belief that businesses

were in many cases unable to procure product liability

insurance at any price. H.R. Rep. No. 190, 97th Cong., Ist

Sess. 4 (1981), reprinted in 1981 U.S. Code Cong. & Admin.

News 1432, 1432-33 (“H.R. Rep. No. 190”). The statute

was designed, among other things, to reduce the cost and

increase the availability of product liability insurance.

H.R. Rep. No. 190 at 5-6. It also sought to relieve insurers

of the burden of compliance with the varying and some-

times conflicting laws of many different states and the

burden of dealing with multi-state product liability prob-

lems. Id. at 6.

The 1981 Act provided for the formation of two types

of groups: risk retention groups and purchasing groups.

A “risk retention group” is an insurance cooperative

formed by various businesses to assume and spread all or

any portion of the product liability exposure. 15 U.S.C.

§§ 3901(a)(4), 3902; H.R. Rep. No. 190 at 7. A “purchasing

group” allows businesses to purchase product liability

insurance on a group basis. 15 U.S.C. §§ 3901(a)(5), 3903;

H.R. Rep. No. 190 at 7.

3. Liability Risk Retention Act of 1986

The Liability Risk Retention Act of 1986 came as a

response to an insurance crisis that was “far more severe

than those previously experienced.” H.R. Rep. No. 865,

99th Cong., 2nd Sess. 1, 8 reprinted in 1986 U.S. Code

Cong. & Admin. News, 5303, 5304 (“H.R. Rep. No. 865”).

While the 1981 Act preempted certain state laws and

regulations that intended to prohibit the formation of

product liability risk retention groups and purchasing

groups, the 1986 Act’s legislative history states that the

purpose of the amendment was to expand “the scope of

the preemption to enable risk retention groups and pur-

chasing groups to provide not only product liability

insurance, but all types of liability insurance as defined in

the bill.” Id. at 7.

In addition to extending the Act’s application to

other commercial enterprises with similar risks, the 1986

Act “augments the authority to nonchartering states to

regulate solvency, trade practices, and other matters. The

bill contains other provisions intended to insure that risk

retention groups and purchasing groups are appro-

priately supervised by the regulatory authorities.” Id.

Therefore, while extending types of liability coverage

available to risk retention and purchasing groups, the

1986 Act augmented a nonchartering state’s powers.

4. Difference Between

Risk Retention Groups and Purchasing Groups

As stated above, the Act provides for the formation

of risk retention groups [15 U.S.C. § 3901(a)(4)] and pur-

chasing groups [15 U.S.C. § 3901(a)(5)]. A risk retention

group is an insurance provider. A purchasing group is in

the business of buying insurance for its similarly situated

group members. These risk retention groups and pur-

chasing groups are legal entities, consisting of corpora-

tions or other limited liability associations. Under the

Act, a risk retention group must be chartered or licensed

by one state prior to operating in all states as a group. 15

U.S.C. § 3901(a)(4)(c). A purchasing group is not subject

to any chartering requirements as they are not providers

of insurance and solvency and other similar requirements

are therefore inapplicable. However, a purchasing group

must be domiciled in a state, any state, and must notify

any nondomiciliary state of its intention to do business in

that state. 15 U.S.C. § 3901(a)(5) and 15 U.S.C. § 3903(d).

5. Recently Enacted Iowa Law

On July 1, 1988, a state law version of the Risk

Retention Act took effect.2 This law was based on model

legislation as promulgated by the National Association of

Insurance Commissioners and was passed by the Iowa

Legislature in the spring of 1988.5 The new lowa law

provides a means by which purchasing groups may

obtain liability insurance from an insurer not admitted or

licensed in the state of lowa. The Eighth Circuit declined

to review the effect of this new statute since it was raised

for the first time on appeal.

REASONS FOR GRANTING THE WRIT

A. THE EIGHTH CIRCUIT COURT OF APPEALS’

REFUSAL TO ADDRESS THE APPLI-

CABILITY OF A STATE LAW ELIMINATING

LICENSING REQUIREMENTS FOR CERTAIN

TYPES OF INSURERS WHICH WAS

ENACTED DURING THE PENDENCY OF AN

APPEAL RELATING TO SUCH LICENSING

REQUIREMENTS IS CONTRARY TO PRE-

VIOUS DECISIONS OF THIS COURT.

In United States v. Schooner Peggy, 5 U.S. (1 Cranch)

102, 110 (1801), Chief Justice Marshall said:

2 lowa Code § 515E.9

3 Legislation based on this National Association of Insur-

ance Commissioners model has been passed by 38 states. N./.

Agents Call for RRG, PG Regs, National Underwriter, Nov. 6,

1989 at 60.

It is, in the general, true, that the province of an

appellate court is only to inquire whether a

judgment when rendered was erroneous or not.

But if, subsequent to the judgment, and before

the decision of the appellate court, a law inter-

venes and positively changes the rule which

governs, the law must be obeyed . . .

In other words, when an appellate court reviews a

decision of a district court, they must look to the statute

as it presently reads, not as it read when the district court

rendered its decision. Fusari v. Steinberg, 419 U.S. 379, 387

(1975). See also, James v. Ball, 613 F.2d 180, 181 n. 1 (9th

Cir. 1980) (dealing with an appellate court interpretation

of state law as modified subsequent to the district court

decision).

This matter came before the United States Court of

Appeals for the Eighth Circuit as an appeal to an order

rendered on June 15, 1988, by the United States District

Court for the Southern District of lowa. On July 1, 1988, a

state law version of the Risk Retention Act took effect. In

its appellate brief, Swanco argued that this change in the

Iowa statutory law nullified the state licensure law at

issue and asked that the Court overturn the district

court’s ruling. The Court of Appeals declined “to address

this issue since it is raised for the first time on appeal.”

Swanco Ins. Co. v. Hager, 879 F.2d 353, 359 n. 11 (8th Cir.

1989), reprinted at App. la, 14a of the appendix to this

petition. However, because the state licensure law

changed prior to the decision of the appellate court, the

court was obligated to look at the statute as it currently

read, not as it read when the district court rendered its

decision. Fusari and James, supra.

The new Iowa law provides means by which pur-

chasing groups may obtain liability insurance from an

insurer not admitted in the state. lowa Code § 515E.9

states in part:

A purchasing group shall not purchase

insurance from a risk retention group or from an

insurer unless one or more of the following

conditions apply:

4. A purchasing group which obtains liability

insurance from an insurer not admitted in this state

or a risk retention group shall inform each of the

members of the group, which have a risk resi-

dent 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 insurer may not be subject to all insur-

ance laws and regulations of this state.

(Emphasis added.)

In analyzing this language, it should be noted that a

fundamental canon of statutory construction is that all

words are interpreted as taking their common, contem-

porary, and ordinary meaning. Perrin v. United States, 444

U.S. 37, 40 (1979). In adopting this new law [lowa Code

§ 515E.9(4)], the Iowa legislature set up a disclosure

requirement that must be met by a purchasing group

when it obtains insurance from an “insurer not admitted”

in lowa. This language, when taken at its ordinary and

common meaning, includes a company such as Swanco

———

which may now insure purchasing groups with lowa

members even though it is “not admitted” in lowa.*

In its opinion, the Court of Appeals identified the

question raised on appeal as “whether, consistent with

the Act, the State of Iowa may require an insurance

company providing coverage to a purchasing group

domiciled in another state but having members in Iowa to

be licensed in Iowa.” Swanco, supra at 354, App. 2a. With

the enactment of lowa Code § 515E.9 it is apparent that,

consistent with the federal act and with current Iowa law,

the state may not require an insurance company in such

an instance to be licensed in Iowa.> Therefore, because of

* This same statutory construction approach can be uti-

lized to counter the Commissioner’s presumed argument that

the words “insurer not admitted” in Iowa refer to an excess

and surplus lines carrier. If in fact the lowa legislature had

intended to refer to excess and surplus lines carriers, they

would have used such precise language. However, the com-

mon interpretation of the language as written includes com-

panies such as Swanco and allows them to insure purchasing

groups with lowa members.

5 As we have previously discussed, the Court of Appeals

held that the Act itself does not require that a company be

licensed in Iowa in order to sell insurance to a purchasing

group with lowa members. Swanco, supra at 356, App. 5a-7a.

Furthermore, our prior analysis indicates that lowa law as

modified also contains no such licensing requirements. There-

fore, if Commissioner Hager seeks to invoke the licensing

requirement, he will be in violation of both federal and state

law. The fact that he is in violation of federal law allows the

Court to grant relief against him despite the 11th Amendment

to the United States Constitution. See Corey v. White, 457 U.S.

85, 89 (1982), citing Worcester County Trust Co. v. Riley, 302 U.S.

292, 297 (1937).

the change in the law, the Court of Appeals was obligated

to apply the revised statute and either reverse the deci-

sion of the lower court or remand the case for further

review.

In light of the foregoing, petitioner respectfully

requests that the Court grant this petition for writ of

certiorari to review this matter and to bring the Court of

Appeals’ decision into conformity with prior decisions of

this Court.

B. THE HOLDING OF THE EIGHTH CIRCUIT

COURT OF APPEALS THAT A STATE LAW

REQUIRING AN INSURANCE COMPANY TO

BE LICENSED IN A STATE PRIOR TO SELL-

ING INSURANCE IN THAT STATE IS NOT

PREEMPTED BY A FEDERAL ACT THAT

ALLOWS CERTAIN INSURERS TO SELL

INSURANCE IN CERTAIN STATES WITHOUT

BEING LICENSED IS CONTRARY TO THE

DECISIONS OF THIS COURT AND

OBSTRUCTS THE CONGRESSIONAL GOAL

OF FACILITATING SALES IN A ONE-HALF

BILLION DOLLAR SEGMENT OF THE

INSURANCE INDUSTRY.

In this case, Swanco is asserting, inter alia, that lowa’s

insurance licensing law is preempted by the Risk Reten-

tion Act based on the language and structure of the Act

as well as the intent delineated by Congress. However,

before we delve into an analysis of the preemption doc-

trine, it is essential that this Court understand the nature

of insurance licensure and the practical ramifications of

the Court of Appeals’ decision on this area.

Licensure is the foundation of insurance regulation.

Maintaining financial solvency of insurance companies

and protecting consumers are two primary goals of an

insurance commissioner, and licensure is one of the tools

that a commissioner uses to achieve these goals. Ulti-

mately, an insurance commissioner’s “power” over an

insurance company’s right to do business in a certain

state provides the basis for a commissioner to examine

the company’s financial records, punish it for fraudulent

advertising, and perform a myriad of other regulatory

and administrative tasks.

Obtaining a license to sell insurance in a state is

normally a time-consuming and expensive proposal. For

this reason, each license a company possesses is worth a

significant amount of money. When a company is sold, a

license in a state such as New York or California can be

worth a million dollars or more because of the time and

expense involved in getting admitted as well as the

intrinsic value of a license in these highly populated

States.

As we have previously mentioned, the mid-1980s

was a tough period for insurance purchasers. Prices rose

dramatically and insurance was not available in many

instances. Directors of corporations resigned because

they could not purchase directors’ and officers’ coverage.”

Municipal parks and swimming pools were actually

closed because of the unavailability of insurance. Further-

more, many professionals and small business people

found they could not obtain insurance or could not afford

it if it was available.

14.

In response to this “insurance crisis,” Congress

passed the 1986 amendments to the Risk Retention Act.

These amendments expanded the 1981 Act to allow the

sale of all types of liability insurance.

One of Congress’ primary goals was to “facilitate the

formation and operation of purchasing groups,” H.R.

Rep. No. 865 at 7, so that consumers could band together

and purchase liability insurance on a group basis, thereby

spreading the risk and utilizing economies of scale. These

purchasing groups would be used as a tool to make

insurance more available and more affordable. Id. at 8. In

an effort to achieve this goal, Congress inserted section

3903(f) of the Act. The Commissioner contended that a

purchasing group is “located” wherever the group has

members and that section 3903(f) required that an insurer

providing coverage to a purchasing group be licensed in

each state where the group has members. Swanco con-

tended that section 3903(f) required that an insurer be

licensed only in its state of domicile. In its review of the

case, the Court of Appeals correctly concluded that sec-

tion 3903(f) requires that the insurer be licensed only in

the purchasing group’s state of domicile. Swanco, supra, at

356, App. 5a-7a.

®* 15 U.S.C. § 3903(f), which provides in part, “a purchas-

ing group may not purchase insurance . . . 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 regula-

tions of such State.” (Emphasis added.)

The question remains whether Congress intended to

exempt insurers and purchasing groups from the licens-

ing and regulatory laws of nondomiciliary states. Swanco

submits that Congress has preempted nondomiciliary

states from regulating insurers of purchasing groups by

the language, structure, and goal of the Act. Such pre-

emption is necessary to ensure that Congress’ goal is met.

We begin our analysis of the preemption area with a

review of the “supremacy clause” of the Constitution.

Article VI of the Constitution of the United States of

America provides in pertinent part as follows:

This Constitution, and the Laws of the

United States which shall be made in Pursuance

thereof; and all Treaties made, or which shall be

made, under the Authority of the United States,

shall be the supreme Law of the Land; and the

Judges in every State shall be bound thereby,

any Thing in the Constitution or Laws of any

State to the Contrary notwithstanding.

The supremacy clause gives rise to the preemption

doctrine in cases where there is a conflict between state

and federal law.

In preemption cases. the court starts with the

assumption that the powers of the states are not to be

superseded by a federal act unless that was the clear and

manifest purpose of Congress, Jones v. Rath Packing Co.,

430 U.S. 519, 525 (1977). Preemption can also occur when

there is an outright conflict between federal and state law,

Free v. Bland, 369 U.S. 663, 666 (1962), where Congress has

legislated comprehensively, thus occupying an entire

field of regulation, leaving no room for the states to

supplement federal law, Rice v. Santa Fe Elevator Corp., 331

U.S. 218, 230 (1947), or where state law stands as an

obstacle to the accomplishment of execution of the full

objectives of Congress, Chicago & Northwestern Transp. Co.

v. Kalo Brick & Tile Co., 450 U.S. 311, 317 (1981).

In the case at bar, the Court of Appeals’ finding that

the Act does not preempt nondomiciliary states from

regulating insure:’s of purchasing groups is at odds with

the prior findings of this Court. Furthermore, the Court

of Appeals’ decision severely hinders the operation of a

major portion of the Act, and in doing so, obstructs the

goal as set out by Congress.

The Court of Appeals correctly held that section

3903(f) of the Act requires that an insurer be licensed only

in the purchasing group’s state of domicile. Since the

language of section 3903(f) is in direct conflict with the

licensing requirements of Iowa, federal law must prevail.”

Free v. Bland, supra. Furthermore, our analysis below

makes it clear that the state licensing law stands as an

obstacle to the Risk Retention Act and its goals. There-

fore, preemption should occur. Chicago & Northwestern

Transp. Co. v. Kalo Brick & Tile Co., supra.

? Petitioner submits that finding preemption is easier in

cases such as this where both the state and federal law deal

with the business of insurance. This is because the McCarran-

Ferguson Act, which gives states the authority to regulate

insurance, is inapplicable by its own terms when a conflicting

federal law deals with the “business of insurance.” Therefore,

the federal law should prevail. See 15 U.S.C. § 1012(a), (b);

Hanover Ins. Co. v. C.1.R., 588 F.2d 1211, 1218 (1st Cir. 1979); see

also, Bernstein v. Centaur Ins. Co., 606 F. Supp. 98, 101 (S.D.N.Y.

1984).

In reviewing the district court’s opinion, the Court of

Appeals seeks to “determine whether Congress plainly

has demonstrated its intent that Section 4(f) [now 15

U.S.C. § 3903(f)] should have preemptive effect.” Swanco,

supra, at 357, App. Ya. In their analysis of that issue, they

spent a great deal of time looking at the legislative his-

tory of the Act without ever taking a step back and

looking at the practical reality of nondomiciliary licens-

ing requirements.® If the state licensing law is not pre-

empted, a primary goal of the Act will be thwarted and a

major segment of the insurance industry will be harmed.

Congress clearly did not want this to be the case.

In 1988, 337 purchasing groups took in estimated

premiums of 575.1 million dollars. Cutts, Survey of 337

Purchasing Groups Reveals 76% are Active and 1988 Esti-

mated Premium Exceeds One-Half Billion Dollars, Risk

Retention Rep., July 15, 1989, at 6, 7. Furthermore, 315,000

insureds obtained coverage through purchasing groups.

Id. A list of these purchasing groups is found at Risk

Retention Pulse Points: Purchasing Groups, Risk Retention

Rep., Nov. 15, 1989, 7-18, reprinted at App. 1f. A review

of this list shows the wide variety of consumers using

purchasing groups to obtain various forms of insurance.

If the Court of Appeals’ decision is allowed to stand, any

8 In their analysis, the Court of Appeals glosses over the

burden presented to purchasing group insurers by multi-state

licensing laws. Footnote 10 of the opinion indicates the Court’s

position that a nondomiciliary state’s licensing law is no more

of a “burden” to a purchasing group insurer than it is to any

other insurer. Swanco, supra, at 359, n. 10, App. 13a. While that

may be true in theory, it must be remembered that the purpose

of the Act is to remove such “burdens” to facilitate the forma-

tion and operation of purchasing groups to alleviate the insur-

ance crisis.

of these purchasers buying insurance from a company

that is not licensed in their state may suddenly find

themselves without coverage. For example, the National

Association of Emergency Medical Technicians, Inc., Pur-

chasing Group is based in Arizona and has registered as a

purchasing group in California, Colorado, Delaware, Ten-

nessee, and Texas, App. 25f. The purchasing group pro-

vides all forms of liability coverage to its members,

including professional malpractice coverage, App. 25f;

Best’s Insurance Reports — Property-Casualty 374 (1989).

They are currently purchasing insurance from AzStar

Insurance Company (AzStar), a company domiciled in

Arizona and licensed as an excess and surplus lines car-

rier in numerous states, App. 25f; Best’s, supra. However,

AzStar is not licensed in either Delaware or Tennessee,

Best’s, supra. Therefore, if the Court of Appeals’ decision

is not reversed, AzStar will no longer be able to sell

insurance to purchasing group members in Delaware or

Tennessee. Furthermore, it is questionable whether the

members left without coverage will be able to obtain

coverage elsewhere. If insurers writing professional mal-

practice insurance existed in great numbers, there would

not have been an availability crisis in the first place. This

point cannot be overemphasized —- if widely licensed

companies selling unique forms of insurance at a reason-

able price were readily available, the insurance crisis

would not have developed and the Act would not have

been necessary. Interpreting the Act to require non-

domiciliary state licensure severely thwarts Congress’

intent to facilitate the operation of purchasing groups and

to increase the availability and affordability of insurance.

Since Congress’ goal is obstructed, the state licensure law

must be preempted.

Swanco has shown that this is a matter of utmost

importance to the insurance industry and to society as a

whole. They have also shown that the Court of Appeals’

decision is contrary to the decisions of this Court. In light

of this, petitioner respectfully requests that the Court

grant this petition for writ of certiorari to review this

important matter and to bring the Court of Appeals’

decision into conformity with prior decisions of this

Court.

CONCLUSION

For all of the foregoing reasons, this petition for writ

of certiorari should be granted. Petitioner reiterates that

the Eighth Circuit Court of Appeals acted contrary to the

decisions of this Court by failing to consider the effect of

a law passed during the pendency of an appeal. Further,

the Court of Appeals erred by not finding that a federal

act will preempt state law when the state law obstructs

Congress’ goal and is contrary to decisions of this Court.

Therefore, this petition for writ of certiorari should be

granted.

Respectfully submitted,

DREHER, WILSON, SIMPSON,

JENSEN, SELLERS, BUTTERS,

Apams & Kaiser, P.C.

By: John C. Schachterle

JOHN C. SCHACHTERLE

Attorneys for Petitioner

APPENDICES

Order and Judgment of the Eighth Circuit Court of

Appeals

Order of the United States District Court for the

Southern District of Iowa, Central Division

Article VI of the United States Constitution

The Risk Retention Act, 15 U.S.C. §§ 3901-3906 (1987

Supp.)

Iowa Code § 515E.9

List of Purchasing Groups from the Risk Retention

Reporter

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

No. 88-2113

Swanco Insurance 7

Company - Arizona, "

: Appeal from the United

Appellant, ° States District Court

Vv. ° for the Southern District

William D. Hager, . oo Cas.

Commissioner .

of Insurance of the ‘

State of Iowa, .

Appellee.

Submitted: December 12, 1988

Filed: July 12, 1989

Before BOWMAN and MAGILL, Circuit Judge, and

BATTEY, District Judge.*

BOWMAN, Circuit Judge.

* The HONORABLE RICHARD H. BATTEY, United States

District Judge for the District of South Dakota, sitting by

designation.

This appeal involves the Product Liability Risk

Retention Act of 1981 as amended by the Liability Risk

Retention Act of 1986, 15 U.S.C. §§ 3901-3906 (1982 &

Supp. V 1987) (the Act), which authorizes persons and

businesses with similar or related liability exposure to

form “purchasing groups” for the purpose of purchasing

liability insurance on a group basis and “risk retention

groups” for the purpose of self insurance. 15 U.S.C.

§ 3901(a)(4), (5). Because some states’ laws make purchas-

ing groups and risk retention groups illegal, the Act

contains express provisions that preempt such laws. This

appeal raises the question of whether, consistent with the

Act, the State of Iowa may require an insurance company

providing coverage to a purchasing group domiciled in

another state but having members in Iowa to be licensed

in Iowa.

In 1981, Congress enacted the Product Liability Risk

Retention Act, Pub. L. No. 97-45, 95 Stat. 949 (1981) (1981

Act). The 1981 Act was Congress’s response to the prob-

lems businesses had encountered in obtaining product

liability coverage. Premiums had increased dramatically,

and some businesses reportedly were unable to obtain

coverage at any price. The 1981 Act attempted to redress

the crisis by allowing businesses to purchase insurance at

more favorable rates either by forming self-insurance

pools called risk retention groups or by forming purchas-

ing groups, which purchase group insurance from an

existing insurer. Congress intended to reduce the cost and

increase the availability of product liability insurance and

to preempt certain state laws that prohibited or hindered

the formation of these groups.

The 1981 Act was amended by the Liability Risk

Retention Act of 1986, Pub. L. No. 99-563, 100 Stat. 3177

(1986), to expand the scope of the preemption to enabie

risk retention and purchasing groups to provide not only

product liability insurance but all types of liability insur-

ance. The 1986 Amendments also include provisions deal-

ing with the permissible scope of state regulation of risk

retention and purchasing groups.

This case involves the Ugly Duckling Rent-A-Car

System, Inc. Risk Purchasing Group, which is domiciled

in Arizona, and has members in lowa. Appellant Swanco

Insurance Company (Swanco) is a corporation chartered

and licensed in Arizona as a property casualty insurer,

with its principal place of business in Tucson. Swanco,

which is not licensed under Iowa law to issue insurance

in Iowa, insures the Ugly Duckling Purchasing Group.

On July 22, 1987, appellee William D. Hager, Com-

missioner of Insurance for the State of Iowa, scheduled a

hearing to determine whether Swanco was in violation of

the lowa Unauthorized Insurers Act for providing cover-

age to a purchasing group with members in lowa. Swanco

moved to dismiss the proceeding on the ground that the

Act preempts application of the Iowa statute to Swanco,

in that the Act required Swanco to be licensed only in the

state where the purchasing group is domiciled. After a

hearing examiner denied Swanco’s motion, Swanco filed

a complaint in the District Court seeking declaratory and

injunctive relief.

On cross-motions for summary judgment, the magis-

trate’ granted summary judgment in favor of the Com-

missioner on the ground that the Act does not preempt

the Commissioner’s authority to require an insurer pro-

viding coverage to purchasing group members in Iowa to

comply with lIowa’s licensing laws.?

Swanco appeals the magistrate’s decision, contend-

ing that the plain meaning of the term “located” in sec-

tion 4(f),> as well as the legislative history of that section,

make it clear that a purchasing group is “located” in only

one state, namely the state in which the group is domi-

ciled. Swanco further argues that the Act as so construed

preempts lowa from requiring Swanco to be licensed in

lowa. Although we conclude that Swanco’s reading of

“located” in section 4(f) is correct, we nevertheless con-

clude that neither section 4(f) nor any other provision of

the Act preempts states from applying licensing require-

ments that do not directly conflict with the express pre-

emption provisions in section 4(a). Accordingly, we

affirm.

' The parties consented pursuant to 28 U.S.C. § 636(c) to

proceed before the Honorable Ronald E. Longstaff, United

States Magistrate for the Southern District of lowa.

2 Magistrate Longstaff did not issue a full opinion in this

case, but instead incorporated by reference his order in Frontier

Insurance Co. v. Hager, No. 87-645-E (S.D. lowa April 27, 1988),

a case involving virtually identical facts and issues.

3-15 U.S.C. § 3903(f), which provides in part: “A purchas-

ing group may not purchase insurance . . . 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 regula-

tions of such State.”

Il.

We consider first the meaning to be given to the

phrase “the State in which the purchasing group is

located,’ in section 4(f) of the Act, the pertinent part of

which is set forth in the margin of this opinion at footnote

The Commissioner contends that a purchasing group

is “located” wherever the group has members, and there-

fore section 4(f) requires an insurer providing coverage to

a purchasing group to be licensed (or an eligible surplus

lines carrier)* in each state where the group has members.

Swanco contends that section 4{f) requires the insurer to

be licensed only in its state of domicile.

Based upon our reading of the Act, we conclude that

Swanco’s position is correct. We think it is significant that

section 4(f) uses the term “the State” in the singular. It

does not refer to “the States” or to “every State” in which

the purchasing group is located, nor does it refer to “a

State,” a form which could be construed to mean multiple

states. Furthermore, section 4(f) refers only to the location

of “the purchasing group,” and not the location of its

“members.” Other sections of the Act refer separately to

* Most states allow insurers meeting certain capital

requirements to do business as a surplus line carrier. A surplus

line carrier is required to file, among other things, a financial

statement with the state's commissioner. The process of gain-

ing authority to do business as a surplus line carrier is more

expeditious than the process of becoming fully licensed, and

normally does not involve the review of rates. A surplus line

carrier is not considered to be an admitted insurer, but rather

does business with the approval of the commissioner.

—s

“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. We therefore conclude that “the pur-

chasing group” language of section 4(f) is not to be read

as encompassing members of the group.

This conclusion — that section 4(f) refers to a single

state — requires us to identify that state or, more precisely,

to determine the statutory test for identifying the “state

in which the purchasing group is located.” Basing the

state of location on the group’s highest premium volume,

or where the most members reside, or the state which has

the greatest interest in the purchasing group’s activities,

would be problematic because these factors may not be

easily ascertainable and may change over time. That is

not to say that Congress could not have decided to base

“location” on one of these factors. We do not believe,

however, that Congress intended to do so, for it chose to

gear other sections of the Act to the purchasing group's

domicile. See 15 U.S.C. § 3901(a) (5) (D) (requiring that a

purchasing group be domiciled in a state); 15 U.S.C.

§ 3903(d) (1) (A) (requiring a purchasing group to give

notice of the group’s state of domicile to a state in which

it plans to do business). Further, the Act allows risk

retention groups to declare the state in which the group

will be chartered. See 15 U.S.C. § 3901(a) (4) (C) (i).

Though the statute is not a model of clarity, we conclude

that the state of location referred to in section 4(f) is the

state in which the purchasing group is domiciled. Since in

the present case the purchasing group is domiciled in

Arizona, section 4(f) requires the insurer (Swanco) to be

admitted only in Arizona, not in all the various states,

~—e

including lowa, in which the purchasing group has mem-

bers. Accordingly, we reject the Commissioner's argu-

ment that section 4(f) requires insurers to be licensed in

every state in which a group has members.

Il.

Our conclusion that section 4(f) requires the insurer

to be licensed (or an eligible surplus lines carrier) in only

the purchasing group’s state of domicile does not end our

analysis. The question remains whether Congress

intended to exempt insurers of purchasing groups from

the licensing and regulatory laws of nondomiciliary

states. The Commissioner contends that under the read-

ing of the Act that we have adopted in Part Il of this

opinion, section 4(f) should be viewed as a minimum

federal requirement leaving nondomiciliary states free to

enforce their licensing laws and regulations to the extent

they are not inconsistent with the Act. Swanco counters

that Congress, by enacting section 4(f), has preempted

nondomiciliary states from regulating insurers of pur-

chasing groups.

Preemption occurs when Congress, in enacting a stat-

ute, expresses a clear and manifest intent to preempt state

law, Jones v. Rath Packing Co., 430 U.S. 519, 525 (1977);

when there is an outright conflict between the federal law

and state law, Free v. Bland, 369 U.S. 663, 666 (1962);

where Congress has legislated comprehensively, thus

occupying the field so as to leave no room for the states

to supplement federal law, Rice v. Sante Fe Elevator Corp.,

331 U.S. 218, 230 (1947); or where state law stands as an

obstacle to the execution of the federal law passed by

Congress, Chicago & North Western Transportation Co. v.

Kalo Brick & Tile Co., 450 U.S. 311, 317 (1981). We begin

our analysis with the well-established presumption

against imputing to Congress an intention to preempt an

area that traditionally has been left to state regulation. See

Wisconsin Educ. Ass'n Ins. Trust v. Iowa State Bd. of Pub.

Instruction, 804 F.2d 1059, 1064 (8th Cir. 1986) (citing Jones

v. Rath Packing Co., 430 U.S. at 525).5

5 In United States v. South-Eastern Underwriters Association,

322 U.S. 533 (1944), the Supreme Court held that insurance was

commerce and therefore subject to the federal antitrust laws. In

response to South-Eastern, Congress in 1945 passed the McCar-

ran-Ferguson Act, which largely exempts the business of insur-

ance from the federal antitrust laws and states in part:

Congress declares that the continued regulation and

taxation by the several States of the business of

insurance is in the public interest, and that silence on

the part of the Congress shall not be construed to

impose any barrier to the regulation or taxation of

such business by the several States.

15 U.S.C. § 1011. The McCarran-Ferguson Act further provides:

(a) The business of insurance, and every person

engaged therein, shall be subject to the laws of the

several States which relate to the regulation or taxa-

tion of such business.

(b) No Act of Congress shall be construed to invali-

date, impair, or supersede any law enacted by any

State for the purpose of regulating the business of

insurance, or which imposes a fee or tax upon such

business, unless such Act specifically relates to the

business of insurance. .

15 U.S.C. § 1012(a), (b).

It is undisputed that insurance is an area that tradi-

tionally has been ieft to state regulation. It also is undis-

puted that Congress intended the Act to preempt certain

state laws that prohibited or hindered the formation of

purchasing groups. The question then is whether the

Iowa law requiring Swanco to be licensed in Iowa is

preempted by section 4(f). In other words, does the Act

overcome the presumption against preemption? Our task

is to determine whether Congress plainly has demon-

strated its intent that section 4(f) should have preemptive

effect. To make this determination, we must look to the

language and structure of the Act.

The Act creates two distinct alternatives, self-insur-

ance by risk retention groups and group purchase of

insurance by purchasing groups. Congress considered

but rejected the creation of a comprehensive federal regu-

latory scheme for purchasing and risk retention groups.

See H.R. Rep. No. 190, 97th Cong., 1st Sess. 6-7, reprinted

in 1981 U.S. Code Cong. & Admin. News 1432, 1435; see

also Home Warranty Corp. v. Caldwell, 777 F.2d 1455,

1471-72 (11th Cir. 1985), cert. denied, 479 U.S. 852 (1986).

Instead, Congress created separate and distinct preemp-

tion schemes for the two groups. “These carefully drafted

provisions were designed to provide a ‘workable legal

framework’ balancing the traditional authority of the

states and the need for purchasing groups to ameliorate

the liability insurance crisis.” Insurance Co. of State of

Pennsylvania v. Corcoran, 850 F.2d 88, 91 (2d Cir. 1988)

(citing H.R. Rep. No. 865, 99th Cong., Ist Sess. at 21).

Section 3 of the Act allows groups with similar types

of risk to form and own their own insurance company to

insure against their liability exposures. The risk retention

10a

group is chartered in the group’s state of domicile and

this state is primarily responsible for the group’s regula-

tion. See 15 U.S.C. § 3902(a) (1). The authority of non-

domiciliary states is largely preempted. Section 3(a) (1)

preempts “any State law, rule, regulation, or order to the

extent that such law, rule, regulation, or order would -

make unlawful, or regulate, directly or indirectly, the

operation of a risk retention group.” (emphasis added).

The Act specifically enumerates the exceptions to this

broad preemption. See 15 U.S.C. § 3902(a) (1) (A)-(D

(among the powers reserved to nondomiciliary states are

the authority_to tax business written in the nondomicili-

ary state, to require compliance with the nondomiciliary

state’s unfair claims and deceptive trade practices laws,

and to require policies issued by risk retention groups to

give notice that the nondomiciliary state’s insurance laws

and state guarantee funds might not apply). Thus, aside

from the specific powers reserved to nonchartering states,

the Act prohibits those states from regulating risk reten-

tion groups.®

The Act’s approach to purchasing groups is quite

different. Unlike section 3, which broadly preempts state

law while enumerating specific laws that the state may

enforce, section 4 expressly preempts only a limited

6 See Home Warranty Corp. v. Caldwell, 777 F.2d 1455, 1471

(11th Cir. 1985) (risk retention groups are exempted from state

regulation of insurance companies because they are not in the

business of selling insurance to the public.).

lla

number of specific state laws.” Nothing in the 1986

Amendments, which expanded the applicability of the

1981 Act to all forms of liability insurance, undermines

? Section 4(a) preempts:

;

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 provid-

ing, 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 own-

ership or affiliation, or a certain legal forum;

(6) require that a certain percentage of a pur-

chasing 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.

15 U.S.C. § 3903(a).

12a

the preemption structure developed by the 1981 Act.§ The

statutory meaning is clearly manifested in section 4(g),

which states: “[nlothing 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.” 15 U.S.C. § 3903(g).

The language and structure of the Act thus strongly

support the Commissioner’s position that section 4(f)

does not preempt a nondomiciliary state from imposing

its licensing requirements upon insurers who wish to sell

to purchasing group members in that state.

Swanco maintains that Congress intended to free

purchasing groups and their insurers from multiple and

inconsistent state regulations, and that allowing states to

enforce their licensing laws defeats the purpose of the

8 This conclusion, which is based upon our reading of the

plain language of the 1981 Act and the 1986 Amendments, is

fully supported by the House Report on the 1986 Amendments.

As the House Report states:

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. Those laws were listed in Section

4(a) of the 1981 Act and it is those laws that are

preempted. Subject to the prohibition on discrimina-

tion against purchasing groups, the states remained

able to apply all their other laws to purchasing

groups and those dealing with such groups. This

approach is carried forward into the 1986 Act. There-

fore, the Committee did not consider it necessary to

itemize all the other laws to which purchasing

groups remain subject.

H.R. Rep. No. 865, 99th Cong., 2d Sess. at 19 (emphasis added).

Nishi ccm. °

13a

Act.? Although Swanco may be correct in stating that

total preemption of nondomiciliary state regulation

would enhance the ability of purchasing groups to oper-

ate, our reading of the statute does not permit us to

accept Swanco’s conclusion that the Act must be given a

broad preemptive effect. Section 4(a) specifically pre-

empts certain state laws. Except for those explicitly pre-

empted laws, the Act leaves the states free to apply their

laws in a nondiscriminatory manner.!° Instead of total

9 We note that the Secretary of Commerce has interpreted

section 4(f) as preempting nondomiciliary states from regulat-

ing insurers of purchasing groups. See U.S. Dep’t of Commerce,

Liability Risk Retention Act of 1986: Implementation Report, Sept.

1987. We recognize that an agency’s interpretation of a statute

it is charged to administer is to be given deference. However,

such deference is not warranted here. The Commerce Depart-

ment is not charged with administering the Act, but merely has

responsibility under the Act to report on its implementation. In

any event, the Secretary’s interpretation of section 4(f) is based

on the Secretary’s reading of the Act and legislative history, an

exercise the Supreme Court has called a “quintessential judicial

function.” Bureau of Alcohol, Tobacco and Firearms v. Federal Labor

Relations Auth., 464 U.S. 89, 98 n.8 (1983). Although the

agency’s interpretation may be influential, it cannot bind this

Court. “Reviewing courts cannot, in any case, be bound by a

Statutory interpretation they believe to be an aberration of

Congress’ intent. . . . The Secretary’s interpretation of [Section

4(f)] is exactly such an interpretation. It cannot stand in the

light of our examination of the language and legislative history

of the Act... .” Hall v. Lyng, 828 F.2d 428, 435 (8th Cir. 1987).

10 Allowing nondomiciliary states to enforce their licens-

ing and regulatory laws not preempted by section 4(a) burdens

an insurer of a purchasing group no more than any other

insurer desiring to market its policies in several states.

l4a

preemption, Congress “selected particularized means to

{an] end in-conscious recognition that a considerable area

of state regulation would remain intact.” Corcoran, 850

F.2d at 93 (rejecting insurer’s argument that Congress

intended wholesale preemption for purchasing groups).

Swanco’s position is at odds with the statutory scheme

and thus cannot prevail."

IV.

In conclusion, we affirm the magistrate’s grant of

summary judgment in favor of the Commissioner on the

ground that lowa is not preempted under the Act from

requiring Swanco to comply with lIowa’s licensing

requirements.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.

11 Swanco also argues that Section 515E.9 of the lowa

Insurance Code, lowa Code Ann. § 515E.9 (West Supp. 1989),

which was enacted during the pendency of this appeal, under-

mines the Commissioner’s position. We decline to address this

issue since it is raised for the first time on appeal. Because it

involves the interpretation of state law, it is especially appro-

priate that it be addressed initially at the trial court level.

APPENDIX B

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF IOWA

CENTRAL DIVISION

UNITED INTERNATIONAL

INSURANCE COMPANY OF

WARWICK, R.L., CIVIL NO.

et al., 87-707-E

Plaintiffs, ORDER

WILLIAM D. HAGER,

Commissioner of

Insurance of the

)

vs. )

)

State of lowa, :

)

Defendant.

This matter came before the Court upon the Motion

for Summary Judgment filed by plaintiffs, United Inter-

national Insurance Company of Warwick, R.I., Swanco

Insurance Company - Arizona, and Fund Insurance Com-

pany, Ltd., on March 17, 1988. Defendants, William D.

Hager, Commissioner of Insurance of the State of Iowa,

and the Insurance Department of the Department of

Commerce of the State of Iowa, filed a Resistance to

Plaintiff's Motion for Summary Judgment and a Cross-

Motion for Summary Judgment! on March 22, 1988. Plain-

tiffs filed a Reply Brief in Support of Motion for Summary

' Defendants failed to file a formal Cross-Motion for Sum-

mary Judgment. The Court will, however, accept defendants’

Memorandum in Support of Defendants’ Resistance to Motion

for Summary Judgment and Cross-Motion for Summary Judg-

ment as an adequate substitute.

Judgment on April 18, 1988. Defendants filed a Reply

Memorandum to Plaintiffs’ Resistance to Defendants’

Cross-Motion for Summary Judgment on May 4, 1988.

The parties consented to proceed before the under-

signed United States Magistrate pursuant to 28 U.S.C.

§ 636(a) on May 3, 1988, and this lawsuit was referred on

that same date. On May 11, 1988, plaintiff United Interna-

tional Insurance Company of Warwick, R.I., voluntarily

dismissed without prejudice its cause of action in the

above-captioned lawsuit. With regard to the remaining

. parties, the matters raised in plaintiffs’ and defendants’

motions are fully submitted to this Court.

1. FACTUAL DISCUSSION

This lawsuit commenced when plaintiffs filed a com-

plaint for declaratory, injunctive, and other relief on Sep-

tember 24, 1987. Plaintiffs, Swanco Insurance Company -

Arizona (Swanco) and Fund Insurance Company, Ltd.

(FIC), provide group liability insurance to several pur-

chasing groups that have Iowa members. Swanco is an

Arizona Corporation, chartered and licensed as a prop-

erty-casualty insurer, with its principal place of business

located in Tucson, Arizona. FIC is a Bermuda Corpora-

tion, chartered and licensed as a property-casualty

insurer, with its principal place of business located in

Hamilton, Bermuda. Neither Swanco nor FIC is admitted

or approved under Iowa law to issue insurance in Iowa.

By Notice of Hearing, dated July 22, 1987, defendant

William D. Hager (Hager) notified plaintiffs that a hear-

ing was set for September 8, 1987, to determine whether

these insurers had acted in violation of the insurance

laws of lowa. Specifically, the notice alleges that plaintiffs

had engaged in the unauthorized sale of insurance in the

state of Iowa in violation of the Unauthorized Insurers

Act, lowa Code § 507A (1987).

On September 4, 1987, plaintiffs filed a Joint Motion

to Dismiss for Lack of Subject Matter Jurisdiction on the

ground that the Liability Risk Retention Act, 15 U.S.C.

§ 3901 et al., preempted Hager’s authority as Commis-

sioner to apply the lowa Unauthorized Insurers Act to

plaintiffs. The hearing set for September 8, 1987, was

stayed indefinitely. Plaintiffs’ motion was denied by the

hearing examiner on September 11, 1987. Plaintiffs were

provided until October 14, 1987, to appeal the examiner's

decision to Commissioner Hager. Believing that Hager

would sustain the ruling, plaintiffs filed this lawsuit

rather than exhausting their administrative remedies.

II. DISCUSSION OF APPLICABLE LAW

On April 27, 1988, this Court entered an Order in

Frontier Insurance Company, Inc. v. Hager, Civ. No. 87-645-

E. Based on facts and issues virtually identical? to those

in this lawsuit, an insurance company providing group

liability insurance to purchasing groups which have lowa

members brought a declaratory action against Commis-

sioner Hager. The Court granted summary judgment in

favor of defendant Insurance Commissioner for the State

of Iowa. Essentially, the Court found that the Liability

Risk Retention Act did not preempt state insurance laws

2 Plaintiffs acknowledged this in the Motion to Consoli-

date Separate Actions, filed March 17, 1988.

regulating the operation of purchasing groups doing

business in that state. The Court has attached a copy of its

opinion in Frontier.

Ill. CONCLUSION

Insofar as the same issues of preemption are involved

in the instant case, the Court finds in favor of defendants

Hager and the Insurance Department for the reasons

stated in its Order in Frontier Insurance Company, Inc. v.

Hager, Civ. No. 87-645-E, filed April 27, 1988.

Dated this 15th day of June, 1988.

/s/ R. E. Longstaff

R. E. LONGSTAFF

U.S. MAGISTRATE

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF IOWA

CENTRAL DIVISION

FRONTIER INSURANCE

COMPANY, INC.,

et al., CIVIL NO.

87-645-E

ORDER

Plaintiffs,

vs.

)

WILLIAM D. HAGER, ‘

COMMISSIONER OF )

INSURANCE )

OF THE STATE )

OF IOWA, )

)

Defendant.

This matter came before the Court upon the Motion

for Summary Judgment filed by plaintiffs, Frontier

ee ee eee

Insurance Company, Inc., et al., on January 20, 1988.

Defendant, William D. Hager, Commissioner of Insurance

of the State of Iowa, filed his Resistance to Motion for

Summary Judgment and Cross-Motion for Summary

Judgment on January 26, 1988. Plaintiffs filed Resistance

to defendant’s Cross-Motion for Summary Judgment on

February 22, 1988. A hearing on the motions was held on

March 10, 1988. Plaintiffs were represented by Bruce

Foudree, and defendant by Fred Haskins. A supplement

was filed by plaintiffs on March 11, 1988.

The parties consented to proceed before the under-

signed United States Magistrate pursuant to 28 U.S.C.

§ 636(a) on January 22, 1988, and this lawsuit was

referred on that same date. The matters raised in plain-

tiffs’ and defendant’s motions therefore may be deter-

mined by the Court at this time.

I. BACKGROUND

This lawsuit commenced when plaintiffs filed a com-

plaint and petition for declaratory relief on September 9,

1987. Plaintiffs are Frontier Insurance Company, Inc.

(Frontier), and six purchasing groups formed pursuant to

the Liability Risk Retention Amendment of 1986, 15

U.S.C. § 3901-06 (1986 Amendment): National Purchasing

Group for Sexual Abuse, Molestation and Exploitation,

North American Horse Association, Inc., American Physi-

cians Purchasing Group, American Dental Purchasing

Group, American Part-Time Physicians Purchasing

Group, and American Internists Purchasing Group. Fron-

tier is licensed in the District of Columbia and the state of

New York. Plaintiff purchasing groups are all domiciled

in the District of Columbia. Defendant is William Hager,

the Commissioner of Insurance of the State of lowa. Juris-

diction exists under 28 U.S.C. § 1331.

Between April 27, 1987, and June 2, 1987, each plain-

tiff purchasing group filed to operate as such with the

lowa Division of Insurance and named plaintiff Frontier

as their insurer-for liability coverage. A purchasing group

is defined under the 1986 Amendment as any group

which:

(A) has as one of its purposes the purchase of lia-

bility insurance on a group basis;

(B) purchases such insurance only for its group

members and only to cover their similar or

related liability exposure, as described in sub-

paragraph (C);

activities are similar or related with respect to

the liability to which members are exposed by

virtue of any related, similar, or common busi-

ness, trade, product, services, premises, or oper-

ations; and

(D) is domiciled in any State.

15 U.S.C. § 3901(a) (5).

A Notice of Hearing before the Insurance Division of

the State of lowa was filed by Defendant on July 22, 1987,

alleging that Frontier was not an authorized insurance

company in the State of lowa and that Frontier, through

the purchasing groups, was engaged in the unauthorized

sale of insurance in Iowa in violation of Chapter 507A,

Unauthorized Insurers Act, lowa Code (1987).

— ait 6. lied,

Ch MEO A men eal aan ances Eo wh ee ine

ere

A. Focus of the Controversy

The main issue in this controversy centers around

§ 3903(f) of the 1986 Amendment providing that:

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 affected through a

licensed agent or broker acting a to the

surplus lines and regulations of such State.

15 U.S.C. § 3903(f) (emphasis added).

The specific language of this section that requires

interpretation is “... from an insurer not admitted in the

State where the purchasing group is located . . . .” Plain-

tiffs contend that the insurer for a purchasing group need

only be licensed in the state where the purchasing group

itself is domiciled. Since the purchasing groups are domi-

ciled in the District of Columbia, and Frontier is licensed

in the District of Columbia, plaintiffs maintain that Fron-

tier has met the licensing requirements of 15 U.S.C.

§ 3903(f). Consequently, Frontier is not required to be an

authorized insurer in lowa in order to offer and issue

liability insurance coverage to Iowa residents who are

members of the purchasing groups.

Defendant, on the other hand, interprets a purchas-

ing group as being located wherever its individual mem-

bers are located. This means that the insurer for the

purchasing group must be licensed in all of the states

where purchasing group members reside. Defendant con-

tends that if Frontier desires to cover lowa residents of

the plaintiff purchasing groups, then Frontier must be

admitted as a regular or surplus lines carrier in the State

of Iowa.

B. Historical Context

The McCarran-Ferguson Act, enacted in 1945, states:

Congress hereby declares that the continued

regulation and taxation by the several States of

the business of insurance is in the public inter-

est, and that silence on the part of the Congress

should not be construed to impose any barrier

to the regulation or taxation of such business by

the several States.

15 U.S.C. § 1011.

The primary legislative purpose of the McCarran-

Ferguson Act was to reaffirm the individual states’ power

to regulate insurance and to ensure that state regulatory

schemes would not be impaired and overridden except

by specific Congressional enactments. Hamilton Life Insur-

ance Co. v. Republic National Life Insurance Co., 291 F. Supp.

225, 230 (S.D.N.Y. 1968).! The Supreme Court stated

' In United States v. South-Eastern Underwriters Association,

322 U.S. 533 (1944), the Supreme Court decided that the busi-

ness of insurance was commerce and therefore subject to fed-

eral regulatory legislation, specifically the anti-trust laws.

South-Eastern Underwriters reversed the pre-existing rule that

the business of insurance was not commerce and hence subject

to only state regulation. See Paul v. Virginia, 75 U.S. 168 (1868).

In order to allay any doubts that the South-Eastern Underwriters

decision would impair the continuing power of the states to tax

and regulate the business of insurance, Congress passed the

McCarran-Ferguson Act.

~ 9b

shortly after the enactment of the McCarran-Ferguson

Act that “obviously Congress’ purpose was broadly to

give support to the existing and future state systems for

regulating and taxing the business of insurance.” Pruden-

tial Insurance Co. v. Benjamin, 328 U.S. 408, 429 (1946).

In 1981, Congress passed the Product Liability Risk

Retention Act, 15 U.S.C. § 3901-3906 (1982). This act was

premised on an 18-month study by the Federal Inter-

agency Taskforce on Product Liability which analyzed the

causes of the severe premium increases in the product

liability insurance market and, in many cases, the

unavailability of such coverage. H.R. Rep. No. 190, 97th

Cong., Ist Sess. 4, reprinted in 1981 U.S. Code Cong. &

Admin. News, 1432, 1432-33 (1981 Act). The 1981 Act

sought to address the product liability problem in two

ways. First, it permitted product manufacturers, sellers

and distributors to form their own insurance coopera-

tives, known as “risk retention groups,” which were

intended to assume all or a portion of their product

liability and completed operations risk exposure. Second,

the 1981 Act enabled such businesses to purchased prod-

uct liability insurance on a group basis.

In enacting this legislation, Congress recognized the

difficulties for insurers in complying with the varying

and conflicting laws of the many states in which they

desired to do business. In addition, since many states

prohibited the collective merchandising of property and

casualty insurance, including product liability and com-

pleted operations insurance, provisions of the 1981 Act

expressly provided for federal pre-emption of those state

laws that prohibited, restricted, or inhibited the operation

of risk retention groups or purchasing groups.

10b

In the early 1980’s, the problems encountered in the

products liability sphere spread to other kinds of liability

insurance coverage. Both individuals and businesses

experienced problems with meeting the costs of liability

coverage. Consequently, the 1981 Act was amended in

1986 to expand the scope of federal pre-emption to enable |

risk retention groups and purchasing groups to provide |

not only product liability insurance but all types of lia- .

bility insurance. As indicated previously, the 1986

Amendment provides the focus for the present litigation.

II. DISCUSSION OF APPLICABLE LAW

A. Summary Judgment

Federal Rule of Civil Procedure 56(c) provides that

summary judgment may be rendered in a case “if the

pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any,

show that there is no genuine issue as to any material fact

and that the moving party is entitled to a judgment as a

matter of law.” Fed. R. Civ. P. 56(c). In a recent Supreme

Court decision which interpreted this rule, the Court

stated that “summary judgment is properly regarded not

as a disfavored procedural shortcut, but rather as an

integral part of the Federal Rules as a whole, which are

designed to secure the just, speedy, and inexpensive

determination of every issue.” Celotex Corp. v. Catrett, 477

U.S. 317, 327 (1986) (citations omitted). Summary judg-

ment is also an appropriate mechanism for disposing of

legal questions, Mobil Oil Corp. v. FEA, 566 F.2d 87, 92

(Temp. Emer. Ct. App. 1977), and “where a decision turns

on the meaning of the words in a statute... , a legal

i ON TOO FST A

lib

question is presented for the court to decide.” Interna-

tional Society for Krishna Consciousness v. Rochford, 425 F.

Supp. 734, 738 (N.D. Ill. 1977). There is no genuine issue

of material fact in this case. The decision hinges, rather,

on the legal question regarding the interpretation of the

word “located” in 15 U.S.C. § 3903(f). This matter may

properly be resolved in a summary judgment proceeding.

B. Statutory Interpretation

Because the question presented in this hearing

involves the interpretation of a recently enacted statutory

amendment, there is little case law relating to this matter.

Thus, the Court must utilize the traditional signposts for

cases of first impression of statutory construction, the

language of the statute itself and the statute’s legislative

history. United States v. Gray, 809 F.2d 579, 582 (9th Cir.

1987).

1. Construction of Statutory Language

The 1986 Amendment provides that an insurer must

be licensed in “the state” in which the purchasing group

is located unless it uses a surplus lines agent in “such

state.” 15 U.S.C. § 3903(f). Plaintiffs contend that the use

of the words “the state” and “such state” can only be

interpreted to mean one location, thus one state. They

further cite the language in 15 U.S.C. § 3903(d) which

provides that, in its notice to a state where it intends to

do business, a purchasing group should identify “the

12b

state” in which such group is domiciled. Since the pur-

chasing group-can only be domiciled in one state, plain-

tiffs urge that a singular construction of the “the state”

and “such state” in the domiciled phrase parallels a sin-

gular interpretation of “the state” and “such state” in the

located phrase at issue.

Defendant, however, is able to make the same argu-

ment in favor of his position. The terms “the state” and

“such state” could just as easily be indicative of the plural

as of the singular if “located” is interpreted to mean all of

the residences of the particular members of the purchas-

ing group. Each member may have only one location, but

there are multiple members.

Plaintiffs also contend that the separate use of “doing |

business” and “is located” in the 1986 Amendment indi-

cates that Congress intended these terms to have different

meanings. If the phrase “is located” was intended to refer

to multiple states, Congress would have used the term

“doing business.” Plaintiffs base this argument on the

premise that where different language is used in different

parts of a statute, it is presumed that the language is used

with a different intent. 73 Am. Jur. 2d Statutes § 235

(1974).

This same argument, however, may also be used to

support defendant’s contention. Defendant argues that

Congress used the different terms, “domiciled”,

“located,” and “principal place of business,” because it

intended different interpretations of each. Under this

argument “located” does not necessarily mean that one

state in which the purchasing group is “located.” Indeed,

“located” could just as easily be interpreted to mean all of

13b

those states in which the individual members of the pur-

chasing group reside.

2. Case Law Interpreting “Located”

To interpret “located” under the 1986 amendment,

plaintiffs rely on the definition courts have accorded

“located” in interpreting the National Banking Act, 12

U.S.C. § 94 (NAB Act). The pertinent section of the NAB

Act provides that a suit may be instituted against a

national bank only in the district in which the bank is

established or in which it is located. Cope v. Anderson, 331

U.S. 461, 467 (1947) (“for jurisdictional purposes, a

national bank is a citizen of the state in which it is

established or located, and in that district alone it can be

sued”). “The overwhelming authority . . . supports the

proposition that a national bank does not become ‘estab-

lished’ or ‘located’ in any district where it may open or

operate a branch office.” United States National Bank v.

Hill, 434 F.2d 1019, 1020, (9th Cir. 1970).

Conversely, defendant cites to how the term

“located” is customarily used in the insurance trade.

Under property and casualty policies, located almost

always is associated with the situs of the risk. Howard

Foundry Co. v. Hartford Fire Insurance Co., 222 F.2d 767, 769

(7th Cir. 1955). Under this interpretation, the risks would

be situated where the individual members of the purchas-

ing group reside. Defendant additionally relies on estab-

lished principles of association law. An unincorporated

association, such as some of these purchasing groups, is

located where its members reside because it has no legal

existence apart from the members. 7 C.J.S. Associations § 3

14b

(1980). For purposes of diversity jurisdiction and venue

in an action against an unincorporated association, the

citizenship of the association is where the members res-

ide. Arbuthnot v. State Auto Insurance Association, 264 F.2d

260, 261 (10th Cir. 1959); 7 C.J.S. Associations § 45 (1980).

Defendant states that this result is the same in the case of

an incorporated association because the federal venue

statute provides that a corporation can be sued in any

district in which it is incorporated, or licensed to do

business, or doing business, and such judicial district

shall be regarded as the residence of such corporation. 28

U.S.C. § 1391(c).

3. Legislative Intent and History

Plaintiffs’ main argument revolves around the intent

of Congress and the underlying reasons for the enactment

of this legislation. In the 1980s, liability insurance in

many spheres had become extremely costly and difficult

to procure. Federal pre-emption of state laws restricting

the formation of risk retention groups and purchasing

groups as an alternative mechanism for obtaining cover-

age was necessary to alleviate this crisis. Plaintiffs main-

tain that Congress through the 1986 Amendment

intended to free purchasing groups and their insurers

from multiple and inconsistent state regulation. Requir-

ing these associations to be licensed in all states in which

they do business would defeat this objective.

General congressional intent, however, also supports

defendant’s construction. The 1986 Amendment

enhanced the original 1981 Act by providing the states

with improved ability to monitor and take action against

oe te

15b

abuses, and did not demonstrate a congressional intent to

leave the state without effective regulatory control of

purchasing groups. H.R. Rep. No. 865, 99th Cong., 2d

Sess. 17, reprinted in 1986 U.S. Code Cong. & Admin.

News 5303, 5314. Congress obviously continued to con-

sider licensure to be one way for states to prevent abuses.

A review of the legislative history of the 1986

Amendment does not definitively answer the question of

which interpretation of “located” Congress intended. Id.

One argument that would support defendant’s position

would be the wording used in the 1986 Amendment's

purpose and summary statement. In this statement, there

is a phrase that states, “with respect to risk retention

groups, the 1981 law contemplated that the state in which

the group was chartered would retain its authority to

regulate the group, while non-chartering states would

have more limited regulatory authority .... The current

legislation retains this distinction.” Id. This could be

interpreted to indicate that the 1986 Amendment is

intended to provide the states with increased authority

over the regulation of purchasing groups since the issue

of one-state regulation in the purpose and summary

statement deals specifically only with risk retention

groups. "

The legislative history does stress the fundamental

difference between the laws of the non-chartering states

that were pre-empted for risk retention groups and the

laws of the states that were pre-empted for purchasing

groups. Id. at 5315-5316. For risk retention groups, the

1986 Amendment states a broad exemption from the laws

of non-chartering states and then enumerates specifically

which powers were retained by these states. Id. The

16b

approach of the 1986 Amendment is different, however,

with respect to purchasing groups. Id. The 1986 Amend-

ment specifically recognizes a limited number of identi-

fiable states laws that prevented the establishment and

functioning of purchasing groups. Id. It is these laws that

are pre-empted. /d. Subject to these exceptions, the states

remain free to apply their other regulatory laws to pur-

chasing groups. Id.

However, because the bulk of the testimony at these

hearings dealt with risk retention groups instead of pur-

chasing groups, it is difficult to construe the breadth of

pre-emption of state laws relating to the latter entity to

the degree of absolute certainty.

C. Pre-emption Doctrine

Inherent in this controversy is the issue of whether

Congress, in enacting the 1986 Amendment, intended to

exempt purchasing group insurers from existing state

licensing requirements. The Supremacy Clause of Article

VI of the Constitution provides Congress with the power

to pre-empt state law. Pre-emption occurs when Con-

gress, in enacting a federal statute, expresses a clear

intent to pre-empt state law, Jones v. Rath Packing Co., 430

U.S. 519 (1977), when there is an outright conflict

between federal and state law, Free v. Bland, 369 U.S. 663

(1962), where Congress has legislated comprehensively,

thus occupying an entire field of regulation and leaving

no room for the States to supplement federal law, Rice v.

Sante Fe Elevator Corp., 331 U.S. 218 (1947), or where state

law stands as an obstacle to the accomplishment and

ate

execution of the full objectives of Congress, Hines v.

17b

Davidowitz, 312 U.S. 52 (1941).

A critical question in any pre-emption analysis is

whether Congress intended that federal regulation super-

cede state law. Limited pre-emption of state insurance

laws which regulate purchasing groups is found at 15

U.S.C. § 3903(a)(1)-(8). This section specifically enumer-

ates which laws of the states are pre-empted for purchas-

ing groups as follows:

(a)

(3)

(4)

(5)

Except as provided in this section and sec-

tion 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

prohibit the establishment of a purchasing

group;

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;

prohibit a purchasing group or its members

from purchasing insurance on a group basis

in paragraph (2) of this subsection;

prohibit a purchasing group from obtaining

insurance on a group basis because the

group has not been in existence for a mini-

mum period of time or because any mem-

ber has not belonged to the group for a

minimum period of time;

require that a purchasing group must have

a minimum number of members, common

18b

ownership or affiliation, or a certain legal

form;

(6) require that a certain percentage of a pur-

preg, Sad 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 purchas-

ing group or any of its members.

15 U.S.C. § 3903(a)(1)-(8). Significantly, none of the provi-

sions above explicitly exempt purchasing groups from

being licensed in the state where a purchasing group

member may reside.

There is no outright conflict between state and fed-

eral law in this case. The provisions of 15 U.S.C.

§ 3903(a)(1)-(8) simply state exemptions for purchasing

groups rather than defining any affirmative conditions

with which these groups must comply. These explicit

exemptions were aimed at specific state laws which pro-

hibited or severely hindered the operation of purchasing

groups. Requiring plaintiff Frontier to be licensed in lowa

before offering insurance coverage to lowa purchasing

group members does not conflict with these exemptions.

By enacting the McCarran-Ferguson Act, Congress

intended that the states maintain a long-standing tradi-

tion and retain the power for almost exclusive regulation

of the business of insurance. In the forty years since this

enactment, Congress has occupied only a limited role in

this field. Probably one of the most traditional means of

insurance regulation is by a state’s licensing of an insurer

19b

desiring to cover risks within the state. This licensing is

necessary as an important safeguard for a state's citizens.

lowa citizens covered by a carrier licensed in lowa have

the additional protection of the lowa Guaranty Fund

Coverage in the event the insurer becomes insolvent. This

protection would not be available if plaintiffs’ interpreta-

tion of located is adopted. Only the guaranty fund cover-

age of the District of Columbia or New York would be

available to persons insured by Frontier in the event of

Frontier’s insolvency. The absence of protection by the

Iowa Guaranty Fund concerns not only Iowa residents

who become members of purchasing groups covered by

non-admitted carriers but also could affect potential

claimants who might seek redress against lowa resident

members. Without licensing, these claimants are

unprotected by lowa’s guaranty fund.

The extent to which the 1986 Amendments pre-empt

state insurance laws regulating purchasing groups has

already been addressed by at least one court. In The

Insurance Company of the State of Pennsylvania, No. 87 Civ.

6118 FK)(S.D.N.Y. Sept. 24, 1987), plaintiff purchasing

group sought injunctive relief from a state law requiring

that it obtain prior approval of rates and insurance forms

from the New York Insurance Department. Plaintiff

argued that the requirement was a de facto prohibition of

purchasing groups and, therefore, was pre-empted by the

1986 Amendments. /d. slip op. at 4. Defendant countered

by stating that there was no express pre-emption to the

New York law. Indeed, “Congress intended to permit

state regulation of purchasing group policies.” Id. The

Court, in granting defendant's motion for summary judg-

ment, stated:

20b

In the case at bar, although the Act certaining

(sic) relates to the business of insurance, the

exemptions in § 3903 do net specifically indicate

that congress wished to supercede state regula-

tion of rates and forms of purchasing group

policies. It is significant that the New York rate

and form requirements do not prohibit or make

unlawful the purchasing group policies offered

by State of Pennsylvania, but only provide a

mechanism by which the state can supervise

such policies.

Id. slip op. at 4-5.

Allowing states in which purchasing group members

are located to require licensing does not stand as an

obstacle to the accomplishment and execution of the full

objectives of Congress. While Congress wanted to facili-

tate the formation and operation of purchasing groups,

Congress did not divest the states of all their regulatory

powers. The 1986 Amendment specifically recognized

that a limited number of identifiable state laws prevented

the establishment and functioning of purchasing groups.

These laws were pre-empted. Subject to these exceptions,

Congress explicitly intended that the states would be free

to regulate purchasing groups and their insurers. This

intention was clearly manifested in the language of 15

U.S.C. § 3903(g):

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.

The principle to be derived from the Supreme Court

decisions regarding pre-emption is that federal regulation

of a field of commerce should not be deemed pre-emptive

Al te ce 5 lll, ly city

—- = enw

21b

of state regulatory power in the absence of persuasive

reasons — either that the nature of the regulated subject

matter permits no other conclusion, or that the Congress

has unmistakably so ordained. Flonda Lime & Avocado

Growers, Inc. v. Paul, 373 U.S. 132, 142 (1963). Neither

situation exists here.

Ill. CONCLUSION

After considering all arguments advanced by the par-

ties, plaintiffs’ Motion for Summary Judgment is denied

and defendant’s Motion for Summary Judgment is

granted. The Clerk shall enter judgment accordingly.

Dated this 27th day of April, 1988.

/s/ RE Longstaff

R. E. LONGSTAFF

U.S. MAGISTRATE

APPENDIX C

ARTICLE. VI.

All Debts contracted and Engagements entered into,

before the Adoption of this Constitution, shall be as valid

against the United States under this Constitution, as

under the Confederation.

This Constitution, and the Laws of the United States

which shall be made in Pursuance thereof; and all

Treaties made, or which shall be made, under the Author-

ity of the United States, shall be the supreme Law of the

Land; and the Judges in every Staie shall be bound

thereby, any Thing in the Constitution or Laws of any

State to the Contrary notwithstanding.

The Senators and Representatives before mentioned,

and the Members of the several State Legislatures, and all

executive and judicial Officers, both of the United States

and of the several States, shall be bound by Oath or

Affirmation, to support this Constitution; but no religious

Test shall ever be required as a Qualification to any Office

or public Trust under the United States.

APPENDIX D

4-21-87

20,101

[720,101]

RISK RETENTION ACT

15 U.S.C. §§3901-3906 (1987 Supp.) ;

CHAPTER 65 - PRODUCT LIABILITY

RISK RETENTION

Sec.

3901. Definitions

3902. Risk retention groups.

3903. Purchasing groups.

3904. Securities laws.

3905. Permissible state authority.

3906. Injunctive orders.

Short Title

This act may be cited as the “Liability Risk Retention

Act of 1986,” as amended by Public Law 99-563, 100 Stat.

3170, approved and effective October 27, 1986.

§ 3901. Definitions

(a) As used in this chapter -

(1) “insurance” means primary insurance, excess

insurance, reinsurance, surplus lines insurance, and any

other arrangement for shifting and distributing risk

which is determined to be insurance under applicable

State or Federal law;

(2) “liability” -

(A) 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 -

(i) any business (whether profit or nonprofit),

trade, product, services (including professional ser-

vices), premises, or operations, or

(ii) any activity of any State or local govern-

ment, or any agency or political subdivision thereof;

and

(B) 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.S.C. 51 seq.);

(3) “personal risk liability” means liability for dam-

ages 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 para-

graphs (2)(A) and (2)(B);

(4) “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;

(B) which is organized for the primary purpose of

conducting the activity described under subparagraph

(A);

(i) is chartered or licensed as a liability insur-

ance company under the laws of a State and autho-

rized 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 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 (as such terms were defined in

this section before the date of the enactment of the

Risk Retention Act of 1986);

(D) which does not exclude any person from mem-

bership in the group solely to provide for members of

such a group a competitive advantage over such a person;

(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

(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; C

(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, ser-

vices, premises, or operations;

(G) whose activities do not include the provision of

insurance other than -

(i) liability insurance for assuming and spread-

ing all or any portion of the similar or related liability

exposure of its group members; and

(ii) reinsurance with respect to the similar or

related liability exposure of any other risk retention

group (or any member of such other group) which is

engaged in businesses or activities so that such group

(or member) meets the requirement described in sub-

paragraph (F) for membership in the risk retention

group which provides such reinsurance; and

(H) the name of which includes the phrase “Risk

Retention Group”.

(5) “purchasing group” means any group which -

(A) has as one of its purposes the purchase of lia-

bility insurance on a group basis;

(B) purchases such insurance only for its group

members and only to cover their similar or related lia-

bility exposure, as described in subparagraph (C);

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

(D) is domiciled in any State;

(6) “State” means any State of the United States or

the District of Columbia; and

(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.

(b) Nothing in this chapter shall be construed to affect

either the tort law or the law governing the interpretation

of insurance contracts of any State, and the definitions of

liability, personal risk liability, and insurance under any

State law shall not be applied for the purposes of this

chapter, including recognition or qualification or risk

retention groups of purchasing groups.

Short Title

Section 12(a) of Pub.L. 99-563 provided that

“This Act may be cited as the ‘Liability Risk Reten-

tion Act of 1986’.”

§ 3902. Risk retention groups

(a) Except as provided in this section, risk retention

group is exempt from any State law, rule, regulation, or

order to the extent that such law, rule, regulation, or

order would -

(1) make unlawful, or regulate, directly or indi-

rectly, the operation of a risk retention group except that

the jurisdiction in which it is chartered may regulate the

formation and operation of such a group and any State

may require such a group to -

(A) comply with the unfair claim settlement prac-

tices law of the State;

(B) pay, on a nondiscriminatory basis, applicable

premium and other taxes which are levied on admitted

insurers and surplus lines insurers, brokers, or policy

holders under the laws of the State;

mechanism established or authorized under the law of

the State for the equitable apportionment among insurers

of liability insurance losses and expenses incurred on

policies written through such mechanism;

(D) register with and designate the State insurance

commissioner as its agent solely for the purpose of

receiving service of legal documents or process;

(E) submit to an examination by the State insurance

commissioners in any State in which the group is doing

business to determine the group’s financial condition, if -

(i) the commissioner of the jurisdiction in

which the group is chartered has not begun or has

refused to initiate an examination of the group; and

(ii) any such examination shall be coordinated

to avoid unjustified duplication and unjustified

repetition;

(F) comply with a lawful order issued -

(i) in a delinquency proceeding commenced by

the State insurance commissioner if there has been a

finding of financial impairment under subparagraph

(E); or

(ii) in a voluntary dissolution proceeding;

(G) comply with any State law regarding deceptive,

false, or fraudulent acts or practices, except that if the

State seeks an injunction regarding the conduct described

in this subparagraph, such injunction must be obtained

from a court of competent jurisdiction;

(H) comply with an injunction issued by a court of

competent jurisdiction, upon a petition by the State insur-

ance commissioner alleging that the group is in hazard-

ous financial condition or is financially impaired; and

(I) provide the following notice, in 10-point type, in

any insurance policy issued by such group:

“NOTICE

“This policy is issued by our risk retention

group. Your risk retention group may not be subject

to all of the insurance laws and regulations of your

State. State insurance insolvency guaranty funds are

not available for your risk retention group.”

(2) require or permit a risk retention group to par-

ticipate in any insurance insolvency guaranty association

to which an insurer licensed in the State is required to

belong;

(3) require any insurance policy issued to a risk

retention group or any member of the group to be coun-

tersigned by an insurance agent or broker residing in that

State; or

(4) otherwise, discriminate against a risk retention

group or any of its members, except that nothing in this

section shall be construed to affect the applicability of

State laws generally applicable to persons or

corporations.

(b) The exemptions specified in subsection (a) apply to

laws governing the insurance business pertaining to -

(1) liability insurance coverage provided by a risk

retention group for -

(A) such group; or

(B) any person who is a member of such group;

(2) the sale of liability insurance coverage for a risk

retention group; and

(3) the provision of -

(A) insurance related services;

(B) management, operations, and investment activ-

ities; or

ing loss control and claims administration services for

uninsured risks retained by any member of such group);

Mic

Ae Ta ales

for a risk retention group or any member of such group

with respect to liability for which the group provides

insurance.

to act, as an agent or broker for a risk retention group

obtain a license from that State, except that a State may

not impose any qualification or requirement which dis-

criminates against a nonresident agent or broker.

(d) Each risk retention group shall submit -

(1) to the insurance commissioner of the State in

which it is chartered -

(A) before it may offer insurance in any State, a

plan of operation or a feasibility study which includes the

coverages, deductibles, coverage limits, rates, and rating

classification systems for each line of insurance the group

intends to offer; and

(B) revisions of such plan or study if the group

intends to offer any additional lines of liability insurance;

(2) to the insurance commissioner of each State in

which it intends to do business, before it may offer insur-

ance in such State —-

(A) a copy of such plan or study (which shall

include the name of the State in which it is chartered and

its principal place of business); and

(B) a copy of any revisions to such plan or study, as

provided in paragraph (1)(B) (which shall include any

change in the designation of the State in which it is

chartered); and

10d

(3) to the insurance commissioner of each State in

which it is doing business, a copy of the group’s annual

financial statement submitted to the State in which the

group is chartered as an insurance company, whic’ state-

ment shall be certified by an independent public accoun-

tant and contain a statement of opinion on loss and loss

adjustment expense reserves made by -

(A) a member of the American Academy of Actu-

aries, or

(B) a qualified loss reserve specialist.

(e) Nothing in this section shall be construed to affect

the authority of any Federal or State court to enjoin -

(1) the solicitation or sale of insurance by a risk

retention group to any person who is not eligible for

membership in such group; or

(2) the solicitation or sale of insurance by, or opera-

tion of, a risk retention group that is in hazardous finan

cial condition or is financially impaired.

(f)(1) Subject to the provision of subsection

(a)\(1)(G)(relating to injunctions) and paragraph (2), noth-

ing in this Act 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 risk retention

group is not exempt under this Act.

(2) if a State seeks an injunction regarding the con-

duct described in paragraphs (1) and (2) of subsection (e),

such injunction must be obtained from a Federal or State

court of competent jurisdiction.

lld

(g) Nothing in this Act shall affect the authority of any

State to bring an action in any Federal or State court.

(h) Nothing in this Act shall be construed to affect the

authority of any State to regulate or prohibit the owner-

ship interest in a risk retention group by an insurance

company in that State, other than in the case of owner-

ship interest in a risk retention group whose members are

insurance companies.

§ 3903. Purchasing groups

(a) Except as provided in this section and section 6, 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 the

other person with respect to rates, policy forms, cover-

ages, 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 existerice for a minimum period of time or

12d

because any member has not belonged to the group for a

minimum period of time;

(S) 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 coun-

tersigned by an insurance agent or broker residing in that

State; or

(8) otherwise discriminate against a purchasing

group or any of its members.

(b) The exemptions specified in subsection (a) of this

section 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

member of the group.

to act, as an agent or broker for a purchasing group

13d

obtain a license from that State, except that a State may

not impose any qualification or requirement which dis-

criminates against a nonresident agent or broker.

(d)(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 lia-

bility insurance which the purchasing group intends to

purchase;

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 notifying the com-

missioner of any such State as to any subsequent changes

in any of the items provided in such notice.

(e) A purchasing group shall register with and desig-

nate 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

14d

(B) is domiciled on and after the date of the enact-

ment of this Act; in any State of the-United States;

(2) which -

(A) before the date of the enactment of this Act,

purchased insurance from an insurance carrier licensed in

any State; and

(B) since such date of enactment, purchases its

insurance from an insurance carrier licensed in any State;

(3) which was a purchasing group under the

requirements of this Act before the date of the enactment

of the Risk Retention Amendments of 1986; and

(4) as long as such group does not purchase insur-

ance that was not authorized for purposes of an exemp-

tion under this Act as in effect before the date of the

enactment of the Risk Retention Amendments of 1986.

(f) 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 effec-

ted through a licensed agent or broker acting pursuant to

the surplus lines laws and regulations of such State.

(g) Nothing in this Act 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 Act.

(h) Nothing in this Act sha!l affect the authority of any

State to bring an action in any Federal or State Court.

vs aA ch ll in tebe

15d

§ 3904. Securities laws

(a) Ownership interest of members in risk retention

groups

The ownership interests of members in risk retention

group Shall be -

(1) considered to be exempted securities for pur-

poses of section 5 of the Securities Act of 1933 [15 U.S.C.

77e] and for purposes of section 12 of the Securities

Exchange Act of 1934 [15 U.S.C. 781]; and

(2) considered to be securities for purposes of the

provisions of section 17 of the Securities Act of 1933 [15

U.S.C. 77q] and the provision of section 10 of the Securi-

ties Exchange Act of 1934 [15 U.S.C. 78j].

(b) Investment companies

A risk retention group shall not be considered to be

an investment company for purposes of the Investment

Company Act of 1940 (15 U.S.C. 80a-1 et seq.)

The ownership interests of members inga risk reten-

tion group shall not be considered securities for purposes

of ai v State blue sky law.

§ 3905. Permissible state authority

(a) Nothing in this Act shall be construed to exempt a

risk retention group or purchasing group authorized

under this Act from the policy form or coverage require-

ments of any State motor vehicle no-fault or motor vehi-

cle financial responsibility insurance law.

16d

(b) The exemptions provided under this Act shall apply

only to the provision of liability insurance by a risk

retention group or the purchase of liability insurance by a

purchasing group, and nothing in this Act shall be con-

strued to permit the provision or purchase of any other

line of insurance by any such group.

retention group or purchased by a purchasing group shall

not provide or be construed to provide insurance policy

coverage prohibited generally by State statute or declared

unlawful by the highest court of the State whose law

applies to such policy.

(d) Subject to the provisions of section 3(a)(4) relating to

discrimination, nothing in this Act shall be construed to

preempt the authority of a State to specify acceptable

means of demonstrating financial responsibility where

the State has required a demonstration of financial

responsibility as a condition for obtaining a license or

permit to undertake specified activities. Such means may

include or exclude insurance coverage obtained from an

admitted insurance company, an excess lines company, a

risk retention group, or any other source regardless of

whether coverage is obtained directly from an insurance

company or through a broker, agent, purchasing group,

or any other person.

§ 3906. Injunctive orders

Any district court of the United States may issue an order

enjoining a risk retention group from soliciting or selling

insurance, or operating, in any State (or in all States) or in

ete? few) se ete

ee ee oe ee

ine Ll | Seay Sr!

17d

any territory or possession of the United States upon a

finding of such court that such group is in hazardous

financial condition. Such order shall be binding on such

group, its officers, agents, and employees, and on any

other person acting in active concert with any such offi-

cer, agent, or employee, if such other person has actual

notice of such order.

REFERENCES IN TEXT

The Investment Company Act of 1940, referred to in

§3904(b), is title I of act Aug. 22, 1940, ch. 686, 54 Stat.

789, as amended, which is classified principally to sub-

chapter I (§80a-1 et seq.) of chapter 2D of this title. For

complete classification of this Act to the Code, see section

80a-51 of this title and Tables.

[720,102] Oversight of Implementation; Report to

Congress

(a) In general -

(1) Not later than September 1, 1987, and not later

than September 1, 1989, the Secretary of Commerce shall

submit reports to the Congress concerning implementa-

tion of this Act.

(2) Such report shall be based on -

(A) the Secretary’s consultation with State insur-

ance commissioners, risk retention groups, purchasing

groups, and other interested parties; and

(B) the Secretary’s analysis of other information

available to the Secretary.

18d

(b) Contents of the report. - The report shall describe

the Secretary’s views concerning -

(1) the contribution of this Act toward resolution of

problems relating to the unavailability and unaffor-

dability of liability insurance;

(2) the extent to which the structure of regulation

and preemption established by this Act is satisfactory;

(3) the extent to which, in the implementation of

this Act, the public is protected from unsound financial

practices and other commercial abuses involving risk

retention groups and purchasing groups;

(4) the causes of any financial difficulties of risk

retention groups and purchasing groups;

(5) the extent to which risk retention groups and

purchasing groups have been discriminated against

under State laws, practices, and procedures contrary to

the provisions and underlying policy of this Act and the

Product Liability Risk Retention Act (as amended by this

Act); and

(6) such other comments and conclusions as the

Secretary deems relevant to assessment of the implemen-

tation of this Act.

(Pub.L. 99-563, §10, October 27, 1986.)

[720,103] Effective date; applicability

(a) General rule. - Subject to the subsection (b), this Act

shall take effect on the date of its enactment.

19d

(b} Special rule regarding feasibility study. - The pro-

visions of section 3(d) of the Liability Risk Retention Act

of 1986 (as added by section 5(b) of this Act), relating to

the submission of a feasibility study, shall not apply with

respect to any line or classification of liability insurance

which —-

(1) was defined in the Product Liability Risk Reten-

tion Act of 1981 before the date of the enactment of this

Act; and

(2) was offered before such date of enactment by

any risk retention group which has been chartered and

operating for not less than 3 years before such date of

enactment.

(Pub.L. 99-563, §11, October 27, 1986)

APPENDIX E

515E.9 Purchasing group restrictions.

A purchasing group shall not purchase insurance

from a risk retention group or from an insurer unless one

or more of the following conditions apply:

1. The risk retention group is licensed or organized

in a state in which the purchasing group is located.

2. The insurer is admitted in the state in which the

purchasing group is located.

3. The purchase is effected through a licensed agent

or broker acting pursuant to the surplus lines laws and

rules of the state in which the purchasing group is

located, regardless of whether the insurer is admitted in

that state or the risk retention group is licensed or orga-

nized in that state.

4. A purchasing group which obtains liability insur-

ance from an insurer not admitted in this state or a risk

retention group shall inform each of the members of the

group, which 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 insurer may not be subject to all insurance laws

and regulations of this state. A purchasing group shall

not purchase insurance providing for a deductible or self-

insured retention, unless the deductible or self-insured

retention is applicable to individual members of the pur-

chasing group.

88 Acts, ch 1111, § 10

APPENDIX F

PURCHASING GROUPS

[Editor’s Note: Purchasing Group (PG) information appears in

the following order: Name of PG and its state of domicile; lines

and classes of liability PG intends to buy; name of insurer(s)

and domicile(s); pulse point state(s) where PG has filed Notice.

An asterisk indicates the purchasing group (or risk retention

group) has been added since the last issue of the RRR.]

AAAA [ASBESTOS ABATEMENT ASSN. OF

AMERICA] (TX): Comprehensive general liability; Mid-

American Indemnity Ins. Co. (Cayman Is.); CO, TN

ABI AUTOS FOR HIRE RISK PG, INC. (AZ): Auto

& general liability for rental cars, limos & taxis; Protec-

tive Casualty Ins. Co. (MO); CA

ACCOUNTANTS PROFESSIONAL LIABILITY

GROUP (CA): Accountants professional liability; Security

Ins. Co. of Hartford (CT); Connecticut Indemnity Co.

(CT); CA, CO, DE, HI, TN, TX, VT

ACCOUNTANTS RISK MANAGEMENT SOCIETY

PG (CA): Professional liability; Harbor Ins. Co. (CA);

Pacific Ins. Co. (CA); CA

ACTUARIES & PENSION ADMINISTRATORS PG

(CA): Errors & Omissions for Actuaries & Pension

Administrators; Planet Ins. Co. (WI); CA, CO, DE, TX, TN

ADVANTAGE INS. PG (IL): Contractual Liability for

Auto Warranties; Western Diversified Casualty Ins. Co.

(IL); CA, CO, DE, TN, VT

AEIC PG (IL): Professional Liability for Architects &

Engineers; Natl. Union Fire Ins. Co. (PA); CA, CO, DE,

HI, TN, TX, VA, VT

AERIALIFT LIABILITY ASSN. OF AMERICA (UT):

General liability for aerialift platforms and contractors

equipment; Homestead Ins. Co. (PA); Southern American

Ins. Co. (UT); CO, DE, TN, TX

AGENTS ASSN. OF AMERICA (CA): Professional

Liability for Life & Health Ins. Agents; Golden Eagle Ins.

Co. (CA); CA

AHA HEALTHCARE INSTITUTIONS D&O PG

(CA): Directors & Officers Liability for American Hospi-

tal Assn. members; The Doctors’ Company (CA); CA, CO,

DE, TN, VA, VT

ALLIED HEALTH PG ASSN. (IL): Medical Liability

for professionals engaged in the delivery of allied and

home healthcare services; Chicago Ins. Co. (IL); CA, CO,

DE, HI, TN, VA, VT

AMBULATORY CARE EMERGENCY PG, INC.

(TX): Medical professional liability; Natl. Union Fire Ins.

Co. (PA); CA, CO, DE, TN, TX, VT

AMERICAN ACADEMY OF PHYSICIANS ASSIS-

TANTS (AAPA) (TN): Professional Liability; American

Continental Ins. Co. (MO); CA, CO, DE, HI, TN, TX, VA,

AMERICAN ACUPUNCTURE COUNCIL PG (CA):

Professional liability; Pro-Med Intl., Ltd. (Eng.); CA

AMERICAN ALCOHOLIC BEVERAGE CORP.

(KY): Liquor Liability; American Ins. & Indemnity Corp.

(KY); CA, DE, TN, VT

AMERICAN AMBULANCE ASSN. (AZ): Liability;

AzStar Ins. Co. (AZ); VA

AMERICAN AMUSEMENT PG, INC. (KY): General

liability; American Ins. & Indemnity Corp. (KY); CA, VT

AMERICAN ANESTHESIOLOGISTS PROF. LIAB.

GROUP (TX): Professional liability; American Physicians

Ins. Exchange (TX); TN, TX, VT

AMERICAN ASBESTOS ABATEMENT CONTRAC-

TORS ASSN., INC. (KY): Commercial General Liability,

Products, Completed Operations; American Ins. &

Indemnity Corp. (KY); CA, DE, TN, VT

AMERICAN ASSN. FOR COUNSELING AND

DEVELOPMENT (DC): Professional Liability for Mem-

bers; RLI Ins. Co. (IL); CA, CO, DE, TN, TX, VA, VT

AMERICAN ASSN. OF ORAL & MAXILLOFACIAL

SURGEONS (IL): Liability Ins. for Oral Surgeons; St.

Paul Fire & Marine Ins. Co. (MN); CA, CO, DE, HI, TN,

TX, VA, VT

AMERICAN ASSN. OF ORTHODONTISTS (MO):

Professional liability; Scottsdale Ins. Co. (OH); Natl.

Casualty Co. (MI); CA, CO, DE, TN, TX, VT

AMERICAN BANKERS ASSN. (DC): Professional

Liability; Progressive Casualty Ins. Co. (OH); CA, CO,

DE, TN, VT

AMERICAN CHEMIST ASSN. INC. (KY): Chemists

Professional Liability; American Ins. & Indemnity Corp.

(KY); CA, DE, TN

AMERICAN COLLECTORS ASSN. ENTERPRISES,

INC. (MN): Professional Liability for Members; General

Ins. Co. of America (WA); CA, CO, DE, TN, VA, VT

AMERICAN CONTINENT LAW ENFORCEMENT

& MUNICIPAL LIABILITY ASSN., INC. (UT): Profes-

sional liability for law enforcement; Homestead Ins. Co.

(PA); Southern American (UT); CO, DE, TN, VT

AMERICAN CONTRACTORS ASSN., INC. (KY):

Commercial General Liability, Products, Completed Oper-

ations; American Ins. & Indemnity Corp. (KY); CA, CO,

DE, TN, VT

AMERICAN CONTRACTORS RPG, INC. (TX):

General & Auto Liability; Continental Ins. Co. (NH); CA,

CO, DE, TN, TX, VT

AMERICAN DEALERS PURCHASING GROUP,

LTD. (IL): Contractual liability; United Equitable Ins. Co.

(IL); CO, DE, HI, TN, TX

AMERICAN DENTAL PROF. LIAB. GROUP (TX):

Professional liability; American Physicians Ins. Exchange

(TX); TN, TX, WT

AMERICAN DENTAL PG (DC): Medical Malprac-

tice; Frontier Ins. Co. (NY); CA, CO, DE, TN, VA, VT

AMERICAN ENVIRONMENTAL PG, INC. (MQ):

Pollution liability; Bel-Aire Ins. Co. (MQ); DE, CO, VT

AMERICAN ENVIRONMENTAL CONSULTANTS

PG (PA): Professional liability; American Professionals

Ins. Co. (IN); DE, TN

AMERICAN ENVIRONMENTAL CONTRACTORS,

PG (PA): Professional liability; American Professionals

Ins. Co. (IN); DE, TN, VT

AMERICAN FREEDOM CARRIERS RPG (IN):

Trucking Physical Damage; Continental American Ins.

Co. (IN); CA, TN, VT

AMERICAN HEALTH CARE PROFESSIONALS PG

ASSN. (IL): Medical Professional Liability; Transamerica

Ins. Co. (CA); CA, DE, HI, TN, VT

AMERICAN INS. & REAL ESTATE AGENTS PG,

INC. (KY): Errors & Omissions; American Ins. & Indem-

nity Corp. (KY); CA, DE, TN, TX, VT

AMERICAN INSURANCE PROFESSIONAL ASSN.

INC. (MOQ): Professional liability; Bel-Aire Ins. Co. (MO);

A OT a wh

——

AMERICAN INTERNISTS’ PG (DC): Medical Mal-

practice; Frontier Ins. Co. (NY}; CA, CO, DE, TN, VA, VT

AMERICAN LAWYERS PG, INC. (KY): Professional

Liability; American Ins. & Indemnity Corp. (KY); CA, DE,

TN, VT

AMERICAN LIVERY PG, INC. (KY) (aka: Kentucky

Council American Livery): Commercial auto and

umbrella liability for trucking distributors; American Ins.

& Indemnity Corp. (KY); CA, DE, VT

AMERICAN LOCATORS & RECOVERY ASSN.

(WY): Comprehensive general liability and garage

keepers legal liability for automobile repossessors;

Laramie Ins. Co. (WY); CA, DE, TN, VT

“AMERICAN MANUFACTURERS PG (WY): Prod-

ucts liability & general iiability; Oxford Indemnity Ins.

Co. (WY); CA, CO, DE, TN

AMERICAN MOSQUITO MANAGEMENT INS.

ASSN., INC. (UT): General Liability Specifically

Designed for Mosquito Control; Homestead Ins. Co. (PA);

Southern American Ins. Co. (UT); CA, CO, DE, TN, TX,

AMERICAN MULTI-SPECIALTY PROF. LIAB.

GROUP (TX): Professional liability; American Physicians

Ins. Exchange (TX); TN, TX, VT

AMERICAN NONPROFIT DIRECTORS & OFFI-

CERS PG, INC. (KY): Directors & Officers; American Ins.

& Indemnity Corp. (KY); CA, VT

AMERICAN OBSTETRICAL & GYNECOLOGICAL

PROF. LIAB. GROUP (TX): Professional liability; Ameri-

can Physicians Ins. Exchange (TX); TN, TX, VT

AMERICAN ORTHODONTIST PROF. LIAB.

GROUP (TX): Professional liability; American Physicians

Ins. Exchange (TX); TN, TX, VT

AMERICAN ORTHOPEDICS PROF. LIAB. GROUP

(TX): Professional liability; American Physicians Ins.

Exchange (TX); TN, TX, VT

AMERICAN PART-TIME PHYSICIANS PG (DC):

Medical Malpractice; Frontier Ins. Co. (NY); CA, CO, DE,

TN, VA, VT

*AMERICAN PEST CONTROL ALLIANCE, INC.

(TX): Liability for pest control operators; Universal Secu-

rity Ins. Co. (TN); TX

AMERICAN PEST CONTROL PG INC. (FL): Gen-

eral liability; auto liability; Millers Natl. Ins. Co. (IL);

Oxford Indemnity Irs. Co. (WY); CA, CO, DE, HI

AMERICAN PHYSICAL THERAPY ASSN. PG (IL):

Professional liability; Chicago Ins. Co. (IL); CA, CO, DE,

HI, TN, TX, VT

AMERICAN PHYSICIANS PG (DC): Medical Mal-

practice; Frontier Ins. Co. (NY); CA, CO, DE, TN, VA, VT

AMERICAN PSYCHIATRIC ASSN. PG, INC. (NY):

Professional Liability; RLI Ins. Co. (IL); CA, CO, DE, HI,

TN, VA, VT

AMERICAN REAL ESTATE PROFESSIONALS

ASSN. (MO): Errors & Omissions for Real Estate Agents;

Bel-Aire Ins. Co. (MO); CA, DE, TN, TX, VT

AMERICAN RENTAL DEALERS INS. (MO): Com-

mercial General Auto Liability, Umbrella Excess Liability;

Lincoln Ins. Co. (DE); VA, VT

AMERICAN SADDLE ANIMAL ASSN. (MO): Sad-

dle Animal Liability; Bel-Aire Ins. Co. (MO); CA, TN, TX,

VA, VT

AMERICAN SOCIETY OF ACCOUNTANTS, INC.

(FL): Professional liability for accountants; Illinois Ins.

Exchange (IL); CA, TN, TX, VT

AMERICAN TOOL, MACHINE AND OUTDOOR

EQUIPMENT MEGS. PG, INC. (KY): Commercial Gen-

eral Liability; American Ins. & Indemnity Corp. (KY); CA,

DE, TN, VT

AMERICAN TRANSPORTATION RISK PG (OH):

Auto and long-haul trucking liability; Cadillac Ins. Co

(MI); CA, CO, DE, TN, VT

i a

AMERICAN VETERINARY MEDICAL ASSN. (IL):

Professional Liability; Centennial Ins. Co. (NY); CA, CO,

DE, HI, TN, TX, VA, VT

AMERICAN WOOD SUPPLIERS LIABILITY

GROUP (DE): Liability for members; Capital City Ins. Co.

(SC); CA, DE, TN, VA, VT s

AMUSEMENT RISK PG, INC. (IL): General liability;

Millers-Illinois Ins. Co. (IL); Oil & Gas Ins. Co. (OH);

Petrosurance Casualty Co. (OK); The Illinois Ins. Co. (IL);

CA, TN

APEX REAL ESTATE AGENTS RPG (MN): Profes-

sional liability; Home Ins. Co. (NY); VT

APGA (AMERICAN PUBLIC GAS ASSN.) INSUR-

ANCE GROUP INC. (TN): General Liability & Auto Lia-

bility (effective 7/1/88); Errors & Omissions, Directors &

Officers effective (7/1/89); Ranger Insurance Co. (DE);

CA, CO, DE, HI, TN, TX, VT

APPRAISER LIABILITY INS. TRUST PG (MO):

Professional Liability Exclusively for Real Estate

Appraisers by Direct Mail; Saver’s Property & Casualty

Ins. Co. (MO); H.S. Weavers Underwriting Agencies, Ltd.

(Eng.); Cal.-Fed Syndicate, Ill. Ins. Exch.; CA, CO, DE, HI,

TN, TX, VA, VT

APPRAISER’S LIABILITY INS. PROGRAM ASSN.

RISK PG (IL): Errors and omissions for real estate

appraisers; Intl. Ins. Co. (IL); CA, CO, DE, TN, TX, VT

ARM/ELECTRICAL CONTRACTORS PURCHAS-

ING GROUP (CA): Commercial General & Automobile

Liability; Superior Natl. Ins. Co. (CA); CA

roo sil

ARM/GLAZIERS PG (CA): Commercial General &

Automobile Liability; Superior Natl. Ins. Co. (CA); CA

ARM/HEATING & AIR CONDITIONING PG (CA):

Commercial General & Automobile Liability; Superior

Natl. Ins. Co. (CA); CA

ASBESTOS ABATEMENT ASSN. OF AMERICA

(Unk): Liability; Mid-American Indemnity Ins. Co. (TX);

ASBESTOS ABATEMENT PG OF AMERICA, INC.

(LA): General liability for asbestos abatement and con-

tainment; Presidential Fire and Casualty Co. (LA); CA,

CO, TN

ASSN. FOR INTERCITY RELOCATORS (UT): Real

Estate Agent/Broker Errors & Omissions; Utah Home

Fire Ins. Co. (UT); CA, DE, TN, VT

ASSN. OF MEDICAL EQUIPMENT DEALERS,

INC. (AZ): Products, Completed Operations; AzStar Ins.

Co. (AZ); CA, DE, TN, VA, VT

ASSN. OF SOLID WASTE & REFUSE HAULERS

PG (UT): Comprehensive general liability & auto lia-

bility; Associated Intl. Ins. Co. (CA); CA, CO, DE, TN, VT

ASSN. OF TRUCK OPERATORS (VA): Long Haul

Truck, Commercial Auto; Markel American Ins. Co. (VA)

or Essex (VA); CA, CO, DE, HI, TN, TX, VA, VT

ASSOCIATED CONSTRUCTORS INSURANCE PG

(CA): General liability; Ponderosa Ins. Co. (NV); CA

10f

ASSOCIATED CREDIT BUREAUS, INC. (MO):

Errors & Omissions Liability for Credit Bureaus and Col-

lection Agencies; General Ins. Co. of America (WA); CA,

CO, DE, HI, TN, TX, VT

ASSOCIATED RESTAURANT MANAGEMENT PG

(RI): Comprehensive General Liability, Liquor Law, Non-

Owned & Hired Auto; Natl. Union Fire Ins. Co. (PA); RLI

Ins. Co. (IL); CA, CO, TN, VA, VT

ASSOCIATIONS PG (IL): Directors & Officers and

Professional Liability; Chicago Ins. Co. (IL); CA, CO, DE, :

HI, TN, TX, VA, VT

ASSURANCE PURCHASERS COOP., INC. (MO)

(aka: ASSURANCE PURCHASERS PG, INC.): Liquor Lia-

bility Master Policy; Bel-Aire Ins. Co. (MO); CA, DE, HI,

TN, TX, VA, VT

AUTOMATIC TRANSMISSION REBUILDERS

ASSN. (CA): Auto Repair Liability; Heritage Indemnity

Co. (CA); CA, CO, DE, TN, TX, VT

AUTOMOBILE DEALERS COOP. OF AMERICA,

INC. PG (CA): Extended Services Contracts; Western

—General Ins. Co. (CA); CA, CO, DE, HI, VT

AUTOMOTIVE INS. PG (TX): Auto Dealers’ Lia-

bility Extended Warranty; Nobel Lloyds Ins. Co. (TX);

CA, CO, DE, TN, TX, VA, VT

AUTOPLAN PG (NE): Contractual Liability; Insurer

Unknown; CA

AVERBECK DEVELOPERS PG (CA): Commercial

General & Automobile Liability; Superior Natl. Ins. Co.

(CA); CA

11f

AVIATION LIABILITY PG, INC. (MQ): Aviation &

Commercial General Liability; Bel-Aire Ins. Co. (MO);

CA, TN

BAIL BOND AGENTS RISK PG, INC. (IN): General

and professional liability for bail bond agents; Universal

Security Ins. Co. (TN); CA, CO, DE, TN, TX

BENEFIT ADMINISTRATORS PG (MS): Profes-

sional liability for mem’>ers; Walbrook Ins. Co., Ltd.

(Eng.); Anglo American Ins. Co., Ltd. (Eng.); St. Katherine

Ins. Co. Ltd. (Eng.); Generali Ins. Co., Ltd. (Eng.); CO, TN

BETTER HOMES & GARDENS REAL ESTATE SER-

VICES, INC. PG (IA): Professional Liability for Real

Estate Agents and Brokers; Home Ins. Co. (NH); CA, CO,

DE, HI, TN, TX, VA, VT

BRC FRANCHISE HOLDERS INS. PG, INC. (CA)

(Previously known as: BUDGET RENT-A-CAR FRAN-

CHISE HOLDERS PG): Auto & General Liability for

Daily Rental Operations; Travelers Indemnity Co. (CT);

CO, TN, TX, VT

BROWNGUARD ASSN. OF DELAWARE (DE):

Comprehensive general liability/Security guard errors &

omissions; Home Ins. Co. (NH); DE, TN

BUTLER GENERAL CONTRACTORS/SNI PG

(CA): General Liability & Commercial Auto Liability;

Superior Natl. Ins. Co. (CA); CA

*CABLE OPERATORS PG, INC. (MOQ): Service

indemnification liability for members; Bel-Aire Ins. Co.

(MO); CO, DE, TN, VT

12f

CALIFORNIA ANIMAL FEED MFG. GROUP/SNI

PG (CA): Auto and commercial general liability; Superior

Natl. Ins. Co. (CA); CA

CALIFORNIA AUCTIONEERS GROUP/SNI PG

(CA): Auto and commercial general liability; Superior

Natl. Ins. Co. (CA); CA

CALIFORNIA BEVERAGE DISTRIBUTORS

GROUP/SNI PG (CA): Auto and commercial general lia-

bility; Superior Natl. Ins. Co. (CA); CA

CALIFORNIA CARWASH ASSN./SNI PG (CA):

Commercial General Liability, Commercial Auto &

Garage Liability; Superior Natl. Ins. Co. (CA); CA

CALIFORNIA DRYCLEANING GROUP/SNI PG

(CA): Auto and commercial general liability; Superior

Natl. Ins. Co. (CA); CA

CALIFORNIA ELECTRONIC GROUP/SNI PG (CA):

Auto and commercial general liability; Superior Natl. Ins.

Co. (CA); CA

CALIFORNIA HARDWARE STORE GROUP/SNI

PG (CA): Auto and commercial general liability; Superior

Natl. Ins. Co. (CA); CA

CALIFORNIA LANDSCAPING CONTRACTOR

GROUP/SNI PG (CA): Auto and commercial general lia-

bility; Superior Natl. Ins. Co. (CA); CA

CALIFORNIA METALS GROUP/SNI PG (CA): Auto

and commercial general liability; Superior Natl. Ins. Co.

(CA); CA

13f

CALIFORNIA MOBILE HOME PARK GROUP/SNI

PG (CA): Auto and commercial general liability; Superior

Natl. Ins. Co. (CA); CA

CALIFORNIA PACIFIC AGENTS & BROKERS

ASSN. (CA): Life/Health Agents’ Errors & Omissions;

Lexington Ins. Group (MA); CA, DE, TN, VT

CALIFORNIA PAPER STOCK GROUP/SNI PG

(CA): Auto and commercial general liability; Superior

Natl. Ins. Co. (CA); CA

CALIFORNIA PRODUCE HANDLER GROUP/SNI

LPG (CA): Auto and commercial general liability; Super-

ior Natl. Ins. Co. (CA); CA

CALIFORNIA SCRAP METAL DEALERS GROUP/

SNI PG (CA): Auto and commercial general liability;

Superior Natl. Ins. Co. (CA); CA

-CALIFORNIA SHOE STORE GROUP/SNI PG (CA):

Auto and commercial general liability; Superior Natl. Ins.

Co. (CA); CA

CENTURY 21 PG (CA): Professional Liability for

Real Estate Agents & Brokers; Home Ins. Co. (NH); CA,

DE, HI, TN, TX, VA, VT

CHIMNEY SWEEP PG ASSN., INC. (CO): Commer-

cial General Liability; RLI Ins. Co. (IL); CO, DE, HI, VA,

COCA-COLA BOTTLERS ASSN. (GA): Umbrella

Liability, Products Withdrawal and Extortion; General

Star Natl. Ins. Co. (OH); CA, CO, TN, TX, VA, VT

COLORADO WATER USERS RISK MANAGE-

MENT ASSN. (CO): General Liability and D&O for

14f

Members Engaged in Activities Related to Storage and

Delivery of Water; Natl. Union Fire Ins. Co. (PA); CO

COMMERCIAL AND PROFESSIONAL INS.

ASSN./PROFESSIONAL LIABILITY RISK PG (UNK):

Professional liability; Euro/ American Ins. Co. Ltd. (Turks

& Caicos); CO, HI, TN, VT

COMMERCIAL VEHICLE OWNERS & OPERA-

TORS PG (TX): Auto liability; Insurer unknown; TX

COMMON INTEREST COMMUNITY UNDER-

WRITING SERVICES, INC. (IL): E&O for property man-

agers & management cos.; D&O for condos, co-ops,

HOAs, & other community assns.; City Insurance Co.

(NJ); CA, CO, DE, TN, VT

CONSULTANTS LIABILITY PG, INC. (IL): Liability

for Executive Search Firms, Recruiters & Management

Consultants; Homestead Ins. Co. (PA); CA, CO, TN, TX,

CONSUMER RESOURCE SERVICES ASSN., INC.

(TX): General & auto liability for licensed child care

centers; Universal Security Ins. Co. (TN); TX

CONTRACT LIABILITY PG, INC. (OK): Liability

Ins. for Distributors of Commercial and Household

Audio and Audio Visual Products; American Lender Ins.

Co. (OK); CA, CO, DE, TN

CONTRACTORS OF AMERICA PG (TX): General,

auto & excess liability for contractors; American Guard-

ian Ins. Underwriters Lloyds (TX); Gulf Group Lloyds; TX

DEALER INDEMNITY ASSN., INC. (MO): Contrac-

tual liability; Bel-Aire Ins. Co. (MO); CA, CO

15f

DEALERS SERVICE ASSN. RPG (AL): Liability;

New World Ins., Ltd. (unk); TN

DESIGN PROFESSIONALS PG (IL): Professional

liability; RLI Ins. Co. (IL); CA, DE, HI, TN, TX, VT

DESIGN PROFESSIONALS RISK CONTROL

GROUP (CA): Architects & Engineers Professional Lia-

bility; Design Professional Ins. Co. (CA); Security Ins. Co.

of Hartford (CT); Connecticut Indemnity Co. (CT); CA,

CO, DE, HI, TN, TX, VA, VT

DIET CENTER ASSN., INC. (CO): Commercial gen-

eral liability; Universal Security Ins. Co. (TN); CA, CO,

DE, TN, TX

DIRECTORS AND OFFICERS PG, INC. (TX): Direc-

tors and Officers Liability For Members; Capital Ins., Ltd.

(Barbados); Transatlantic Ins. Co., Ltd. (Barbados); CA

DSN DEALER SERVICE NETWORK, INC. (NJ):

Auto Dealer’s Warranties; Homestead Ins. Co. (PA); CA,

CO. DE, TN, TX, VA, VT

EDP PROF. SERVICES (DE): Errors & omissions;

Gulf Ins. Co. (MO); United Natl. Ins. Co. (PA); Homestead

Ins. Co. (PA); Voyager Indemnity Ins. Co. (GA); CO, TN,

EDUCATORS PURCHASING GROUP ASSN. (IL):

Educational services professional liability; Chicago Ins.

Co. (IL); CA, CO, DE, HI, TN, TX, VT

ELECTRONIC REALTY ASSOC., INC. PG (MN):

Professional Liability for Real Estate Agents & Brokers;

Home Ins. Co. (NH); CA, CO, DE, TN, TX, VA

16f

EMERGENCY DEPT. PURCHASING GROUP, INC.

(TX): (Formerly known as: Emergency Room PG) Profes-

sional liability; United Natl. Ins. Co. (PA); H.S. Weaver's

Underwriting Agencies, Ltd. (Eng.); Illinois Ins. Exchange

(IL); CA, TX

ENVIRONMENTAL IMPAIRMENT PG, INC. (MO):

Pollution liability; Bel-Aire Ins. Co. (MQ); CO, DE, TN,

ENVIRONMENTAL SERVICES ALLIANCE RISK

PG (MS): Liability for members; Insurer unknown; CO,

DE, TN, VT

EQUIPMENT LEASING PG, INC. (UT): General lia-

bility; Utah Home Fire Ins. Co. (UT); CA, CO, TN

EXPLOSIVES PG (TX): Excess Liability; Nobel

Lloyds Ins. Co. (TX); CA, DE, TN, VT

FACTORY/AUTOMOTIVE PG (CA): Commercial

General & Automobile; Superior Natl. Ins. Co. (CA); CA

FACTORY/TIRE DEALERS PG (CA): Commercial

General & Automobile; Superior Natl. ins. Co. (CA); CA

FINANCIAL PLANNERS PROFESSIONAL LIA-

BILITY ASSN. (CA): Errors & Omissions for Financial

Planners; Clarendon Natl. Ins. Co. (MD); CA, CO, DE,

TN, TX, VT

FINE DINING GROUP/SNI PG (CA): Commercial

General Liability, Commercial Auto Liability; Superior

Natl. Ins. Co. (CA); CA

FIRST AMERICAN PG (TX): Heavy & agricultural

equipment dealer warranty reimbursement coverage;

First American Ins. Co. (MQ); TX

17f

FITNESS TRADE ASSN. RPG (PA): Professional &

Commercial general liability for exercise & health clubs,

racquet, tennis & toning; General Star Indemnity Co.

(CT); CO, DE, TN, VT

FLEET PARKING PURCHASING GROUP SER-

VICES, INC. (CA): Garagekeeper & general liability; The

Canadian Ins. Co. of Calif. (CA); CA

FOSTER PARENT SERVICES, INC. (GA): Liability;

Empire Indemnity (OK); VT

FRATERNITY INSURANCE PG, INC. (KY): General

Liability for Members; New Hampshire Ins. Co. (NH);

CA, CO, TN, TX, VT

GARAGE SERVICES AND AUTO DEALERS LIA-

BILITY ASSN. OF AMERICA (UT): General liability;

Homestead Ins. Co. (PA); Southern American Ins. Co.

(UT); CO, DE, TN

GROCERS PURCHASING GROUP, INC. (KS): Lia-

bility for grocers including products liability; Reliance

Ins. Co. (PA); Stonewall Ins. Co. (AL); CO, TN

HAULERS ASSN. OF NORTH AMERICA (TX):

Auto liability for aggregate sand & gravel haulers; NGC

County Mutual Ins. Co. (TX); TX

HAWAII TRANSPORTATION ASSN. (HI): Auto lia-

bility & physical damage, garage & general liability;

Clarendon Natl. Ins. Co. (MD); HI

HEALTHCARE PURCHASING GROUP ASSN. (IL):

Professional liability; Chicago Ins. Co. (IL); CA, DE, HI,

TN, TX, VT

18f

HEALTH CARE PROFESSIONAL PROGRAM

(WA): Medical professionai liability; The Continental Ins.

Co. (NH); CA, HI, TN, TX, VT

HEALTH CARE PROFESSIONS PG ASSN. (IL):

Medical Professional Liability; Transamerica Ins. Co.

(CA); CA, DE, HI, TN, TX, VA, VT

HEALTH CARE PROVIDERS PG (TX): Professional

& general liability for nursing homes; Surplus Underwri-

ters Casualty Ins. Co. (TX); TX

HEALTH CARE PURCHASING GROUP, INC. (TX):

Professional & commercial general liability; United Natl.

Ins. Co. (PA); H.S. Weaver’s Underwriting Agencies, Ltd.

(Eng.); Illinois Ins. Exchange (IL); CA, TN, TX

HEALTH INDUSTRY DISTRIBUTORS ASSN.

MEMBERSHIP PG (UT): Premises, Products & Profes-

sional Liability; Utah Home Fire Ins. Co. (UT); CA, CO,

DE, VT

HEALTH PROFESSIONAL PG (IA): Professional!

Liability; RLI Ins. Co. (IL); CA, CO, DE, HI, TN, TX, VA,

HOME CARE ASSN. RISK PG, INC. (VT): Compre-

hensive General Liability, Excess, Non-Owned and Hire

Car Liability for Members; AIU Ins. Co. (NY); CA, CO,

TN, VA, VT

HOME FURNISHINGS ASSN. (RI): Furniture

Retailers Comprehensive General Liability and Umbrella

Liability; Northbrook Property & Casualty Ins. Co. (iL);

scottsdale Ins. Co. (OH); CA, DE

19f

HOMEOWNERS ASSN. RISK RETENTION PG

(AZ): General Liability; Exchange Ins. Co. of New York

(NY); CA

HORSEMEN OF NO. AMERICA SAFETY CON-

TROL PG (IL): Horse risks; General Ins. Trieste & Venice

(NY); DE, TN, VT

HPBHS PG (TX): Medical malpractice for physicians

& a TX hospital; H.S. Weavers (Eng.); Western Indemnity

Ins. Co. (TX); Lexington Ins. Co. ‘Eng.); TX

H.R.S.L. MEMBERSHIP PG (TX): Professional &

general liability for nursing homes, retirement Centers &

similar facilities; Surplus Underwriters Casualty Ins. Co.

(TX); TX

*“HSPM PG, INC. (IL): Medical malpractice; Anglo

American Ins. Co. Ltd. (Eng.); Illinois Ins. Exchange (IL);

Lexington Ins. Co. (MA); Walbrook Ins. Co. Ltd. (Eng.);

INDEPENDENT ALARM ASSN. OF AMERICA PG

(CA): Commercial General liability and errors & omis-

sions; Nautilus Ins. Co. (AZ); Accessible to producers

who are retained by prospective members; CA, CO, DE,

HI, TN, TX, VT

INDEPENDENT BROKERS OF AMERICA PG, INC.

(MQ): Errors & omissions; Bel-Aire Ins. Co. (MO); CO,

TN, VT

INDEPENDENT INVESTMENT ADVISORS PG

ASSN., INC. (DC): Professional Liability; Insurer

Unknown; VT, CA

20f

INDEPENDENT TRUCK OWNERS/OPERATORS

ASSOC. PG (MO): Liability; Bel-Aire Ins. Co. (MQ); TN,

TX, VT

INDEPENDENT TRUCKERS ASSN. GROUP, INC.

PG (OR): Liability; Insurer unknown; CA

INDEPENDENT TRUCKERS FED. PG, INC. (OR):

Liability for Over-The-Road Trucking Firms; Insurer

(Unk.); CA

INSURANCE AGENTS OF AMERICA RISK PG,

INC. (TX): Professional liability; Universal Security Ins

Co. (TN); CA, CO, TX

INSURANCE SERVICES PROFESSIONAL PRO-

GRAM (WA): Professional liability; Harbor Ins. Co. (CA);

Pacific Ins. Co. (CA); CA, CO, DE, HI, TN, TX, VT

“INTERIOR DESIGNERS PG INC. (DE): Errors &

omissions liability for members; Gulf Ins. Co. (MQ);

INTER-LOCKE BEVERAGE GROUP/SNI PG (CA):

Commercial General Liability, Commercial Auto Liability;

Superior Natl. Ins. Co. (CA); CA

INTERNAL MEDICINE PG OF AMER. (CA): Pro-

fessional Liability; The Doctors’ Co. (CA); CA, CO, HI,

INTL. MOUNTAINEERING FEDERATION INC.

(CO): Commercial general liability; Universal Security

Ins. Co. (TN); CO, TN, VT

INTL. RELOCATORS/TOTAL (PA): Real estate

errors & Omissions; Walbrock Ins. Co., Ltd. (UK); Anglo

American Ins. Co. (UK); Essex Ins. Co. (DE); Chesapeake

Casualty Co. (DE); CA, CO, DE, TN, TX, VT

21f

INTL. SPECIAL EVENTS & RECREATION ASSN.,,

INC. (UT): General Liability for social events & recre-

ational activities; Homestead Ins. Co. (PA); Southern

American Ins. Co. (UT); CA, DE, TN, TX, VT

IRMANDADE PORTUGUESE SOCIETY, INC. (CA):

General Liability, Liquor Liability for Social Halis; Com-

mercial Acceptance Ins. Co. (Barbados); CA

ISBE INS. PG (IA): Directors & Officers Liability and

Company Reimbursement Coverage; No. Atlantic Casu-

alty & Surety Co., Inc. (IN); TN

LAW ENFORCEMENT PROFESSIONAL LIA-

BILITY INS. PG (DC): Law Enforcement Agency Profes-

sional Liability; Ins. Co. of the State of Pennsylvania (PA);

CO, TN

LAWYERS BENEFIT PG (MOQ): Lawyers Errors &

Omissions; Bel-Aire Ins. Co. (MO); CA, CO, DE, TN, TX,

VA, VT

LEISURE PRODUCTS INDUSTRY ASSN., INC.

(TX): Product liability for toy manufacturers, sporting

goods & leisure products industry; Universal Security

Ins. Co. (TN); CO, TN, TX, VT

LESSORS & RENTERS ASSN., INC. (PA): Commer-

cial Auto Liability & Excess; Wheelway Ins. Co. (PA); CA,

CO, DE, TN, TX, VA

LIABILITY PG, INC. (OK): Liability for Members for

Extended Auto Warranty Contracts; American Lenders

Ins. Co. (OK); CO, DE, TN

22f

LIQUOR DEALERS RPG, INC. (AL): Liquor Lia-

bility, Commercial general liability; Oxford Indemnity

(WY); CA, VT

LONG-HAUL TRUCKING LIABILITY PG (TX):

Commercial Liability; Lloyds U.S. (TX); CA, DE, TN, TX,

VA, VT

LOWERY/PEST CONTROL PG (CA): Commercial

General & Automobile; Superior Natl. Ins. Co. (CA); CA

LUXURY & AUTO RENTAL AUTO PG, INS. (MO):

Auto Liability/Limousine; Bel-Aire Ins. Co. (MQ); DE,

TN, TX, VA, VT

MADISON PURCHASING GROUP (RI): General &

excess liability; Reliance Ins. Co. (PA); Royal Indemnity

Co. (DE); Federal Ins. Co. (NJ); Fireman’s Fund Ins. Co.

(CA); CO

MANUFACTURERS AND CONTRACTORS RPG,

INC. (TX): All liability coverages; American Trust Ins.

Co., Ltd. (Turks & Caicos); DE, TN, VT

MARKETING/MEDIA PROF. SERVICES (DE):

Errors & omissions; Gulf Ins. Co. (MO); United Natl. Ins.

Co. (PA); Homestead Ins. Co. (PA); Voyager Indemnity

Ins. Co. (GA); CO, TN, VT

MECHANICAL INS. PG, INC. (MO): Liability for

Auto Vehicle Extended Warranty Contracts; Bel-Aire Ins.

Co. (MQ); CA, DE, TN, TX, VA, VT

MEDICAL GROUP PURCHASING ASSN. (TN):

Medical Professional Liability for Members; Century

American Ins. Co. (TN); CA, DE, TN, TX, VA, VT

23f

MEDICAL MALOCCURRENCE PROTECTIVE

ASSN. OF AMERICA, INC. (UT): Professional liability;

Homestead Ins. Co. (PA); Southern American Ins. Co.

(UT); CO, DE, TN, VT

MEDICAL PERSONNEL SERVICES TRUST (TX):

General & professional liability for home health care,

nurses’ registries & similar healthcare personnel services;

Surplus Underwriters Casualty Ins. Co. (TX); TX

MEDICAL TRANSPORT SERVICES TRUST (TX):

General & professional liability for ambulance & para-

transit services & related activities; Surplus Underwriters

Casualty Ins. Co. (TX); TX

MMI HEALTHCARE INTERESTS (IL): Hospital Lia-

bility; American Continental Ins. Co. (MO); CA, CO, DE,

HI, TN, TX, VA, VT

MMI PHYSICIANS INTERESTS (IL): Physicians’

Liability; American Continental Ins. Co. (MO); CA, CO,

DE, TN, VA

MOTORS INSURANCE PG (MI): Contractual lia-

bility for vehicle service contracts; CIM Ins. Corp. (NY);

MIC Property & Casualty Ins. Corp. (MI); CO, TN, TX

MS DEALER PG, INC. (MS): Auto service agree-

ment contractual liability; MS Casualty Ins. Co. (MS); TX

MUNICIPAL PG, INC. (TX): Alien/Law Enforce-

ment Officers Liability; Turegum, Walbrook, Ludgate

(Eng.); CO, DE, TN, TX, VA, VT

*MUTUAL ASSURANCE PG (WY): Dealer services

contingent liability; Oxford Ins. Co. (WY); TN

24f

MUTUAL ASSURANCE PG, INC. (MO): Contrac-

tual Liability; Bel-Aire Ins. Co. (MO); CA, DE, TN, TX,

VA, VT

N/S INS. PG, INC. (DE): [aka: Nutri/System Opera-

tors PG] General and Professional Liability; Travelers

Indemnity Co. (CT); CO, DE, HI, TN, TX, VT

N.A.C.A. PURCHASING GROUP (TX): Liability;

Atlantic Mutual Ins. Co. (NY); Atlantic Lloyds Ins. Co. of

Texas (FX); TX

NACHC INSURANCE CONSORTIUM PG [NIC]

(DC): Professional and general liability; E&O; Frontier

Ins. Co. (NY); Evanston Ins. Co. (IL); CO, DE, HI, TN, TX,

NALU PG (CA): Errors & Omissions; Transamerica

Ins. Co. (CA); CA, DE, HI, TN, TX, VA, VT

NATIONWIDE E.M.T. MALPRACTICE RISK (LA):

Professional Liability Malpractice Ins.; The Paradigm Ins.

Co. (IN); CA, CO, DE, TN, VT

NATL. AMUSEMENT CORPORATION (MO) (aka:

Natl. Amusement PG, Inc. & Natl. Amusement Coopera-

tive): Commercial Liability Waterparks Amusement

Industry; Bel-Aire Ins. Co. (MO); CA, DE, TN, TX, VA, VT

NATL. ASSN. FOR AMBULATORY CARE INS. PG

(DE): Professional Liability; Reliance Ins. Co. (PA); CA,

CO, DE, HI, TN, TX, VT

NATL. ASSN. OF BROADCASTERS (NAB) (DE):

Broadcasters Liability; General Ins. Co. of America (WA);

CA, C&) DE. TM, TX, VF

25f

NATL. ASSN. OF CAR WASH OWNERS & OPERA-

TORS RISK PG (TX): General liability; Oxford Indemnity

Ins. Co. (WY); Laramie Ins. Co. (WY); CA, TX

NATL. ASSN. OF DAY CARE PROVIDERS (CO):

Liability for members; Universal Security Ins. Co. (TN);

CO, DE, TN, VT

NATL. ASSN. OF EMERGENCY MEDICAL TECH-

NICIANS, INC. PG (AZ): All liability coverages; AzStar

Ins. Co. (AZ); CA, CO, DE, TN, TX

NATL. ASSN. OF HOME INSPECTORS (MN):

Errors & Omissions; Atlantic Mutual Cos. (NY); Centen-

nial Ins. Co. (NY); CA, CO, DE, TN, TX, VA, VT

NATL. ASSN. OF HORSE OWNERS & BREEDERS

RISK PG (TX): Primary general liability; Oxford Indem-

nity Ins. Co. (WY); CA, TX

NATL. ASSN. OF INDEPENDENT LIFE BROKER-

AGE AGENCIES (DC): Errors & Omissions for Life

Broker/ Agents; Transamerica Ins. Co. (CA); CA, CO, DE,

TN, TX, VT

NATL. ASSN. OF INSURANCE AGENTS PG, INC.

(CA): Professional liability; Laramie Ins. Co. (WY); CA

*NATL. ASSN. OF MATERIALS HANDLING CON-

TRACTORS PG (TX): Material contractors’ liability;

Laramie Ins. Co. (WY); TX

NATL. ASSN. OF MEDICAL LABORATORIES (PA):

Professional liability for medical reference laboratories;

Planet Ins. Co. (WI) & other members of the Reliance

Group; CA, DE, TN, TX, VT

26f

NATL. ASSN. OF ORTHODONTISTS, A PG (NE):

Medical malpractice for orthodontists; Natl. American

Ins. Co. (OK); CA, CO, DE, HI, TN, TX

NATL. ASSN. OF PRIVATE SECURITY INDS., INC.

PG (TX): Commercial general liability; Security Services

Ins. Co., Ltd. (B. West Indies); CA, DE, TN, TX, VA, VT

NATL. ASSN. OF PROF. REAL ESTATE BROKERS

(DE): Errors & omissions; Gulf Ins. Co. (MO); United

Natl. Ins. Co. (PA); Homestead Ins. Co. (PA); Voyager

Indemnity Ins. Co. (GA); TN, VT

NATL. ASSN. OF TOW TRUCK OWNERS & OPER-

ATORS RISK PG (TX): General liability, commercial auto

liability; Oxford Indemnity Ins. Co. (WY); CA, TX

NATL. ASSN. OF TRUCK OWNERS & OPERA-

TORS RISK PG (Unk): Liability; Oxford Indemnity Ins.

Co. (WY); TX

NATL. ASSN. WHOLESALE DIST. (IL): Product Lia-

bility Ins.; Pacific Employers Ins. Co. (CA); CA, CO, DE,

NATL. AUTO RENTAL, INC., A PG (LA): Auto &

general liability; No. American Indemnity Co. (LA); CA,

CO, DE, TN, TX, VT

*NATL. BLOOD RESOURCES PG, INC. (TX): Lia-

bility; Illinois Ins. Exchange (IL); TX

NATL CHIROPRACTIC COUNCIL PG (CA): Pro-

fessional liability; Pro-Med Intl., Ltd. (Eng.); CA

NATL. CPA LIABILITY RISK PG INC. (Unk): Gen-

eral liability; Euro-American Ins. Co., Ltd. (Turks &

Caicos); CA, TX

Po Abe

27f

NATL. CPA RISK PURCHASING GROUP (GA):

Accountants professional liability; Commercial Casualty

Ins. Co. (GA); CO, DE, TN, VT

NATL. DAY CARE ASSN., INC. (KY): Commercial

General and Professional Liability; American Ins. &

Indemnity Corp. (KY); CA, DE, TN, VT

NATL. DAY CARE PROVIDER INS., INC. PG (CA):

Bodily Injury & Property Damage Liability; TOPA Ins.

Co. (CA); CA, DE, HI, TN, TX, VT

NATL. DENTAL PROFESSIONAL LIABILITY INS.

PG & SAFETY GROUP (IA): Professional Errors and

Omissions; No. Atlantic Casualty & Surety Co. (IN); CA,

NATL. ECONOMIC AND COMMUNITY DEVEL-

OPMENT COUNCIL, INC. (FL): Directors and officers

liability; Home Ins. Co. (NH); TN, VT

NATL. FED. OF INS. REGULATORS PG (WY):

Insurance Regulators Professional Liability; Lloyds U.S.

(TX); CA, DE, TN, VA, VT

NATL. FED. OF PUBLIC ENTITIES (WY): Compre-

hensive general liability; Great Plains Ins. Co., Inc. (NE);

CA, CO, DE, TN, TX, VA, VT

NATL. FED. OF STATE HIGH SCHOOL ASSN. PG

(RI): Athletic Liability Ins. For Members; United Intl. Ins.

Co. (RD; CA, CO, DE, HI, TN, TX, VA, VT

NATL. FLIGHT PROFESSIONAL PG, INC. (MO):

Professional liability; Bel-Aire Ins. Co. (MO); CO, DE, TN,

28f

NATL. FOOD PROCESSORS PG (DC): Product

Recall and Tampering Liability; California Union Ins. Co.

(CA); CA

NATL. HARD GOODS DIST. PG, INC. (KY): Com-

mercial general liability; American Ins. & Indemnity

Corp. (KY); CA, DE, TN, VT

NATL. LAWYERS LIABILITY RISK PG INC. (Unk):

Professional liability; Euro-American Ins. Co., Ltd. (Turks

& Caicos); CA, TX

NATL. LIMOUSINE ASSN. (DC): Auto & General

Liability; Progressive Casualty Ins. Co. (OH); CA, CO,

DE, TN, TX, VA, VT

NATL. MANUFACTURED HOUSING INS. PG,

INC. (FL): General & product liability; Bankers Ins. Co.

(FL); TN

NATL. MARINE TRADES ASSN. (FL): Marina and

Related Operators Legal Liability, Comprehensive general

liability; 12 Primary Carriers and 15 Excess Carriers;

(Heavy orientation to private/pleasure marine industry);

CA, CO, VA

NATL. MINING ASSN. PG. INC. (MOQ): Mining

General Liability; Bel-Aire Ins. Co. (MO); CO, TN, VA

NATL. NEWSPAPER ASSN. PG (DC): Newspaper

Publishers Liability; General Ins. Co. of America (WA);

CA, CO, DE, HI, TN, TX, VT

NATL. NURSES PG ASSN. (IL): Medical Profes-

sional Liability; Chicago Ins. Co. (IL); CA, CO, DE, HI,

TN, TX, VA, VT

: -

29f

NATL. PURCHASING GROUP (TX): Medical mal-

practice; Natl. Fire and Marine Ins. Co. (NE); H.S.

Weaver’s Underwriting Agencies, Ltd. (Eng.); Illinois Ins.

Exch. (IL); CA, TX

NATL. REALTY LIABILITY ALLIANCE, INC. (FL):

Professional liability for real estate errors & admissions;

Lexington Ins. Co. (DE); CA, CO, TX

NATL. REFUSE HAULERS ASSN. (MO): Liability;

Bel-Aire Ins. Co. (MQ); DE, TN, VT

*NATL. SECURITY GUARD PG (WY): Security

guard errors & omissions; Insurer unknown; CA

NATL. SOCIETY OF DENTAL PRACTITIONERS

(MD): Professional Malpractice; Illinois Ins. Exchange/

Britamaco Underwriters, Inc. (IL); CA, CO, DE, TN, TX,

VA, VT

NATL. SOFT GOODS DIST. PG, INC. (KY): Com-

mercial General Liability, Products, Completed Opera-

tions; American Ins. & Indemnity Corp. (KY); CA, DE,

TN, VT

NATL. TAXI LIABILITY RISK PG INC. (Unk): Gen-

eral liability; Euro-American Ins. Co., Ltd. (Turks &

Caicos); CA, TX

NATL. TRUCKING ALLIANCE RISK PG (MS): Lia-

bility for members; Insurer unknown; CO, DE, TN, VT

NAU/NACIA AGENTS & ADJUSTERS PG (MN):

Errors & Omissions for Crop Ins. Agents and Adjusters;

Empire Indemnity Ins. Co. (NE); CA

30f

NIX MEDICAL CENTER PG (TX): Professional lia-

bility for TX hospital & physicians on staff; Anglo Ameri-

can Ins. Co. (Eng); Illinois Ins. Exchange (IL); Lexington

Ins. Co. (MA); Walbrook Ins. Co. (Eng); Western Indem-

nity Ins. Co. (TX); TX

NO. AMERICAN ASSN. OF TRADE CONTRAC-

TORS, INC. (MOQ): Builders & remodelers liability; Bel-

Aire Ins. Co. (MQ); CO, DE, TN, VT

NO. AMERICAN CHEMICAL USERS & APPLICA-

TORS ASSN., INC. (UT): General Liability; Homestead

Ins. Co. (PA); CA, CO, DE, TN, TX, VA, VT

NO. AMERICAN DENTAL PG, INC. (KY) [Previ-

ously known as AMERICAN DENTAL PG, INC.): Profes-

sional Liability; American Ins. & Indemnity Corp. (KY);

CA, DE, TN, VT

NO. AMERICAN ELECTRO PLATERS ASSN., INC.

(KY): Commercial General Liability, Products, Completed

Operations; American Ins. & Indemnity Corp. (KY); CA,

DE, TN, VT

NO. AMERICAN HORSEMEN’S PG (KY): (aka:

KENTUCKY COUNCIL NO. AMERICAN HORSEMEN’S

PG): Commercial General Liability; American Ins. &

Indemnity Corp. (KY); CA, DE, HI, VT

*NO. AMERICAN PETROLEUM DISTRIBUTORS

PG, INC. (MO): Pollution liability; Bel-Aire Ins. Co.

(MO); CO, TN, VT

NO. AMERICAN RESTAURANT & TAVERN ALLI-

ANCE RISK PG (MS): Liability for members; Insurer

unknown; DE, CO, TN, VT

31f

NO. AMERICAN TRAVEL PROFESSIONAL PG

(CA): Professional Liability for Travel Agencies and Tour

Operators; The Home Ins. Co. (NH); CA, CO, DE, TN, TX,

NO. AMERICAN TRUCKERS ASSN., INC. (KY):

Truckers Commercial Liability; American Ins. & Indem-

nity Corp. (KY); CA, DE

NO. AMERICAN TRUCKERS PG, INC. (MOQ): Auto

liability & physical damage; Bel-Aire Ins. Co. (MQ); CO,

TN, VT

NURSE PRACTITIONER PROFESSIONAL LIA-

BILITY PG, INC. (NY): Professional Liability for Nurse

Practitioners; Ins. Co. of the State of PA (PA); CA, CO, TX,

VA, VT

NURSES INSURANCE ALLIANCE PG (VA): Profes-

sional liability; Scottsdale Ins. Co. (OH); CA

NURSES’ PG, INC. (GA): Professional Liability;

Insurer unknown; CA, CO, DE, TN, VA, VT

NURSING ORGANIZATIONS PG ASSN. (IL):

Medical Professional Liability; Chicago Ins. Co. (IL); CA,

DE, HI, TN, TX, VA

NURSING PROFESSION PG ASSN. (IL): Medical

Professional Liability; Chicago Ins. Co. (IL); CA, DE, TN,

TX, VA

OSS/ACA CAMP OWNERS UMBRELLA PRO-

GRAM (iN): (AKA: Camp Owners Umbrella Program)

Umbrella Liability; Chicago Ins. Co. (IL); General Star

Natl. Ins. Co. (OH); CA, TN, VA, VT

32f

OSTEOPATHIC PHYSICIANS & SURGEONS PRO-

FESSIONAL LIABILITY ASSN., INC., A PG (AR): Phy-

sicians and Surgeons Professional Liability; Clarendon

Natl. Ins. Co. (MD); CA, CO, DE, TN, TX, VA, VT

OUM GROUP CHIROPRACTOR PROGRAM (WA):

Chiropractor Professional Liability; Harbor Ins. Co. (CA);

CA, CO, DE, HI, TN, TX

OUM GROUP PODIATRIST PROGRAM (WA):

Podiatrist Professional Liability; Harbor Ins. Co. (CA),

CA, CO, DE, HI, TN, TX

OUTFITTERS, GUIDES AND GUEST RANCH

PROF. ASSN. PG (CO): Commercial general liability;

Universal Security Ins. Co. (TN); CA, CO, TX, VT

OUTPATIENT SERVICE PROVIDERS PATIENT

PROTECTION GROUP (CA): [aka: Accord; Outpatient

Care Providers Patient Protection Group]: Professional

and general liability; Security Trust Ins. Ltd. (B. Virgin

Is.); CA, TX

OWNERS, LANDLORDS & TENANTS RPG, INC.

(TX): All liability coverages; American Trust Ins. Co., Ltd.

(Turks & Caicos); CO, DE, TN, VT

OWNERS-OPERATORS INDEPENDENT DRIVERS

ASSN. (MQ): Truckers public liability; Natl. American

Ins. Co. (MQ); Ins. Co. of State of Pa. (NY); CO, DE, TN,

TX, VT

PATHOLOGISTS’ LIABILITY INS. PG (CA): Profes-

sional Liability For Members; The Doctor’s Co. (CA); CA,

CO, DE, HI, TX, VA, VT

33f

PEST CONTROL OPERATORS INTL. I (UNK):

Comprehensive General Liability; Mid-American Indem-

nity Ins. Co. (Cayman Is.); CA, CO, TN

PEST CONTROL OPERATORS INTL. II (UNK):

Comprehensive General Liability; Mid-American Indem-

nity Ins. Co. (Cayman Is.); CO

PETROLANE RESELLERS OPERATIONS PG (TX):

Limited liability for LP Gas Dealers; LPG Risk Retention

Group Ins. Co. (TX); CA, CO, DE, TN, TX, VT

PHYSICIANS LIABILITY MANAGEMENT ASSN.

(CA): Medical malpractice for doctors & dentists; South-

western Indemnity & Casualty Ins. Co. (AZ); TX

PHYSICIANS PROFESSIONAL LIABILITY (CA):

Medical professional liability for osteopathic physicians;

Clarendon Natl. Ins. Co. (MD); CA, CO, DE, TN, TX, VT

PHYSICIANS PURCHASING GROUP, INC. (CO):

Medical malpractice liability for members; Summit Home

Ins. Co. (MN); CO

PHYSICIANS PURCHASING GROUP OF AMER-

ICA (CA): Professional liability; The Doctors Co. (CA);

CA, CO, DE, TN

PIZZA FRANCHISE GROUP/SNI PG (CA): Com-

mercial General Liability; Commercial Auto Liability;

Superior Natl. Ins. Co. (CA); CA

PREFERRED HOTEL INSURANCE GROUP, INC.

(CA): Commercial general & auto liability; Planet Ins. Co.

(WI); Lexington Ins. Co. (DE); Natl. Union Fire Ins. Co.

(PA); Niagra Fire Ins. Co. (NY); CO

34f

PREMIER PHYSICIANS FOUNDATION (IL): Physi-

cians professional liability; Premier Alliance Ins. Co

(CA); TX

PRESTONWOOD RISK PURCHASING GROUP

(OK): Auto liability; Universal Security Ins. Co. (TN); CA,

CO, DE, TN, TX

PRIMARY HEALTH CARE PHYSICIANS PG (CA):

Professional liability; Lexington Ins. Co. (MA); H.S

Weaver’s Underwriting Agencies, Ltd. (Eng.); Illinois Ins

Exchange (IL); CA, TX

PRODUCT LIABILITY PG, INC. (IN): Product lia |

bility; Casualty Assurance Risk Ins. Brokerage Co |

(Guam); CO, DE, TN, VT

PROFESSIONAL ASSN. OF LIMOUSINE OPERA- |

TORS, INC. PG (CA): Auto liability; Clarendon Natl. Ins |

Co. (MD); CA, CO, TX

PROFESSIONAL DESIGN PG ASSN. (IL): Profes

sional liability; Chicago Ins. Co. (IL); CA, CO, DE, TN,

TX, VT

PROFESSIONAL ENVIRONMENTAL CONTRAC-

TORS, INC. (PECI) (NJ): General Liability for Asbestos

Abatement Contractors; Fidelity Environmental Ins. Co

(ND; CO, DE, TN, TX, VA, VT

PROFESSIONAL HOME DEMONSTRATORS LIA-

BILITY PROTECTION PG (MOQ): General liability;

Savers Property & Casualty (MO); CO, DE, V1

35f

PROFESSIONAL HUMAN SERVICES, INC. (HI):

Professional & general liability for social services agen-

cies; Professional Providers Inc., Ltd. (Barbados); CO, DE,

TN, VT

PROFESSIONAL LIABILITY MANAGEMENT

ASSN. (CA): Primary and Excess Professional Liability

for Physicians and Dentists; Southwestern Indemnity &

Casualty Ins. Co. (AZ); CA, CO, DE

PROFESSIONAL NURSING ORGANIZATIONS

PG ASSN. (IL): Medical Professional Liability for Mem-

bers; Transamerican Ins. Co. (CA); CA, DE, HI, TN, TX,

PROMOTER’S INSURANCE PG, INC. (GA): Com-

mercial general liability; Connecticut Indemnity (CT);

CA, DE, TN, TX, VT

PROPANE GAS PURCHASING GROUP (TX): Gen-

eral liability; Ranger Ins. Co. (DE); CA, CO, DE, TN, TX,

*PROTECTION 2000 ASSN.,, INC. (IL); Environmen-

tal impairment liability; Environmental Protection Insur-

ance Co. RRG (IL); CA, CO, TN, VT

PUBLIC TRANSPORTATION PROVIDERS RISK

PG (AL): Liability; American Ins. & Indemnity Corp

(KY); CA, DE, TN, TX, VT

PURCHASING GROUP MANAGERS, INC. (TX):

Comprehensive general liability; Universal Security Ins

Co. (TN); CO

—_<$_$L

36f

RAMADA INTL. ASSN. RISK PG (AZ): General

Liability, Auto, Liquor, Hotel; Continental Ins. Co. (NH);

CA, DE, TN, VA, VT

RBT RISK PURCHASING GROUP (AL): Liability;

Laramie Ins. Co. (WY); CO

READY MIX CONTRACTORS OF TEXAS (TX):

General, auto & excess liability for ready mix contractors;

American Guardian Ins. Underwriters Lloyds (TX); Gulf

Group Lloyds; TX

REAL ESTATE AGENTS PG OF CALIFORNIA

(CA): Errors & omissions for real estate agents; Continen-

tal Casualty Co. (IL); CA

REAL ESTATE FRANCHISE PG (GA): Professional

Liability for Real Estate Agents & Brokers; Home Ins. Co.

(NH); CA, CO, DE, HI, TX, VT

REAL ESTATE PROFESSIONALS LIABILITY PG

(IA): Professional liability; RLI Ins. Co. (IL); CA

REAL ESTATE PROFESSIONALS RISK PG, INC.

(CT): Errors & omissions; Commerce & Industry Ins. Co.

(NY); CA, CO, DE, HI, TN, TX

REAL ESTATE PG (UT): Errors & omissions; Utah

Home Fire Ins. Co. (UT); DE, TN, VT

REALTY PG ASSN. (IL): Professional liability ins;

Chicago Ins. Co. (IL); CA, CO, DE, TN, VA, VT

REALTY WORLD PG (VA): Professional Liability;

Home Ins. Co. (NH); CA, CO, DE, TN, TX

37f

RECOVERY A

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