§3905 Clarification concerning permissible State authority

Summary

Risk retention groups and purchasing groups must follow a State’s rules for car no-fault and financial responsibility insurance. The chapter’s special rules only cover liability insurance. These groups cannot offer other kinds of insurance. Their policies also cannot give coverage that a State law generally bans or that the State’s highest court has ruled illegal. Except for the anti-discrimination rule in section 3902(a)(4), a State keeps the power to decide how people prove they can pay for damages. A State can accept or reject proof that comes from a licensed insurer, excess-lines coverage, a risk retention group, or any other source, whether bought directly or through a broker, agent, or purchasing group.